LA Philanthropy Watch

Helmut Anheier, Founding Director of the Center for Civil Society, just left UCLA to become Dean of the Hertie School of Governance.  A professor of sociology, he is a well-known international scholar.  He flew back from Berlin to speak at the annual conference on the State of the Nonprofit Sector in Los Angeles (which I mentioned in a previous post).

Unfortunately, Mr. Anheier was scheduled to speak at the end of the program – by which point we had pretty much run out of time.  Although he rushed through his remarks, he did spend a few minutes considering the challenging environment nonprofits face, answering the question, ‘What do we know?’ and looking ahead to what we can anticipate.

Here is a summary of his remarks (which represent a reconstruction, not a transcript):

Every sector has been hit hard by the economy. Nonprofits have suffered because every potential source of nonprofit revenues is under stress.

Governments, especially state and local governments, are focused on ‘short-termism’- management of the current crisis; they lack capacity to come to the rescue.  The for-profit sector is cutting back on corporate social responsibility initiatives and lobbying government for handouts.  Foundations have seen assets drop precipitously, which has curtailed grantmaking.  Households are experiencing greater uncertainty, contributing fewer dollars, and reconsidering levels of engagement.

While we don’t know how this will play out, Professor Anheier suggested that we do know a number of things:

• As economic conditions unfold, the nonprofit business cycle will be delayed one to two years.  So, even if the economy continues to recover, nonprofits will experience difficulties well into 2010 and even 2011.
• Larger organizations, with greater capacity to weather the storm, will fare better than smaller organizations.
• Small nonprofits will go into ‘survival mode.’
• Board and staff members will try to compensate for the financial shortfalls at their organizations; their efforts will offer limited success at best and the risk of ‘burnout.’
• Nonprofits will have little say, as more powerful interests come to the fore.
• Few lessons – from the economic challenges of 1981 and 2002-03 – have been learned and remembered.

So going forward, what can we expect?  We will see:

• Muddling through, with nonprofits pretty much on their own.
• Mergers and rationalization for a number of years.
• Social costs shifted to families and individuals.
• Many innovations take place.  We should capture them, Mr. Anheier suggested; we can hardly afford to let them go unnoticed.
• Action Research Partnership.  UCLA’s Center for Civil Society and the Los Angeles nonprofit community are natural partners.

Just a final bracing word: Mr. Anheier noted that he is not optimistic over the short term.

(Photo courtesy of UCLA School of Public Affairs)

Update – Comment moved into post – Tweets that mention A Scholarly View on the State of the Nonprofit Sector Going Forward | LA Philanthropy Watch — Topsy.com
topsy.com/tb/ow.ly/xs6s – October 30, 2009