In these hard times, it isn’t easy to imagine that things could get worse. Just wait.

The ravages of the economy are about to spawn massive federal and state budget cuts, which will be concentrated in social, health and welfare services. When those cuts hit home, the impact on our non-profit sector will be far worse than the suffering the sector is already enduring.

In response, L.A.’s business community must once and for all recognize the vital role non-profits play in our economy and our non-profit sector must take bold steps.

The mean economy hit non-profits hard long before it moved legislators to take drastic action. Now, as funds for everything from day care to health care, from work force development to arts programs are slashed, the damage will be significantly wider and deeper. Most programs that received government funds will disappear or shrink, and when they do, more and more people seeking aid and comfort will turn to non-profits – demand will explode as resources shrink.

To meet this fiscal and social catastrophe, the business community has to acknowledge a stark reality: Non-profits keep businesses in business.

Employees arrive at work on time and stay until closing because their children or their aging parents (or both) are safe and secure in non-profit after-school and day care programs. Employees without health care coverage use a network of clinics and emergency rooms; without those non-profit resources, absenteeism would sky-rocket. Employers seeking well-rounded, productive employees find them because of arts and literacy programs, training centers, counseling facilities, even networking opportunities through chambers of commerce, and civic and social clubs – all non-profits.

Once the business community acknowledges its vital dependence on non-profits, it must act. At the most ambitious, business leaders can apply their skill and knowledge to critical issues, as the L.A. Business Leaders Task Force on Homelessness has done. That group, which I’m involved with, developed a plan to eliminate chronic homelessness and save an enormous amount of money in the process. Business leaders can adopt this model and work with non-profit experts to explore new practical and economic ways to develop streamlined responses to the crises the drastic cuts will create. Fresh approaches to health care, elder care, day care and after-school programs and other key services can guide us through hard times.

Making a difference

Out of pure self-interest, business and corporate leaders must also take a close look at creating alliances with non-profits, work place contribution systems, expanded volunteer campaigns, loaned expertise, direct or in-kind contributions – all these will make a difference.

At the same time, the non-profit sector has some serious work to do. Business as usual won’t serve our community as it must be served.

In particular, it is long past time for non-profits to seriously examine the value of having a dozen or more organizations addressing the same issue. Whether the goal is job training or mental health counseling, there is almost certainly an economy of scale to be gained from consolidation. For too long, individuals and groups have started non-profits when like-minded organizations already exist. As economic pressures approach dangerous levels, smart non-profits must give serious thought to models that generate a greater return on investment and consolidate precious resources to maximum advantage. In hard times, there is no other option.

There is another major step the non-profit community must take. In vital areas – fundraising, marketing, advocacy, education and management – non-profit staff, board members and volunteers must be as skillful as possible, far more so when the stakes are as high as the economy has made them. Yet, the non-profit sector in our community relies on a capacity-building network that isn’t up to the task.

A recent study, commissioned by the Weingart Foundation in Los Angeles, found that our system for improving skills and leadership capacity in non-profits is haphazard, inadequate to the need, largely uncoordinated and fundamentally ineffective. That must be fixed. The responsibility for fixing it lies squarely with the non-profit community.

L.A.’s non-profit leaders know what is needed, they build effective programs and know how to reach out to the philanthropic community for support. Those assets should be focused immediately on the construction of a coordinated, cohesive capacity-building network that produces ever-more skillful, creative, effective and fully prepared non-profit leadership. In hard times, nothing less will do.

When the business and non-profit sectors take big, smart strides, we’ll all be stronger. If they fail to act, too many may never see an end to hard times.

David Hamlin is a partner at WHPR, which provides PR, marketing and advocacy counsel to non-profits and associations. He is a member of the L.A. Business Leaders Task Force on Homelessness and the author of three books.

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