The majority of Santa Barbara County nonprofit organizations have reported increased demand for their services, but only 20% of them will be able to fully meet the higher community needs, according to a recent report on the state of the local nonprofit industry.
Some are also “particularly vulnerable to federal funding shifts” since they rely heavily on government grants for funding, according to the latest report from the Santa Barbara Foundation and UC Santa Barbara’s Center for Evaluation and Assessment.
The State of Nonprofits 2025 report digs into funding trends and makes recommendations for the hundreds of local nonprofit organizations.
Nonprofits employ about 18,000 people, which represents about 8.5% of the county’s workforce, noted Stacie Furia, Santa Barbara Foundation’s director of Learning and Evaluation.Â
“For comparison, agriculture makes up 10% of employment, one of our largest sectors,” she said.
Nonprofit employment also grew steadily post-COVID-19 pandemic, about 21% between 2019 and 2024, she added.
Santa Barbara County has 2,137 registered nonprofits. There are 885 active ones (filing taxes) and 665 of them have employees, according to the report.
Those employees are a significant and growing part of the local workforce, Furia said. The sector is growing due to demand, and also faces challenges due to funding.
A leadership survey showed nonprofits report strong financial health overall, but they “anticipate volatility,” according to the report. Many organizations had some cash reserves, and about 40% of the 100 or so survey respondents had almost a full year of reserve funds.
Local nonprofits are vulnerable to federal funding shifts since government grants are a large source of funding — about 47% overall — said Tarek Azzam, director of UCSB’s Center for Evaluation and Learning.
Several other California counties with a robust nonprofit industry have lower rates. The national average is around 38%, he added.
Health and higher education-related nonprofits rely mostly on program revenues as a source of income, while international, religious and public benefit organizations rely on donor contributions as their main source, Azzam said.
Funding cuts on the federal and state level will affect nonprofits differently, depending on their sources of revenue, he noted.
Some of the employment data analysis excludes healthcare, higher education and Direct Relief because those are large employers that would otherwise skew results and make it hard to understand what’s happening with most organizations, Azzam noted.
Workforce surveys showed that understaffing is a big driver of burnout, and “staff feel it more acutely than leaders realize,” he said.
The report recommends strengthening volunteer recruitment and management, since volunteers play a crucial role at many of these organizations.
It also recommends continued investment in Mid-County and North County nonprofits, which have seen recent growth, and finding more ways to collaborate.
That may mean co-locating or sharing services, said Anna Whatley, director of Collaboration for Social Impact at the Foundation.
The Santa Barbara Foundation hosted a State of Nonprofits event on June 2 and followed up with a webinar explaining the report findings.
