In June 2020, the Greater New Orleans Foundation and University of New Orleans released a study on the state of the nonprofit sector in Southeast Louisiana during the COVID-19 pandemic, based on surveys collected from late March to mid-April 2020. Download the study here.
To get updates, GNOF and UNO organized a virtual “town hall” in late July, open to all nonprofits throughout the region. Over 60 nonprofit leaders joined the town hall, and about half participated in small group discussions, sharing the following updates.
The duration of the COVID-19 pandemic is taking a toll
Town hall participants explained that changing conditions and government regulations around opening facilities responsibly are difficult to anticipate and manage, and one positive case of the virus can cause sites to shutter. The increased costs of cleaning and equipment are an additional burden. Providing services outdoors is rarely feasible and still subject to capacity limits. For nonprofits providing music performances and direct services like counseling, virtual delivery methods may “lose the magic,” and are complicated by the digital divide with many clients.
These challenges to connecting and the social isolation they create, along with the longer-term impact of the pandemic on our communities, have taken a toll on nonprofit clients as well as the staff who serve them. In addition to the health and economic crises, clients are experiencing trauma and mental health challenges, and staff are working harder to help them under stressful conditions. Nonprofit staff are increasingly at risk of burnout, so leaders and funders need to be sensitive to their wellness and promote self-care.
Nonprofits are diversifying fundraising strategies
Adding to the stress, a major finding from the spring survey was the financial vulnerability of our nonprofit sector. A fifth of nonprofits in our region had one month or less of operating cash on hand to pay bills, and only one third had a reserve fund to rely on for emergencies. In the superseding months of “rolling cancellations” and greater operational costs, a major source of emergency revenue has been the federal Paycheck Protection Program (PPP), available to businesses and nonprofits with between one and 500 employees to retain payroll.
According to public data from the Small Business Administration, 1,144 nonprofits in our region received PPP loans, representing about 4% of all loans granted to organizations in Southeast Louisiana. These loans were reported to have retained 32,628 nonprofit jobs. That figure represents over 10% of all jobs retained by the program in the region, and 60% of the approximately 54,610 total nonprofit jobs in the region according to the Bureau of Labor Statistics. In fact, on average, nonprofits each retained triple the number of jobs compared to for profit borrowers.
However, PPP funds are running out, with no immediate hope of expansion in Congress. Town hall participants shared that they are focusing on diversifying their fundraising strategies to include private grant writing and virtual donor campaigns. For instance, our region’s Give NOLA Day on June 2 was remarkably successful given the challenging economic climate, with both the total number of donors and total amount of donations increasing over the 2019 event.
Nonprofits are adapting and collaborating to meet critical community needs
Nonprofit services are undoubtedly more critical than ever. Town hall participants described that nonprofit staff are proactively maintaining connections with clients and linking them to essential resources. Nonprofits are also expanding their reach by collaborating with new partners to meet not only their clients’ needs, but also those of their families and broader community. In this way, nonprofit staff are “going above and beyond” to advance their organization’s mission.
As the spread of COVID-19 causes continued upheaval in just about every aspect of society, sustainability is becoming challenging. Long-term restructuring of operations, services, and programs is inevitable for many of our nonprofit partners. During the restructuring process, it is important that nonprofits consider strategic partnerships as a way to maximize impact and create cost savings and efficiencies. This could include joint programming or consolidated administrative services. For some nonprofits, a merger may be the best option.
Our nonprofit sector in Southeast Louisiana continues to be challenged by the COVID-19 pandemic, but it also continues to rise to that challenge. The extended duration of the pandemic is taking a toll on clients and staff. And the financial challenges deferred by PPP are reappearing, threatening some nonprofits’ solvency and ability to retain critical staff. Nevertheless, nonprofits are resiliently finding ways to diversify funding, partner, and remain in operation to serve our community’s critical needs.
If you have suggestions for inquiries about the sector we might explore, or any other questions or comments, please email. Thank you again to all those nonprofit leaders who completed our survey last spring, and to all the participants in our town hall.
|Dr. Steve Mumford
Assistant Professor, Political Science Department
University of New Orleans
|Kellie Chavez Greene
Director, Nonprofit Leadership and Effectiveness
Greater New Orleans Foundation