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60% of Nonprofits Concerned For Viability

60% of Nonprofits Concerned For Viability

by Bill High

The coronavirus epidemic has disrupted life for all of us, ranging from the merely inconvenient to major challenges—lost jobs and closed businesses, in addition to those who have suffered from severe illness during this time.

These challenges have affected the nonprofit sector as well, in the form of lost jobs and lost funding. These and other factors have many nonprofits concerned about their ability to continue operating long term.

In late March this year, the Nonprofit Finance Fund conducted a national survey of 465 nonprofits from all sub-sectors and states.  Here’s a quick snapshot of some of the findings:

  1. Events—for nonprofits relying on event revenue, they were experiencing a 75% reduction in revenue;
  2. Donations—50% of the organizations had seen a decline in revenue and 58% expected that trend to continue;
  3. Long-term Stability—60% of the organizations were concerned for long term financial stability with 64% expecting to face that concern later in 2020;
  4. Staff Reduction—56% experienced staffing reduction because of dependent care needs of staff.

Some of the nonprofits expressed the need for immediate funding for urgent needs. Nonprofit leaders expressed concerns about the impact of the instability upon the populations they serve but also on the employees who serve those populations.

 

1.6 Million Nonprofit Jobs Lost

To that point, of the more than 30 million jobs lost in the U.S., an estimated 1.6 million of the lost jobs are in the nonprofit sector.

Michael Theis, in “Covid Erased an Estimated 1.6 million U.S. Nonprofit Jobs from March through May” for The Chronicle of Philanthropy, notes that those figures represent 13% of all nonprofit jobs. The biggest losers were private education with 323,000 jobs and health care with 574,000 jobs.

While some of these jobs may be regained—particularly in health care—the long-term outlook remains bleak. If charitable giving declines as expected, the number of job losses could increase across all nonprofit sectors.

The net effect will be a decline in service that these nonprofits will be able to offer. That decline in services will be met by a greater demand for services. To illustrate a specific point, as people lose jobs, they turn to food banks. Those food banks might well be servicing more people with fewer staff.

I’m not sure if we sometimes realize how vital the nonprofit world has become to everyday life in America.  Many people rely upon a wide range of nonprofit services to make it through their day, their week, or to become thriving individuals.

These are issues we need to watch as we head deeper into the summer months and learn more of the long-term implications of the coronavirus era.

How are the nonprofits doing in your community, and are you particularly close to any to know the state of mind of their leaders and staff?

 

 

Photo by Per Lööv on Unsplash

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Published July 8, 2020

Topics: Culture Commentary

American ValuesCharitable GivingCulture CommentaryNonprofits

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