Charities are suffering financially during coronavirus crisis, despite increased need
‘About 80 percent of nonprofits have fewer than three months of cash in the bank’
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Much like the rest of the U.S. economy, charities are suffering from the coronavirus pandemic.
Without the ability to hold fundraisers and other events, many organizations are seeing a decline in revenue, which could hinder their ability to offer services that people need now more than ever.
“Our research has shown that about 80 percent of nonprofits have fewer than three months of cash in the bank,” Jacob Harold, the executive vice president at Candid, a nonprofit researcher, told FOX Business’ Gerri Willis. “So if this crisis lasts a whole lot longer, we're sure to lose at least some nonprofit organizations.”
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Earlier this month, Charity Navigator and Reuters conducted a study on the impact of the coronavirus and the ensuing economic shutdown on nonprofits.
According to the study, 74.6 percent of respondents had to cancel a fundraising event and 83 percent of respondents said they are “suffering financially.”
The study also reported that 64 percent of respondents had to cut back on programs, but 50 percent said they have seen an increase in demand for programs “due to the pandemic/economic shutdown.”
Before President Trump signed the CARES Act last month, a group of more than 100 nonprofits asked for $60 billion to be set aside specifically for the sector, according to a report from The Wall Street Journal.
The relief package didn’t end up including anything for nonprofits, though some organizations can apply for federal loans, The Journal reported.
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‘We have seen a significant decline in revenue so far, mostly because we had a gala event scheduled for May and that event has now been postponed,” Linda Tantawi, the CEO of Komen Greater New York City said.
According to The Journal, Habitat for Humanity had to close its home-goods stores -- which brings in about $500 million every year -- and could be forced to close some of its 1,200 chapters.
Meanwhile, the YMCA -- which has 2,600 locations -- expected it will lose $400 million in April, The Journal reported.
Dale Bannon, the secretary of development for the Salvation Army, told Gerri Willis that the organization has had to get creative with its fundraising.
“The Salvation Army typically has spring fundraisers. They're called our annual dinners,” Bannon said. “Some of those fundraisers in local communities raise thousands of dollars to sustain our operations. Most of them have been canceled, obviously, while we have some that might be doing virtual fundraisers.”
According to a survey by Charity Navigator and Reuters, 83 percent of nonprofit respondents said they are “suffering financially.” (iStock)
Some organizations are also having to lay off workers. According to the Charity Navigator study, 27 percent of respondents said they have laid off staff or are planning to because of the pandemic.
According to The Journal, more than 12 million people work for nonprofits.
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Giving hasn’t completely gone by the wayside, but much of it has been focused on the pandemic.
According to Candid, $8.3 billion has been given to supporting the coronavirus response.
The top funders include Twitter CEO Jack Dorsey, who has given $1 billion, Google’s Contributions Program, which has given $908 million, ByteDance, which has given $417 million, Mastercard Contributions Program, which has given $275 million and the Bill and Melinda Gates Foundation, which has given $261 million.
But other organizations still need funding, even if they aren’t directly responding to the coronavirus.
That’s why GivingTuesday has launched another day of giving, Charity Navigator President and CEO Michael Thatcher said.
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Typically, Giving Tuesday is right after Thanksgiving. However, because of the “unprecedented need caused by COVID-19,” May 5 will serve as GivingTuesdayNow.
“Nonprofit organizations are banding together to run a GivingTuesdayNow to try and stimulate giving and attention to the nonprofit sector so that we can keep doing the essential work that we do,” Thatcher said. “Give generously. Now is the time to stay true to the nonprofits that you have loved and supported over the years. They need your help.”
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