Nonprofits Navigate Uncertain Times Amid Coronavirus Pandemic

Performing arts centers. Hospitals. Museums. Social service agencies.

Nonprofit organizations in local communities are as vast and varied as the private businesses that operate and make up a majority of a city’s economic engine. But as state leaders gave orders for residents to stay at home, and for nonessential businesses to close their doors, the nonprofit agencies that make up the lifeblood of communities might not have been top of mind for most Americans.

“You have big, anchor institutions like the Smith Center, or St. Rose Hospitals, and you also have small, tiny organizations — not unlike small businesses — that play a critical role in social and human services,” said Jessica Word, associate professor in the School of Public Policy and Leadership within UNLV’s Greenspun College of Urban Affairs.

Some organizations — like those that are helping Southern Nevada’s homeless population — are on the front lines of the COVID-19 pandemic, providing daily, in-person services to some of the community’s neediest, with limited resources and while also facing ballooning costs. Others, like performing arts centers, have had to temporarily close their doors, and cancel events and live performances, steps that add up to lost revenue.

Will the front-line responders have enough resources to keep going while facing incredible odds? And will nonprofits that have been forced to close be able to re-open their doors once the coronavirus pandemic ends?

Word believes so — as long as the community steps up to support them.

“These organizations exist to serve a need in our community,” said Word. “We might not be able to save them all, but as a community, we need to ask ourselves: what is important to us, and what are the services we can’t live without? If we let a bunch just fall away, it will end up being much more costly to us as a society than it would be if we continue to support and sustain them now, in their time of need.”

We caught up with Word who gave us a snapshot of the current nonprofit landscape, the unique challenges the sector is facing, how the government’s response to this crisis has differed from the 2008 Great Recession, and where we go from here.

What does the current nonprofit landscape look like?

About 30 to 40 years ago, through a process known as devolution, the size of governments began to shrink. The idea was for governments to be more nimble and responsive, and they began to contract out services that they used to provide to nonprofit agencies.

This move led to incredible growth in the size and power of the nonprofit sector. There are about 2,500 nonprofits operating in Clark County alone, and nationally, they make up about 10 percent of employment — so they’re a relatively big part of our economy. Overall, devolution has been good for the nonprofit sector in terms of innovation, and they can provide greater advocacy on behalf of our diverse communities, which is important, as government agencies can’t advocate the way nonprofits can.

On the other hand, in crises like the COVID-19 pandemic, the organizations that are delivering social services aren’t run by the government, and therefore, are more fragile. Government doesn’t really go out of business. It’s an enduring, almost indestructible institution. Nonprofits, however, like businesses, go out of business fairly often. So these crucial community services are less stable in a time of crisis.

What are the challenges, generally, that nonprofits are now facing?

Nonprofits right now are facing a stark landscape of uncertainty.

It’s a really challenging time, as most nonprofit organizations have only a couple months of reserve cash on hand. On top of that, with work-from-home restrictions, some are now facing unbudgeted IT costs, unbudgeted cell phone costs, and some essential services are now facing unbudgeted cleaning and overtime costs.

Those who work for front-line organizations, like those who are helping the homeless, don’t have the ability to work from home. They’re working really closely with individuals to help secure shelter, and to help them isolate. These organizations — even if they do have the cash on hand — are having a difficult time obtaining toilet paper and cleaning supplies with store-purchasing limits.

For nonprofits, especially in Las Vegas where we see a lot of event-based fundraising, the coronavirus pandemic has put a halt to spring fundraisers and galas, which are usually very big pieces of their revenue. Other nonprofits, like professional associations, have had to cancel conferences, and might not be able to recoup funds for canceled hotel and space reservations.

Some organizations, like the Boys and Girls Club, have gotten creative, and have hosted online fundraising events in order to raise the cash they need right now.

How has the government’s response to this crisis differed from the 2008 Great Recession?

There are some bright spots! In the Coronavirus Aid, Relief, and Economic Security (CARES) Act, nonprofits are eligible for loans and grants, similar to those that are offered to small businesses. Nonprofits were not bailed out during the Great Recession. So the fact that the federal government remembered and included nonprofits during this crisis is huge. The paycheck protection program offered through the CARES Act should help nonprofits meet payroll obligations and keep people employed through the crisis. (For more information, visit this helpful link).

The legislation also allows nonprofits to apply for disaster loans. But since those will need to be paid back, nonprofits will have to consider if they will be able to meet those financial obligations in the long term.

Another bright spot is that individuals who make cash contributions to nonprofit agencies in 2020 will be eligible for up to a $300 tax deduction. This is one way to encourage donors to get off the sidelines and support local charities.

Will charitable giving change in light of COVID-19?

I suspect that there will be a pretty huge contraction in giving, initially. During the Great Recession, giving was down, but only by about 8 percent.

Over time it usually rebounds. Longtime donors and supporters tend to remain longtime donors and supporters. It might just take them longer to fulfill a pledge or make a gift.

How is the community helping? How can I help?

There’s really great things going on even amid all of this uncertainty.

For example, Three Square is reporting a record demand for food. But a lot of our local businesses and resorts stepped up and donated the food that was going to go unused because of the shutdown. Some businesses are also working with nonprofits to deliver meals to those in need.

Nonprofits have also done a nice job of innovating. One local nonprofit — Foster Kinship — which is run by a former student of mine, has created a drive-up supply distribution for foster families. This is crucial, because some of these caregivers are grandparents, and this is a way to ensure that they aren’t risking illness by going out to the grocery stores.

These organizations are doing really important work while facing very incredible odds. Government is one of the biggest funders of nonprofits, and they’re likely to take some hits and budget cuts given how dependent Las Vegas is on tourism. Hopefully though, the government will respond and increase funding in order to shore up these organizations.

But we as a community need to step in and fill the gaps. We need to determine what we as a community value as most important. What are the services we can’t live without? It could mean the difference between families staying together or not, people getting fed or not, people having housing or not.

I would direct people to the United Way of Southern Nevada, which is serving as a central hub during this crisis. It serves as an intermediary, and pre-vets organizations to ensure that they’re legitimate. Additionally, the Office of Service Learning and Leadership at UNLV is working with local nonprofits to coordinate virtual volunteer opportunities, and is also encouraging members of the campus community to give back through their expertise in virtual, relevant ways.

The COVID-19 Response Fund from the Nevada Community Foundation is a good place to start, too.

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