October 12, 2020

COVID-19 and the Nonprofit Industry

Few organizations or individuals could prepare for the massive repercussions of COVID-19. Six months after the onset of the virus, COVID-19 and the nonprofit industry continue to engage in a struggle.

The nonprofit sector is the third largest private employer in the nation, with “1.3 million nonprofit organizations employing roughly 12.5 million people, about 10% of the total who are working in the private sector.” Since COVID-19, around 1.6 million people are out of work, according to a Johns Hopkins University study.

However, nonprofits are more than just a large source of income for millions of Americans. The social, medical and other services provided by mission-driven organizations are absolutely essential to the communities they serve.

Breaking Down the COVID-19 Crisis

It seems intuitive that a dip in the economy would mean decreased donations or less generous donors. In reality, the loss in revenue is much more complicated. Tim Delaney, president and chief executive of the National Council of Nonprofits, told the New York Times that, on average, about half of all nonprofit funding actually comes from the services they provide. An additional third comes from government grants and funding, but only 9 percent of revenue came from individual donations. Additionally, many organizations relied on in-person activities and programs now impossible due to social distancing measures.

Some nonprofits were able to take advantage of the Paycheck Protection Program. Others, such as the Y.M.C.A. of Metropolitan Chicago, were not as fortunate. The number of employees put them above the 500 staff member limit outlined by the policy. Even when able to secure funding, many nonprofits found that it was simply not enough. Organizations cut staff, programs and services in order to maintain operations.

The Nonprofit Industry Moving Forward

Despite the threats facing the nonprofit industry, there is reason for hope. A recent survey published in the Global Trends in Giving Report suggested that donors are out there for nonprofits willing to meet them where they are. Online giving has proven to be an invaluable resource, with 80.5% of potential donors preferring that method for giving. Creative methods such as Facebook Fundraising tools or GoFundMe have proved very popular—surveyed individuals had used them at a rate of 32% and 49.7%, respectively.

However, standard, reliable tools can be just as effective. Organizations that sent regular, honest emails detailing the direct impact of donations inspired 64.8% of respondents to give repeatedly.

Peña Search commits to supporting our clients and friends in the nonprofit industry throughout the ongoing COVID-19 crisis. To learn more about them, click here.