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COVER STORY
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O.C. nonprofits, continued ...Published: October 01, 2011

“We all know someone who is suffering and in need – a family member, a friend, even a colleague,” reflects Palmer. “Recently, I had a volunteer who has worked here for years come and ask, ‘Is there an appropriate way for me to ask for a lunch box? Today, I need one.’ It’s heartbreaking.”
   
America’s economic morass has unemployment stuck above 9 percent in Orange County and 12 percent statewide, triggering tectonic shifts on the nonprofit landscape. Although organizations have survived to this point, dig just below the surface, and experts say a large number of agencies are teetering. To cope, some have gone through rounds of layoffs and even mergers with similar organizations to trim overhead and steady their balance sheets. Deep cuts in government grants and more selective giving by corporations and individuals have produced one of the most hyper-competitive environments ever for the shrinking pie of donors who are still writing checks to the more than 12,000 registered nonprofits in O.C.

Is O.C. giving enough?
“The competition for dollars is fierce,” says Douglas Freeman, founder of the first National Philanthropy Day in 1986 and still a leading voice in the Orange County nonprofit community. “Not long ago, money was easy to get. Auction items at lavish galas were going for silly numbers. Even if your organization wasn’t run well, you couldn’t help but land donations. Not now. Only the fittest will survive. It’s a new paradigm.”
   
A shortage of current data about giving and nonprofits makes it hard to paint a precise picture about the state of the not-for-profit industry in the region. But interviews with nearly two-dozen government officials, corporate leaders, foundation executives and donors tell a tale of impact and change on all sides of the nonprofit equation. In the end, there is mounting optimism that better days are ahead. However, between now and then, the road is still paved with the reality that demand for low- or no-cost human services – food, shelter, healthcare, counseling and job training – is outpacing the supplies and money needed to acquire those commodities.
   
Since 2001, the number of nonprofits based in O.C. has increased by 49 percent, second only to Dallas (54 percent) among similar size areas, according to the 2010 Orange County Community Indicators, published by Ruane’s commission and the Orange County Business Council. Yet, even with that growth, the report indicates that the county has fewer nonprofit organizations per capita than most comparable regions. Only Riverside/San Bernardino and Dallas have fewer than Orange County’s 4.1 nonprofits per 1,000 residents. Locally, nonprofits also lag near the bottom when it comes to per-capita charitable contributions when compared to Boston, Seattle, Minneapolis, San Jose, Austin and even Los Angeles.
   
“Collectively we are falling well short of the mark in terms of giving,” asserts Gardner, a 25-year veteran of the real estate industry who was named president and CEO of Orange County United Way in July.     
   
Human service organizations comprise the highest percentage of nonprofits in the county, at 24 percent, followed by religious affiliated groups, at 21 percent. Those organizations that deliver what experts label a public or social benefit, such as educational foundations, make up 20 percent. In 2009, more than half of O.C. nonprofits reported that they had cut operating budgets, with nearly 20 percent of those reducing budgets substantially, according to the Community Indicators report. The reasons: fewer donations (47 percent less), less revenue from traditional fundraisers (37 percent less) and the loss of one or more government grants or contracts (37 percent less).    


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10 Questions for Max Gardner
President & CEO, United Way Orange County



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