04/02/2010 05:12 am ET Updated May 25, 2011

Recession Forces Nonprofits To Change: Some Cut Back, Others Merge

"We've had funding cut after funding cut, and we never know when the next shoe is going to drop," says May Shields, Hearth's chief operating officer.

The story is the same across the country. The once-booming nonprofit sector is in the midst of a shakeout, leaving many Americans without services and culling weak groups from the strong. Hit by a drop in donations and government funding in the wake of a deep recession, nonprofits -- from arts councils to food banks -- are undergoing a painful restructuring, including mergers, acquisitions, collaborations, cutbacks and closings.

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