North Carolina’s non-profits are being hit hard by the state’s budget troubles at a time when a poor economy also has brought a big drop in private giving, says a new report from the NC Justice Center.

State grants to non-profits fell by more than 25 percent in fiscal year 2009-10 as North Carolina wrestled with a growing budget deficit and a drop in tax collections during the recession, the report says.

Even as the economy is making funds scarce, it’s inflating the need for the services non-profits provide, said Edwin McLenaghan, a public policy analyst who wrote the report.

“With the Great Recession continuing to increase the need for the services nonprofits provide, this is increasing the burden on struggling families and communities,” McLenaghan said a statement announcing the report.

With the budget cuts, nearly half of non-profits in North Carolina reported reducing their number of employees in 2009.

The drop in state funding comes as non-profits are contending with a decline in private giving as individuals have lost income and foundations have seen their endowments shrink.

A new report from the Chronicle of Philanthropy says donations to the nation’s 400 largest charities declined by 11 percent last year, the sharpest drop in 20 years.

The Chronicle report says the reduction felt by the top 400 charities was nearly four times as great as the next biggest annual decrease of 2.8 percent in 2001.

(Photo: FreeFoto.com/Ian Britton)