Thursday, March 12, 2009

Nonprofit Financial Troubles Part IV: Social Services in Silicon Valley and the South

The San Jose Mercury News reports that Northern California's health and human service charities have been hard hit by the financial crisis.  According to a recent survey by the Silicon Valley Council on Nonprofits (which, ironically, does not appear to have an active website), more than half of the 100 nonprofits surveyed expected layoffs in the near future.  Such charities are predictably experiencing both an increasing demand for their services and a decline in both government and private funding.  For example, the article reports that West Valley Community Services, which provides emergency assistance for low-income seniors and families, has seen the number of households requesting help jump from 25 to 30 percent over the previous year even as local governments in Santa Clara County and San Jose cut social service spending.

The Washington Post has a front-page story detailing similar pressures on social service agencies in South Carolina, which is being aggravated by state decisions both to cut funding for nonprofits and to ask for the ability to direct federal stimulus payments to lower state debt instead of for new spending.  For example, the Department of Social Service has cut contracts with nonprofits by an average of 10 percent for such services as emergency shelters and employment training programs.  Private funding sources have also seen shortfalls, with the United Way of the Midlands in Columbia still more than a $1 million short of its $12.2 million goal for its about-to-end annual campaign. 

The Atlanta-Journal Constitution also had a similar report earlier this week, detailing how social service programs in that part of the country are also facing the double whammy of rising demand and shrinking revenues.  For example, the Center for Family Resources, which provides a variety of services to low-income families, saw a 30 percent increase in the number of people seeking its assistance in 2008 but faces a more than 10 percent budget cut in 2009 because of reduced donations that has led to a hiring freeze, layoffs, and reduced employee benefits.  The article cites similar trends for other social service organizations in the Atlanta region.


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