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Published on: 8/5/2008
Last Visited: 8/5/2008
Rita Arancibia, director of the city's Office of Housing and Community Development — which helps put nonprofits in touch with one another and funnels grant monies to eligible agencies — said nonprofits are always important to a community, but especially during an economic downturn.
"I think a lot of times we don't think about the vital role our nonprofits play in a community," Arancibia said.
While the economy has an obvious effect on nonprofits, Arancibia said nonprofits also can affect the economy.
She noted the volunteer labor on which most social service agencies rely, which can amount to millions of dollars of in-kind donations to a community.These volunteers, Arancibia said, help families keep their utilities on and their mortgages paid, preventing a further depression on the economy.
It's that backbone of volunteers that Arancibia fears could weaken in today's economic climate, limiting the effectiveness of nonprofits.
"You've got all these volunteers that are being affected by the economy," Arancibia said.
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Arancibia said the decline in volunteers may not be evident yet, but noted it may not remain the case as such declines have been seen elsewhere.
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Arancibia said an increasingly important part of nonprofits will be marketing.
"In a downturn, you have to be careful about your marketing dollars," she said, "but you certainly don't want to just stop it altogether."
"(Marketing) is going to be essential to retaining and increasing revenue at this time," she said, adding that the marketing should tie funding to outcomes.
Arancibia said it's also "gotten to a point" where nonprofits "need to become a little more innovative in their thinking."
In particular, she said they need to diversify their sources of income, so they can better withstand times of economic uncertainty.
As an example, she pointed to the rise in what she calls "entrepreneurial nonprofits" — agencies that have a product, such as the multicolored issue bracelets that were recently in style.
"If I were a nonprofit," Arancibia said, "I'd be making a headway toward investigating that."