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May 18, 2022
 
Mass. Nonprofits Face Operating Uncertainty at the Start of 2022
Road Ahead 2022

December 28, 2021 — Heading into 2022, finding enough staff and volunteers looms large for Massachusetts nonprofits—from the Berkshires to Cape Cod—as they continue to cope with continued operational uncertainty resulting from the coronavirus pandemic, sector leaders say.

“Burnout” is the term they most commonly used to describe nonprofit staffing and volunteer shortfalls, which are affecting nonprofits of all sizes across all sub-sectors and position levels. For example:

  • Liana Toscanini, executive director of the Nonprofit Center of the Berkshires in Great Barrington:For the small guys, of which we have many, burnout, finding volunteers, and need for more funding represent the top challenges.”

  • Jay Linnehan, president and CEO of the Greater Lowell Community Foundation, based in Lowell: “Burnout of workers and day-to-day operations still beholden to COVID numbers [are] taking a toll.”

  • Geeta Pradhan, president of the Cambridge Community Foundation in Cambridge: “Cambridge nonprofits continue to address urgent needs in the community, and for many the needs have outpaced organizational capacity, resulting in staffing shortfalls and staff and volunteer burnout.”

  • Kristin O'Malley, executive director of the Cape Cod Foundation, based in South Yarmouth: “Many organizations are struggling to keep their existing staff motivated and prevent burnout after almost two years of operating at a breakneck pace while under-resourced.”

Underscoring the point, Jim Klocke, president and CEO of the Massachusetts Nonprofit Network in Boston, the state’s nonprofit trade association, said, “COVID uncertainty will be even more challenging for nonprofits that deliver services in-person, whether at their organization or in clients' homes.”

Sarah Rose, director of engagement at the SouthCoast Community Foundation in New Bedford, who noted that the lack of a robust talent pool historically has been an issue for SouthCoast nonprofits, said the situation “has become even more difficult with the Big Quit, a phenomenon of unprecedented resignations since the beginning of the pandemic.”

Added Beth Francis, president and CEO of the Essex County Community Foundation, based in Danvers: “Staffing is one of the biggest issues nonprofits will face in the coming year. It’s just taking longer to find candidates to fill open positions.”

Lack of volunteers, many of whom are reluctant to commit to nonprofits due to COVID-related concerns, is adding to the strain. Pradhan said some local food pantries staffed by volunteers, who themselves benefit from the pantries, are experiencing burnout as demand for food continues to rise.

Of equal concern is the trickle-down impact of staffing shortages on the ability of nonprofits to deliver services.

Toscanini said staffing issues had impacted arts organizations, a major nonprofit sub-sector in the Berkshires, even before the Omicron variant of the coronavirus began to spread rapidly across the state.

“Huge gaps” in child care capacity and lack of mental and behavioral health workers are top challenges across Cape Cod, said O’Malley.

Smaller Nonprofits Face Special Challenges

Increasing revenue and strengthening finances are hurdles that smaller nonprofits face entering 2022, Klocke said: “Many nonprofits used the federal PPP [Paycheck Protection Plan] refundable loan program to get through the pandemic. PPP dollars were very helpful, but they were one-time funds. Nonprofits that relied on them to stay afloat now have to find revenue to replace their PPP funds in 2022.”

O’Malley agreed, adding that many smaller organizations can’t take advantage of special state and federal relief packages, because they do not have the capacity to manage associated reporting and other requirements.

In addition, according to Pradhan, smaller organizations are at a competitive fundraising disadvantage, compared to more established nonprofits, which can deliver at scale and have the tools to be more visible to donors.

Smaller organizations responding to pandemic restrictions, like their larger counterparts, have increasingly looked to digital fundraising strategies, but, Francis said, “Digital fundraising requires a different capacity and a whole new set of tools and resources, which smaller nonprofits aren’t always equipped to implement.”

Linnehan observed that transportation, which is key to many nonprofit services, is a challenge for nonprofits, particularly smaller organizations, because as of the end of 2021 it has been difficult to hire for those positions.

Upward pressure on compensation due to increasing minimum wages and labor shortages strains most nonprofit budgets, but disproportionately negatively affects smaller organizations, which tend to operate more leanly, Rose said. The minimum wage in Massachusetts, now $13.50 an hour, will increase to $14.25 on Jan.1.

2022 Will Offer Fundraising Opportunities—and Impose Demands—on Nonprofits

Uncertainty will characterize the nonprofit fundraising landscape next year, Klocke said, who noted that with the small universal federal charitable deduction expiring on Dec. 31, most donors who don't itemize deductions won't be eligible for any federal charitable deduction on their 2022 incomes.

While Linnehan said nonprofits will face ongoing challenges when it comes to fundraising, Toscanini struck an optimistic note about Berkshire nonprofits, observing, “We live in an extraordinarily philanthropic area and individuals, businesses, and foundations have stepped up and most think they will continue to sustain or increase their giving.”

Strong financial market performance has been linked to strong donor support for nonprofits in 2021, but whether that will last is unknown. For the moment it “provides an opportunity for smaller organizations to get in front of donors, who are enjoying historic investment returns, for operating and other needs,” Rose said.

O’Malley suggested that donors are likely to be even more supportive next year, especially for operations and capacity building, while continuing to loosen restrictions and around applying for and reporting on grant funding. However, she noted, demonstrating and communicating to donors the impact of their support “will be essential for nonprofits to continue into 2022, as will offering donors opportunities to stay engaged via online and virtual platforms.”

Pradhan said funding from the federal American Rescue Plan Act (ARPA) creates an opportunity for the nonprofit sector to work with municipal and state governments to access funding for basic needs and build systems to deliver services and goods.

“Nonprofits will really need to think outside of the box for ways to engage donors [in 2022] – and keep them engaged when many still have yet to open their doors to visitors,” Francis said.

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