November 30, 2020
Washington nonprofits feel more urgency during this ‘season of giving’
Nonprofit organizations such as food banks are struggling to deliver services in the face of declining revenues, according to a new University of Washington study.
The holiday season is typically the time of year when nonprofit organizations and charities see the biggest boost in donations — helped, in recent years, by the growing movement of Giving Tuesday, the Tuesday after Thanksgiving, that encourages people to contribute to the causes that inspire them.
But like everything else this year, Giving Tuesday falls in the middle of a global pandemic, and nonprofits throughout Washington and the rest of the country are struggling to continue to deliver the necessary services while facing a loss of volunteers and of revenue.
A new study from the Nancy Bell Evans Center on Nonprofits & Philanthropy at the University of Washington, drawn from a survey of more than 200 nonprofits around the state, finds many nonprofits are struggling. Results of the survey, prompted by the researchers’ concern over how nonprofits are faring during the pandemic, are posted on the center’s website.
“Overall, nonprofits report that funding is down 30%, and demand for services is up more than 10%,” said the center’s faculty director, Mary Kay Gugerty, a professor in the Evans School of Public Policy & Governance. “Health and human service organizations that are typically engaged in direct service report that demand for services is up 28%.”
That nonprofit organizations are having a difficult time may come as no surprise during the COVID-19 economy. Unemployment has remained high for most of 2020, businesses report plummeting revenue and many, amid quarantine restrictions that have been in place to varying degrees since March, have shut their doors permanently.
But the center’s study shows that the need for the services that nonprofits provide — from food banks to youth services to senior care to the arts — hasn’t gone away, and in many communities, has only increased.
“While many nonprofits have tried to rapidly adapt to new ways of delivering services, a lack of sustained, unrestricted funding jeopardizes their viability over the long term,” said co-author Emily Finchum-Mason, a doctoral candidate in the Evans School.
The center’s study found that:
- Over the next year, nonprofits expect revenue is likely to continue to decline on average by 4.2% for health and human service organizations, and by 25.6% for other organizations.
- Volunteer ranks have dropped 30% to 50%, limiting organizations’ ability to operate at full capacity.
- Nearly two-thirds of organizations in the sample have had to put one or more programs on hold, while 14% have had to end at least one program.
- CARES Act funding is helping: More than half of nonprofits have received Paycheck Protection Program loans, but organizations say the uncertainties involved in the program underscore its temporary nature.
- Over 68% of nonprofits report actively prioritizing the communities at greatest risk for COVID-19 infection and its economic ramifications – including people with low incomes, people experiencing homelessness, and Black, Indigenous and people of color communities.
So how to plan for the future?
With vaccines not expected to be widely available for months, and warnings by public health officials that many of life’s routines won’t return to normal until well into 2021, the economy isn’t likely to take a dramatic upward turn right away. Foundations and corporations may be positioned to help, and many are already taking steps to loosen restrictions on existing grants. Still, 60.8% of nonprofits reported that increased funding from foundations will be key to weathering this period, researchers said.
Individual giving also plays an important role.
“Individual donors can support nonprofits and take advantage of the CARES Act’s $300 charitable deduction, which is only available in 2020,” Gugerty said.
The report also contains recommendations for governments and institutional funders, including increasing clarity and ease for nonprofits to apply for and pay back loans – or have them forgiven — and for more money to be directed toward organizations led by and serving Black, Indigenous, and people of color.
The study was funded by the Nancy Bell Evans Center on Nonprofits & Philanthropy. Also contributing to the report were associate teaching professor Erica Mills Barnhart and doctoral candidate Kelly Husted, both of the Evans School.
For more information, contact Barnhart at enm@uw.edu or Gugerty at gugerty@uw.edu.
Tag(s): COVID-19 • Erica Barnhart • Evans School of Public Policy & Governance • Mary Kay Gugerty • Nancy Bell Evans Center on Nonprofits and Philanthropy
