News Column

Building for the Future

May 11, 2011

Richard Larsen, Deputy Managing Editor

Serving the nation's underserved communities can be demanding even in the best of times. With an economy still struggling to recover from the recession, the pressures on nonprofits to provide needed services can prove daunting. Despite the challenges, Hispanic nonprofits have continued to find ways to raise revenues and continue to provide their core services.

Each May, HispanicBusiness magazine profiles the top 25 Hispanic nonprofits to provide a snapshot of dedicated organizations helping minority communities and the nation.

For 2010, the nonprofits reached a milestone -- $1 billion in revenues. That allowed them to spend a collective $988 million, a 13.75 percent increase from 2009.

In a sign that things had improved in 2010, only four nonprofits saw a decreases in expenditures, compared to eight that declined in 2009. The bottom line for the top 25 nonprofits increased from $8.4 million in 2009 to $10.2 million in 2010.

Three new comers made the list this year: Comunilife Inc. of New York (No. 13 with $23.7 million in expenditures), Congreso de Latinos Unidos Inc. of Philadelphia (No. 14 with $19.5 million in expenditures) and Clinica Sierra Vista of Bakersfield, Calif. (No. 23 with $13.6 million in expenditures).

Leading Still
For the sixth year in a row, AltaMed Health Services of Los Angeles topped the nonprofit directory. Expenditures rose to $172 million, a 32.6-percent increase. Castulo de la Rocha, president and CEO, has been with AltaMed since 1967. "We've seen growth in the number of people treated in our facilities," he said in a phone interview with HispanicBusiness magazine. "We had 850,000 patient visits (in 2010), which accounted for a 44 percent to 46 percent increase in fees and reimbursements."

He also noted that the grants and development departments of AltaMed do better each year. Much of this comes from good planning, he said. You have to have "foresight, plan carefully and manage the business."

AltaMed had a surplus of $11 million in 2010.

"You run it as a business, both for profit and nonprofit," he said. "You have to have two, three or four months of reserves."

AltaMed has provided health and human services to Hispanic, multiethnic and underserved communities in Southern California for more than four decades.

Uncertainty Still Ahead
While the trend looks good, there are still signs the nonprofit sector might be in for a rocky time ahead. Asked if there had been any reduction in public funding because of state or federal budget shortfalls, 24 of the 25 top nonprofits answered yes.

"It's been a very tough year," Nilda Ruiz, president and CEO of Asociacion Puertorriquenos en Marcha Inc. (APM), said in a phone interview with HispanicBusiness magazine. APM, located in Philadelphia, came in at No. 25, down from No. 23 in 2010.

APM's expenditures dropped 10.7 percent in 2010 to $10.2 million. "Pennsylvania was one of the last states in the union to pass its budget," Ms. Ruiz explained. APM had to provide services while waiting for the late funding. Of course, the funding did not accrue interest. Also, APM didn't use all the funding it received, so the new grants were pared back.

AMP gets 70 percent of its funding from government and the rest from fundraisers and developer's fees. The nonprofit rehabilitates older housing and develops new housing projects for low-income residents.

Mr. de la Rocha said AltaMed also saw some programs affected by government cutbacks.

"Two programs were significantly affected," he said. "The adult day health centers were supposed to be completely eliminated." But working with the state and elected officials in the state capital, AltaMed was able to get a transitional period as it works to provide for those clients so it wouldn't have to leave clients in the lurch.

The other program was a learning program that was aimed at working with parenting teenagers. "The state decided, in its wisdom, it could afford to suspend it for one year," Mr. de la Rocha said. "We are working with a number of foundations and corporations to see if they can help to fund that teen program until it is restored."

Varying Strategies
For some, the shrinking pool of government funding means some belt-tightening or being more aggressive in submitting proposals.

"We will be looking to partner up with another organization that would help" keep a program going, APM's Ms. Ruiz said. To cope with its loss, APM went to a four-day, staggered workweek. It cut some preventive programs and let go of some money losing-projects.

One nonprofit, the San Francisco-based Hispanic Scholarship Fund (HSF), doesn't worry about government funding: It does not accept it. Frank D. Alvarez, president and CEO of HSF, said that, over the past 10 years, it has become more difficult for the government to aid ethnic-specific programs.

"That's not something the government can do easily because of the need to be fair," he explained. And since HSF deals only with Hispanics, if it wants "government money, (we) have to change our mission some."

Potential Funding Source
Once source of funding that could prove lucrative to Hispanic nonprofits comes from philanthropic foundations, but historically, the foundations have been less than generous when it comes to funding minority-led organizations.

The Greenlining Institute of Berkeley, Calif., has been tracking grants given by philanthropic organizations to minority-led organizations. Their third publication on the subject came out in 2008 and analyzed giving patterns for the year 2005. On average, the 25 top foundations gave 10.9 percent of grants to minority-led organizations. The Ford Foundation had the highest percentage, 35.7 percent, and the Duke Endowment had the lowest, 0.7 percent.

Of the grants awarded in 2005, only 2.1 percent went to Hispanic nonprofits.

Greenlining also found that, of dollars given through grants, only 8.8 percent on average went to minority-led nonprofits. Again, the Ford Foundation has the highest percentage, 30.6 percent. The Gordon and Betty Moore Foundation had the lowest percentage, 0.02 percent.

Of the dollars awarded in 2005, only 1 percent went to Hispanic nonprofits.

The top 25 Hispanic nonprofits received only 6 percent of their 2010 revenues from foundations, compared to 54 percent that came from government grants.

"We have not done a good job of going after these foundations," APM's Ms. Ruiz said. "We need to be more aggressive in seeking help for our community or we're in for a rough ride."

In 2008, California Assemblyman Joe Coto introduced a bill that would have required foundations that had assets in excess of $250 million to disclose the race and gender of their trustees, staff and grantees. Nine foundations joined together and offered an alternate plan. The bill was dropped and in its place, the foundations pledged to grant $30 million to minority-led nonprofits.

AltaMed was not able to secure any of those grants because they were earmarked for small nonprofits. But Mr. de la Rocha believes the money pool offered was not enough.

"Atop the $30 million, there should be another $200 million over the next two years," he said.

A shift away from public funding might be a more profitable future for Hispanic nonprofits.

But it might take more than merely finding new sources of funding—it may take a shift to a new way of doing business. As Ms. Ruiz noted, "The reality of the new economy— become more efficient, more productive."

Despite the challenges and the still shaky economy, Hispanics nonprofits seem to be on forward-looking course. AltaMed certainly is. It is constructing a new headquarters, one that might be seen as a symbol of all Hispanic nonprofits building for the future.



Source: HispanicBusiness.com (c) 2011. All rights reserved.


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