Family Service of L.A. to Merge With Didi Hirsch Center in 1996

In a sign that the economic forces squeezing big business have trickled down to the nonprofit sector as well, two of Los Angeles’ oldest and best-known social service agencies said Tuesday that they will merge next year.

Family Service of Los Angeles, which has aided needy families since 1930, and Didi Hirsch Community Mental Health Center, the oldest walk-in mental health clinic in the West, will open in January as a single counseling and social service agency.

The new $11.5-million entity will retain the Didi Hirsch name with Family Service as a subsidiary, and will be among the broadest-based social service agencies in Los Angeles County, said Millard Ryker, executive director of Didi Hirsch.

The two organizations--and the scores of others like them--are familiar outposts for the poor and troubled of the Los Angeles area. Immigrant couples struggling to adjust to this country, single mothers struggling to raise their children, battered women, children frightened by quakes, high school students reeling from the aftermath of drive-by shootings--all have been helped and consoled by places such as these.

Both agencies primarily serve people who cannot afford private counseling and have satellite offices scattered throughout the county. The new joint agency will continue to operate 15 of those sites; only one--a Family Service center in Tarzana--is expected to close as a result of the merger.

Officials familiar with the nonprofit industry called the merger a sign of a coming trend. In the past few years, corporate downsizing and layoffs have dramatically reduced charitable donations at a time when the needs of the poor are increasing and government is slashing public aid.

Nonprofit agencies traditionally have been loath to merge for fear that corporate donors and foundations might scale down their grants. But reassurances from large funding agencies such as United Way and threatened cuts in county and federal funds have encouraged social service agencies to seek out economies of scale, officials said.

“This merger is unusual for nonprofits, but I think you’re going to see more and more like it,” said Jack Shakely, president of the California Community Foundation, which manages money left to charity by wealthy individuals and which gave the two agencies a consolidation grant.

“This is a tough time all over,” Shakely said. “There just isn’t a lot of money out there.”

The merger of the two local agencies, officials said, was initiated last year by Family Service, after a longstanding funding crisis threatened to shut down its family counseling program. The program--one of the county’s few remaining sources of affordable mental health care for the uninsured and working poor--had been underwritten almost entirely by a grant from United Way of Greater Los Angeles that had declined 74% in five years.

The cut, officials said, was a direct result of United Way’s own money woes. In the past five years, as bank mergers and layoffs cut into United Way contributions locally, the nonprofit giant was forced to slash its grants to smaller agencies by 41% overall.

Family Service tried to hold on to its counseling funds, but United Way officials said that program was pushed aside by other services--such as child abuse and gang intervention programs--that were considered a higher priority.

Ryker, of the Culver City-based Didi Hirsch, said his agency welcomed Family Service’s overture. Although Didi Hirsch has a range of services--dispatching counselors to victims of the Northridge quake, for example--its primary focus has been on treatment for the chronically mentally ill, and one of the agency’s goals had been to broaden its reach, he said.

Family Service, meanwhile, served three times as many people as Didi Hirsch, but had a much smaller budget and lacked access to Medicare reimbursement for some programs.

With a promise from United Way that it would do all it could to maintain the $475,000 in combined United Way funding the two agencies are getting now, the deal was struck, officials said.

“This was one of those opportunities where two and two made five,” said Family Service board Chairman Barry Smith.

The new agency is expected to be fully consolidated by Jan. 15, Ryker said, and will have the capacity to serve about 40,000 clients.