Many nonprofit leaders say that increased financial support from funders and the government helped their organizations fare better through 2020 than originally anticipated, a report from the Center for Effective Philanthropy finds.
Based on a survey conducted in February of CEP's Grantee Voice panel, the report, Persevering Through Crisis: The State of Nonprofits, found that 66 percent of respondents said the COVID-19 pandemic has had a "moderate" (38 percent) or "significant" (28 percent) negative impact on their organizations, down from 84 percent (46 percent and 38 percent, respectively) in a survey conducted in May 2020. Respondents who reported "significant" (5 percent) or "moderate" (11 percent) positive impacts said that remaining open during the pandemic helped raise public awareness of the organization, or that they were able to expand their online offerings and broaden their reach, while the majority of those who reported negative impacts described difficulty delivering programs and services.
At the same time, the survey found that while 81 percent of respondents in the May 2020 survey said they had reduced or expected to reduce programs or services and 80 percent said they had or expected to draw from reserves, only 58 percent and 38 percent of respondents in February said they ultimately did so. According to the report, 57 percent of respondents reported a year-over-year decline in revenue in 2020, while 32 percent saw an increase; 50 percent saw an increase in demand for services; and 39 percent faced rising costs. More than half of respondents also reported increases in government grants, including Paycheck Protection Program (PPP) funding (58 percent), and foundation grants (52 percent), and nearly half saw increases in major gifts from individual donors (46 percent) and gifts from those giving less than $7,500 a year (45 percent).
Many nonprofit leaders said that their foundation funders were flexible, responsive, and communicative during the crisis, with majorities of respondents reporting that at least some of their funders provided flexible support (66 percent) and unrestricted support (64 percent); smaller percentages received organizational capacity-building support (47 percent), multiyear support (34 percent), and multiyear unrestricted support (18 percent). The report's authors note, however, that organizations led by women and nonprofits serving certain communities — including Asian American/Pacific Islander, Middle Eastern, and Native American communities — were less likely to say that their funders were flexible, responsive, and communicative.
"For many, 2020 was tough, but the generous support of their funders helped them fare better than they originally expected," report co-authors Kate Gehling and Hannah Martin wrote in a blog post. "Sadly, others were largely left out of this essential support. For almost all nonprofit organizations, the ultimate takeaway is clear: they still need increased support from their funders in the near future."
(Photo credit: LA Regional Food Bank)