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Closing the Resource Gap

Sarah Goff, Nonprofit Finance Fund

With support from The James Irvine Foundation, Nonprofit Finance Fund (NFF) used its 2015 State of the Nonprofit Sector Survey to examine California nonprofits, focusing on organizations in the San Joaquin Valley and the Inland Empire. NFF looked at the challenges facing organizations in these regions, their resource needs, and their overall financial situations both on an absolute basis and in comparison to their coastal neighbors in the Bay Area and Los Angeles.

The Inland Empire and the San Joaquin Valley are rapidly growing areas that are home to eight million people, representing nearly one-fifth of California’s population. These regions have long suffered chronic under-investment by traditional funders, which has hampered their ability to meet the ever-growing needs of the low-income Californians they serve. Vulnerable populations in both of these areas depend on the services of nonprofits. However, most regional nonprofits are resource-strapped and struggle to meet the needs of these populations. And because these regions are capable of vast growth in the near future, it is imperative for the health of California as a whole that they are not neglected.

Our survey data and attendant analysis, firsthand on-the-ground experience, and anecdotal evidence provided by funders and nonprofits themselves, have produced a clear picture of the regional nonprofit landscape.

  • Organizations are struggling to meet the rising needs of low-income communities.
    In keeping with national trends, nonprofits are serving low-income communities at high rates and reporting increased demand for services and a continued inability to meet rising demand.
  • Nonprofits are overwhelmingly concerned with long-term sustainability issues.
    Our sector is well-versed in the challenges of making ends meet and doing more with less. Increasingly, however, there is a much-needed shift in strategic thinking that reflects an acknowledgement of how this constrains sustainability and growth.
  • Inland Empire and San Joaquin Valley nonprofits are hamstrung by their size and limited resources.
    Inland Empire and San Joaquin Valley nonprofits are notably smaller, as measured by annual operating expense, than their coastal peers. Yet they experience similar rates of increased demand for services from high-need populations. In addition, they are more limited in their ability to grow in order to meet the increasing demand. Both regions report expanding programs and hiring new staff in order to attempt to keep up with demand.
  • Comparatively, Bay Area and Los Angeles nonprofits are poised to make critical investments in organizational infrastructure.
    Nonprofits across all four regions are overwhelmingly concerned with long-term sustainability issues; however, data suggest that Bay Area and Los Angeles nonprofits are better positioned to make the strategic infrastructure investments that address these sustainability issues than their inland counterparts. Los Angeles nonprofits are bolstering their workforce, while Bay Area organizations are investing in professional development for staff.

The third sector has long provided critical services to those in need. As a vibrant part of national and local economies, we are tasked with providing for those whom the market has failed. Currently, a broad cross-section of the philanthropic community generously supports the vital work and role of nonprofits. We have, however, failed to do so equitably and, as a result, have left some regions behind.

NFF encourages funders to dig deeper and ask themselves if their funding dynamics reflect the resource disparity we found. If you are funding primarily in coastal areas, why? And if you are funding the Inland Empire or San Joaquin Valley, are there ways to bolster support beyond the program grant? These nonprofits—and ultimately their clients—have unique challenges. But they also have the same desire for a viable, stable future. Attention need not be at the expense of Bay Area and Los Angeles organizations or other regions of California. Instead, it is an opportunity to redress funding disparities and support the nonprofit sector as a whole.