The number of people seeking help from health and human services nonprofits during the COVID-19 pandemic have gone up between 10% and 28%, while those same agencies have seen their funding and workforce cut in half, according to survey responses from hundreds of organizations and documented in a new study by the University of Washington.
As the number of COVID-19 cases continues to surge, so does the demand for help from these nonprofits, which are struggling to respond and, despite federal and state aid, have spent down their reserves.
While 56% of responding agencies have successfully accessed CARES Act Paycheck Protection Program loans to support their employees, they are still facing a drop in donations; fewer volunteers, who are rightfully concerned about the health risks of reaching out; and strained staffs — some working reduced hours, some furloughed, but many let go for good.
“I am very concerned about the sustainability of the mental and physical health of the nonprofit staffs,” said Erica Mills Barnhart, the director of the Nancy Bell Evans Center on Nonprofits and Philanthropy at UW, which released the study — titled “Local Impacts of a Global Crisis” — last week.
The study was conducted between June and July of this year. It was the brainchild of Ph.D. candidates Emily A. Finchum-Mason and Kelly Husted, who reached out to 701 nonprofits and heard back from 209.
The responding agencies asked to remain confidential, Mills Barnhart said.
An analysis by the nonprofit accountability platform Candid used tax filings to model the number of agencies likely to close. One model estimated more than 8% of nonprofits nationally will be forced to close, while “more extreme” models predict losses upward of 25%.
There is some good news to report, though, Mills Barnhart said.
Nonprofits have become incredibly innovative, with 64% changing how they provide programs and services. Approximately 58% of nonprofits have altered their short-term organizational goals, and nearly half have changed their programmatic priorities, the study said.
But those changes have come at a cost: More than 60% of nonprofits surveyed had to pause programs, and 14% had to end them all together. Arts organizations are seeing a drop-off in demand “that is jeopardizing their ability to survive,” the study said.
Still, nonprofits are rising to the challenge.
“What we saw is that nonprofits are shifting gears and responding quickly,” Mills Barnhart said, by reaching out to clients and donors online; and partnering up with other agencies to deliver food and other services. There is strength in numbers.
She is most impressed that the new partnerships among agencies that have never worked together before.
“It’s huge,” Mills Barnhart said, because it means agencies are “disrupting some siloing” in the process. In other words, they are expanding their reach, together.
Education advocacy organizations are reaching out to nonprofits led by people of color, “shifting the balance of power between white-led organizations and BIPOC (Black, Indigenous and people of color) organizations,” she said. “It’s one of the more heartening things that we have seen.”
Ph.D. candidates Finchum-Mason and Husted saw what was happening in the nonprofit world early on.
“They said, ‘This is a big deal and we need to get on it, and we need to get on it fast,'” Mills Barnhart said. “In the world of academia, this came out at warp speed.”
They also wanted to get the work out before the next legislative session, when nonprofit funding decisions are made — and when many other entities hurt by the pandemic will be pulling at the state’s pursestrings.
“This is a call to arms for foundations and legislative officials who are supporting these nonprofits,” Barnhart said.
As for what the community can do?
Wealthy individuals can take advantage of the Cares Act, which allows people to deduct up to 100% of their adjusted gross income for charitable giving; and allows an above-the-line deduction for individuals who make charitable contributions of up to $300, and up to $600 for eligible couples filing jointly — but just for 2020.
Mill Barnhart understands that people may be nervous about giving, when so much is unknown.
“There is a psychological toll, and it’s unclear when this is going to end,” she said. “So it makes sense that folks are going to make sure that their families are cared for. But Americans are very generous.”
About 72% of charitable donations come from individuals and are “gold,” Barnhart said, because the agency can use it any way it wants.
“Whatever organization speaks to your heart, give generously,” Mills Barnhart said. “And don’t have any hesitation about how your money is being spent. It will be well spent. They’re all hurting.”