COVID-19 is crushing those who help others in need. What happens when nonprofits die?
There’s the data, and then there’s the lived experience.
For Pierce County nonprofits, increasingly they tell the same story.
Amid a raging pandemic and a time of incredible financial uncertainty, many — if not most — are struggling to scrape by.
Need is up, particularly among nonprofits that serve the people hit hardest by COVID-19.
Funding is down, particularly among nonprofits run by or focused on helping people of color.
So is volunteerism.
All told, it’s a terrifying scene that many fear will get worse before it gets better.
That’s why a new report from the University of Washington Nancy Bell Evans Center on Nonprofits and Philanthropy came as no surprise.
According to Erica Mills Barnhart, the center’s co-director, the study confirms what anyone working at ground level will tell you: Alarm bells should be sounding because the fate of many nonprofits hangs in the balance.
Simulations estimate that over the next two years anywhere from 8% to 25% of U.S. nonprofits could cease operations, Barnhart said.
It’s a sobering forecast, she said, given the important role nonprofits play in our society, including here in Washington, where the UW study focused.
Barnhart said nonprofits provide an economic engine while also serving as a fragile public safety net.
She also said that the reach of nonprofits has grown in recent years.
In the decade preceding 2017, the nonprofit sector grew by 18.6%, Barnhart said, marking an expansion fueled, at least in part, by these organizations “being asked to do … things that the government has typically done.”
“Nonprofit’s touch almost every American’s life,” Barnhart told The News Tribune this week, noting that the impact of nonprofit organizations stretches from areas like child care, after-school programs and food banks to the arts and social services.
She said she hopes the recent study would help to illuminate that fact and provide a call to action.
There’s good reason for concern, she said.
The study found that Washington nonprofits have experienced an average drop in total revenue of nearly 30% since the onset of the COVID-19 pandemic, with declines in total revenue projected to continue over the next year by an average of 16%.
At the same time, demand for nonprofit services has increased across the sector by roughly 10%, with demand for services from health and human services organizations up roughly 29%.
“It’s a lot,” Barnhart said. “Big declines, and big increases in demand. That’s the key takeaway.”
As the rise in demand for health and human services helps to illustrate, Barnhart said, the pandemic has affected some nonprofits more than others.
Barnhart noted that funding for organizations that are operated by or serve Black, indigenous and other people of color has historically lagged behind white-led organizations.
Compound this with the fact that the coronavirus has taken a disproportionate toll on minority communities, and the disparity is exacerbated, she said.
Arts groups and museums also have struggled, Barnhart said, particularly if they rely heavily on fees for services or admissions.
Citing research from ArtsFund, a local arts grant provider, the study noted that across the central Puget Sound region, 73% of museums, theaters and other arts nonprofits have been forced to lay off or furlough staff.
Nonprofits forced to close due to the pandemic might be gone for good, Barnhart said.
“Organizations have gone through their cash reserves and accessed every possible revenue source, so all of that is gone,” she said.
While the landscape for local nonprofits is treacherous and likely will continue to be so over the coming years, there is reason for optimism, according Seth Kirby, the vice president of community impact at the Greater Tacoma Community Foundation.
Although many of the struggles highlighted in the UW study mirror what Kirby has found working with local nonprofits — for instance, the Pierce County Connected COVID-19 emergency response fund has received more than $20 million in requests since March — he also said these organizations tend to be innovative and resourceful, by design and necessity.
They’re both strengths that can help many nonprofits survive the coming years, he believes.
What local nonprofits need now more than ever, Kirby said, is direct, no-strings-attached contributions from supporters.
That’s particularly true as future COVID-19 financial relief from the federal government remains uncertain and the short-term parachute provided by the federal Paycheck Protection Program closes, he argued.
Unlike government contracts, grants and some contributions from philanthropic organizations, Kirby noted, contributions from individuals allow nonprofits the flexibility to spend in ways that help keep the doors open today.
“Nonprofits are really the safety net of our society, and they’re an essential part of our economy,” Kirby said.
“If we are concerned about the needs of those who are most impacted by COVID-19 ... then the fastest and easiest way to help is to make a donation.”
