For almost 40 years, the Catholic Archdiocese of Washington has operated four distinct organizations to help the region's needy: the Spanish Catholic Center for new immigrants, Anchor Mental Health for the mentally ill, the Kennedy Institute for people with developmental disabilities and Catholic Charities, which helps with child care, housing and addiction treatment.
Last month, the archdiocese combined all four organizations into one, Catholic Community Services. With $50 million and 1,000 employees, Catholic Community Services instantly became one of the area's largest social services nonprofit groups.
Hilma Brisco gets a smile from son Deandre, 6, as they are helped at Catholic Community Services by Caitlin Brazill.
(Photos Lucian Perkins -- The Washington Post)
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Ed Orzechowski, chief executive of the new group, said the restructuring was carried out in reaction to new realities confronting the nonprofit world: Governments, individual donors and foundations that fund charities are demanding that they operate more efficiently, achieve more and be more accountable to the public, he said.
"We see the future as not being easier," Orzechowski said. "It's going to get tougher."
Catholic Community Services is emblematic of the change that many nonprofit groups are undergoing as they struggle to recover from the funding crunch brought on by terrorist attacks in 2001. Many private donors diverted money to 9/11 causes, a recession reduced government funding, and foundations cut funding as the falling stock market hammered their portfolios.
A study to be released today of financial health of nonprofit human services organizations in the Washington area found that 60 percent of those surveyed reported an increase in the number of clients served during the past three years but sluggish revenue growth.
Forty percent reported increased private contributions, and most reported flat or falling government funding: Almost 80 percent, for example, reported no change or a decline in state funding.
Nonprofit groups are being "squeezed by rising service demands, but revenue is not keeping up," said Chuck Bean, executive director of the Nonprofit Roundtable of Greater Washington, which commissioned the study.
In response, some nonprofit groups are remaking themselves, and others are merging. Some have found inventive new sources of funding to make up for sources that have dried up. Some are blossoming financially, while others are still struggling. A few have gone out of business.
In the District, a high-profile civic group, DC Agenda, which researches economic and social issues, closed this month. Officials blamed a reduction in foundation funding. Last month, Public Allies, a nonprofit group that placed young adults in paid apprenticeships at local nonprofit groups, shut its doors, unable to raise operating funds, officials said.
As some nonprofits fold, others say they have had to pick up the slack.
The number of teenagers staying at Alternative House, a Vienna shelter for runaway teenagers, rose to 190 last year, compared with 150 in an average year, said Executive Director Judith Dittman. She blames the closures of shelters elsewhere in Northern Virginia and Maryland for the increase.
"We're seeing kids from a wider area," Dittman said. "It's just expanded."
To avoid closing, some nonprofit groups merged with more successful ones. But that has brought its own problems.
