News Column

2002 Hispanic Business Nonprofit 25: Capital Crunch

September 2002, HISPANIC BUSINESS Magazine

View the 2002 Hispanic Business Top 25 NonprofitsGrowth of the U.S. Hispanic population is creating contrary trends for nonprofit organizations. On one hand, as the "market" for Hispanic human services grows, the organizations that deliver them tend to grow larger, pushed by the same economics of scale that drives consolidation in banking, healthcare, and other service sectors. On the other hand, organizations tend to specialize in one or two areas, opening up space for other organizations.

"The awareness grows with the demographics: Not every Hispanic organization can deal with every problem facing the Hispanic community," says Martin Castro, president of the California-based Mexican American Opportunity Foundation (MAOF), the largest organization on the 2002 Hispanic Business Nonprofit 25 directory.

About 86 percent of MAOFís $42.5 million budget goes to childcare programs, according to Mr. Castro. To answer other needs, such as housing assistance and financial education, "I see more Hispanic organizations coming into being," he says.

The sheer size of Hispanic nonprofits has serious implications for Walter Sava, executive director of Milwaukee-based United Community Center, number 18 on the 2002 Hispanic Business Nonprofit 25 directory.

"As nonprofits have become bigger operations, you see executive directors who were making $50,000 or $60,000 now making $120,000," Mr. Sava says. "Those trends will affect how nonprofits are perceived by the public. My title is still executive director, but at other [nonprofits] you have CEOs and vice-presidents of operations. These things go in cycles. We could be entering the cycle of nonprofits playing fat cats."

However, Mr. Sava sees fundamental market shifts driving consolidation. The need to pay higher salaries favors large organizations, for example.

"One trend we see is government getting out of social services and shifting it to nonprofits," he explains. "In many cases, I think itís a good trend. Nonprofits have the expertise and passion to help people."

MAOFís Mr. Castro agrees. "Government has the obligation to deliver services to the community," he says, "and nonprofits are an efficient way to deliver them."

Nonprofits interviewed by Hispanic Business all report that September 11 hurt their funding while increasing the need for services. Mr. Castro says the number of immigrants seeking help with citizenship applications doubled after the terrorist attacks.

Maria Elena Girone, executive director of New YorkĖbased Puerto Rican Family Institute (number 7 on the list), figures her agency lost about $350,000. The institute receives most of its income for providing health services through Medicaid.

"We lost income, because it comes from seeing patients in the office," says Ms. Girone. "After the tragedy, people didnít want to come out of their homes. We are still dealing with the chain reaction."

Even before September 11, the demand for Hispanic human services far outstripped available resources, a disparity likely to worsen, according to Ms. Girone.

"We have been able to reconcile government stepping out of service delivery to poor people and placing more responsibility on philanthrophic entities, but in truth itís very hard for Latino agencies to access private corporate funds and foundations," she says. "The Bush administration has a goal of reducing disparities in health care, but we are far from reaching that goal unless there is an initiative to allocate more resources to Latino agencies."

Written by Senior Editor Joel Russell. Nonprofit 25 directory research by Research Supervisor J. Tabin Cosio and Research Associates Cynthia Marquez and Mike Caplinger.

Methodology
Nonprofit organizations were identified from Internet database lists of tax-exempt organizations located in the 50 states and the District of Columbia. A list of these organizations was sorted by financial criteria and screened for descriptions related to Hispanic issues. Qualified organizations were sent a survey asking for information.

Organizations were ranked on the basis of annual operating budget. While Hispanic Business makes every attempt to locate and include the largest Hispanic nonprofit organizations in the country, we cannot list organizations that do not submit information by our deadline.

To ensure that a particular nonprofit organization is considered for future directories, readers may send the name of the organization, along with the contact personís name, mailing address, phone, fax, and e-mail address, via fax to (805) 964-6139 or via e-mail to research@hbinc.com.



Source: HISPANIC BUSINESS Magazine


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