Nonprofits Are Struggling to Do Extra With Much less Cash, however Donors And Volunteers Can Assist
By Erica Mills Barnhart, University of Washington
In the past, nonprofits received nearly a third of their donations in December. In the past few years, this deluge of giving has started on #GivingTuesday, an online campaign that takes place on the first Tuesday after Thanksgiving. We asked Erica Mills Barnhart, a nonprofit scientist at the University of Washington, to explain how nonprofits are holding up in the face of the COVID-19 pandemic and the economic hardship it has brought about, and why anyone with money is considering should give some of it away now.
1. How are nonprofits doing?
Many are in trouble.
According to a study of how the pandemic is affecting nonprofits in Washington state, my colleagues and I found that demand for services is 10.2% higher while funding is down 29.5%.
In addition, nonprofits reported losing up to half of their usual volunteer hours. This decline in hands-on support increases the burden on nonprofits trying to do more with less.
The situation in Washington state reflects what is happening at the national level.
Simulation models developed by Candid, a nonprofit information service, estimate that 8-25% of nonprofits in the United States will have to close in the next year or two.
2. Are some nonprofits more affected than others?
Yes. For example, we found that Washington state health and health organizations are experiencing a 29% increase in need for help – well above average. While their funding projections aren’t as bleak as those for other types of nonprofits, funding doesn’t match the needs these groups face for their services.
Organizations that serve black, indigenous and other people of color have particular problems as COVID-19 has placed a disproportionate burden on these communities and increased their needs. Funding for organizations run and served by people of color, however, falls short of funding for organizations run by white. This inequality exacerbates the funding gap for those hardest hit by the pandemic.
Art groups were also particularly affected. ArtsFund, a nonprofit that grants art groups, found that in Seattle and the rest of the Central Puget Sound region, 73% of museums, theaters, and other nonprofits had laid off some of their employees or on leave.
While the move to online programming has some advantages, such as the ability to reach a wider audience, the report concludes that “the future of live theater and music is at risk”.
3. What is at stake?
From hospitals and schools to civic leagues and cultural centers, nonprofits help keep Americans healthy, engaged, informed, and educated. Nonprofits not only serve and support communities of all kinds, they are also an economic engine.
According to researchers at Johns Hopkins University, these organizations are the third largest source of employment in the country after retail and manufacturing. They made up about 1/10 of all jobs in the private sector before the pandemic. And the nonprofit sector grew 18.6% in the decade leading up to 2017, outperforming for-profit employment, which only grew 6.2% according to this report.
Hence, any stagnation or loss of jobs in the non-profit sector will weigh on the entire economy.
It’s also about life. Many hospitals and health centers are not for profit and some of them cannot meet all of their patients’ needs. At the current rate of spread of the coronavirus pandemic, even doctors at one of the best prepared hospitals in the country don’t believe they will be able to meet the need for care.
Nonprofit Feeding America found that roughly 50.4 million Americans are now food unsafe, meaning they don’t have consistent access to enough food to lead an active, healthy life. That was a significant increase from about 35 million Americans who were food unsafe at some point in any given year prior to the COVID-19 pandemic. The number of children suffering from food insecurity in 2020 rose from 11.2 million to an estimated 17 million – nearly one in four American children.
5. What can everyone else do?
The answer is simple. Support non-profit organizations as much as possible.
Fortunately, Classy, a fundraising information website, found that 39% of Americans say they will definitely or likely give more in 2020 than in 2019.
Individual donations are crucial for nonprofits as they help pay for things that other sources of income may not cover, such as rent, equipment, and salaries. Many – if not most – Americans can use a Congress included in the CARES Act for $ 300 to charity. This year-long option is available to taxpayers who do not list their tax returns for money paid directly to exempt nonprofits. The CARES bill also contained a provision designed to encourage the richest Americans to give away more wealth in 2020.
People who have no money to spare can continue to support nonprofits by encouraging elected officials to involve nonprofits in economic relief efforts and volunteering even if they do so virtually.
Companies can also support non-profit organizations with donations. Corporate philanthropy can potentially boost a company’s reputation with consumers, who increasingly choose what to buy based on how they feel about companies.
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Foundations, organizations that donate money to charity can also take action. Many are already taking steps to address the encouraging COVID-19 crisis.
But nonprofits will no doubt continue to have problems in 2021. So I think it is extremely important that everyone who can afford to donate to nonprofits – including individuals, foundations, and corporations – does so. This inflow of money would go a long way.
Erica Mills Barnhart, Associate Professor and Director of the Nancy Bell Evans Center for Charitable Organizations and Philanthropy at the University of Washington
This article is republished by The Conversation under a Creative Commons license. Read the original article.