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Asian American Nonprofits are Struck Hardest

Pacific Citizen, News report, Lynda Lin, Assistant Editor Posted: Nov 13, 2008

With less funding coming in, the most vulnerable victims are the communities these vital organizations serve.

Forget the clichs about Wall Street and Main Street. What about Girard Street in Washington, D.C.?

apa"It's a make or break year," said Rick R. Chen of Asian American LEAD (AALEAD), a nonprofit organization headquartered at 1323 Girard Street where the nation's economic downturn has struck hard.

For the past 10 years, AALEAD has helped low-income Asian Pacific American youth move out of poverty to become successful, self-sufficient adults. Currently, over 300 APA families in the D.C. and Montgomery County take advantage of AALEAD's after school and youth development programs, said Chen, their manager of development and communications.

Like many others, Chen has been following the news about the global credit crunch, rising unemployment and the implosion of some of the nation's leading financial institutions. One headline hit close to home for AALEAD.

"Freddie Mac was a dedicated funder of our Family Strengthening program," said Chen, adding that the troubled mortgage behemoth recently changed their funding priorities and phased out youth programs. In September, Freddie Mac was taken over by the federal government as it faced growing losses.

"We're really scrambling here," said Chen.

Since the economic downturn, AALEAD has seen a decrease in grants, so they've had to cut activities like field trips and workshops with hired trainers and speakers.

For now, they're fortunate enough to keep from cutting existing programs by using money in their reserves to cover shortfalls, said Chen. But this is the last year they will be able to do that.

There are more than 900,000 public charities in the United States. And given the cratering economy, many nonprofits - which rely on the generosity of individual contributors, foundations and corporations - have been left reeling.

But at risk in the fallout of the financial crisis are not just the APA nonprofits, but also the vulnerable APA communities they serve.

A Critical Need

apaIn an election year, where America's socioeconomic map only includes Wall Street and Main Street - where political leaders tout the rights of "Joe the Plumber" - APAs want to know where they stand.

Paul the Landscaper says his business is diversified enough to be recession-proof so far. However, he has lost some business from developers who have foreclosed on their properties.

"I think this is a temporary lull," said Paul Saito, the owner of Saito Associates, a landscape architecture and urban planning company in Fresno, Calif.

It's a prediction APA nonprofits can only hope for.

"The actual impact of the crisis remains to be seen, but the potential impact is devastating," said Diane Narasaki, executive director of the Seattle-based Asian Counseling and Referral Services (ACRS).

Many APA families can't turn to mainstream services because of language and cultural barriers. At its main office at 3639 Martin Luther King Jr. Way and its Bellevue office, ACRS serves 23,000 clients in 30 languages with an annual budget of about $11 million.

They've already felt the impact of the economic downturn, said Narasaki. Their nutrition program, which includes a community food bank, is the third most used food bank in Washington's King County - where APAs make up over 13 percent of the county's population.

Unlike other food banks, ACRS stocks rice and produce familiar to the APA palate. But in one year, the cost of rice has more than doubled while ACRS has seen an influx of new clients who are suffering from the bad economy.

"People come from far and wide," said Narasaki. Most are elderly people on fixed incomes trying to make ends meet, but lately she has seen more younger people and families with children who rely on ACRS as their main food source.

In recent days, people have lined up outside the food back at 5 a.m. to wait until ACRS opens at 11 a.m., said Narasaki.

In the current food crisis, ACRS only has the money to feed their clients for eight months. They've had to reduce their rice distribution by half.

"It hurts the staff and the volunteers in the food banks," said Narasaki about giving smaller amounts of rice. "It's really painful to see the great need not being met."

The organization's financial crunch is at the center of what seems to be a perfect storm.

Most of ACRS' funding comes from government sources at the federal, state, county and city levels. But Washington is projecting a deficit of $3.2 billion. King County is anticipating a $93 million deficit.

To make matters worse, ACRS had previously received annual grants from Washington Mutual, the savings and loan giant, to support their vocational services program.

On Sept. 25 in the largest bank failure in American history, federal regulators seized the troubled WaMu and reached a deal to sell most of the operations to JP Morgan Chase. Narasaki does not know if their grant will be renewed.

In 2007, banks were the second-largest corporate givers to the U.S. nonprofits. The crisis in the financial sector adds more hardship to a year in which experts say corporate giving already has been down.

"It's difficult. I don't know how ACRS will be," she said. ACRS' last fundraiser generated less revenue than in the previous year. It's been consistent with most nonprofits - regular funders just don't have the financial means to give anymore, said Narasaki.

A Balancing Act

For the next fiscal year, the JACL is projecting a deficit if the budget is not adjusted, said Larry Oda, national JACL president. "Our revenues, including investment income and membership revenue, are at risk."

The 79-year-old nonprofit - which champions civil rights, promotes educational values and preserves the heritage and legacy of the Japanese American community - has also been affected by the economic downturn.

The JACL relies on membership revenue as well as individual and corporate donations to fund its programs. Because of the downturn, the Legacy Fund is below the threshold for distribution, said Oda.

"We based our next budget on an increase in membership, but our history has shown a steady decline. Our budget is also dependent on investment income, which currently does not appear to be an option," he said.

Hard economic times may make membership dues unaffordable and additional contributions elusive.

The key to weathering the financial storm is a balancing act.

The Finance Committee will meet to review the current program completions as a preclude to revising the 2009-10 budgets, said Oda. "I expect that there very well may be a scaling back of program expenditures, but I am committed to maintain staff levels."

The JACL has weathered financial challenges before and the "staff is experienced in accomplishing program goals with changing resource pools," added Oda. "This experience will be valuable in the coming downturn."

Nationally other nonprofits have been responding to the challenge by launching fundraising appeals earlier.

Many nonprofits depend on year-end donations. AALEAD has shifted its focus to fundraising. Board members have been given lists of the D.C. area's top businesses to solicit. The families they serve deserve a fighting chance, said Chen.

If services from APA nonprofits are threatened, it's difficult for the individuals they serve to turn somewhere else.

"The problem is the stereotype of the model minority," said Narasaki. Many think APAs don't need help. "The need exists."

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