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April 16, 2021
Rebuilding, Resetting Will Be the Work of Mass. Nonprofits in 2021

December 29, 2020 — Vaccines to curb the coronavirus pandemic, which wreaked havoc on Massachusetts nonprofits this year, offer hope that life in 2021 can resume some sort of normalcy, but higher demand and strained resources for social services and other organizations—or not enough demand for arts and culture groups—portend a long road ahead, according to sector leaders.

Jim Klocke

Most immediately, Massachusetts nonprofits across the board will be focused on keeping operations moving forward, said Jim Klocke, president and CEO of the Boston-based Massachusetts Nonprofit Network, the state’s nonprofit trade association.

Rebuilding will be the order of the day for nonprofits, said Candace Winkler, president & CEO of Berkshire United Way, based in Pittsfield. “For those organizations that significantly reduced services or offerings, the issues they face may make them feel a bit like a start-up. Some will need to rehire staff and build services back up.”

Candace Winkler

Calling 2021 “a reset year” for many nonprofits, John Vasconcellos, president of the SouthCoast Community Foundation in New Bedford, said nonprofits “need to increase their role, responsibility, and engagement in addressing the issues that should be inconceivable in 21st century America: food insecurity, homelessness, a dysfunctional healthcare system, including mental health, and an educational system that should be extraordinary and should serve all equally.”

John Vasconcellos

He added that smaller organizations may need to consider more collaboration, consolidation, and strategic mergers, while Geeta Pradhan, president of the Cambridge Community Foundation in Cambridge, believes many small- and mid-sized nonprofits will fold, and the loss of small organizations will mean an inability to reach many who are most in need.

Geeta Pradhan

Kristin O'Malley, executive director of the Cape Cod Foundation, based in South Yarmouth, noted, “Organizations on the frontlines are continuing to respond to increased needs and demands with diminished resources. While there is a light at the end of the tunnel with the vaccine, we know that the needs will continue to increase before they dissipate, and recovery will be long.”

Kristin O'Malley

She added, “We have heard many of our nonprofit leaders say that they are ‘okay’ for 2020 but are very troubled by what 2021 will bring. We are starting to see some smaller, grassroots organizations considering closing their doors because the costs to continue operating greatly outweigh the benefits and the income.”

Barbara Fields, president and CEO of the Greater Worcester Community Foundation, based in Worcester, expressed concern about the long-term sustainability of the nonprofit sector, noting that some nonprofits will face “significant hurdles” next year as they change their service delivery model to do more with smaller staffs, while looking to raise more unrestricted funding for operations.

Barbara Fields

Smaller nonprofits will face all the issues that the sector as a whole will confront in 2021, with the added strains imposed by generally fewer resources.

O'Malley said many smaller organizations “do not have the cash reserves they need to continue to sustain themselves through this time and to then focus on economic recovery.”

Winkler suggested that staff retention will be an issue for smaller organizations, as increased uncertainty around viability may lead staff to seek employment with larger more financially stable organizations. In addition, she said, more senior level staff may look to move, especially if they saw their salaries and/or benefits reduced during 2020 to address budget gaps.

Pradhan said that while survival is the greatest challenge for smaller nonprofits, “our smallest nonprofits are also the most resilient. They are volunteer driven and often don’t have a huge infrastructure that they have to support. I think they have the amazing ability to weather tough times and contract or expand given bad and good times.”

She said she is most worried about mid-sized safety net organizations, since they have invested heavily in their own growth: “They have huge carrying costs like rents, staff, equipment that once disassembled will take years to build, and no reserves.”

Many nonprofits, which embraced technology to a greater extent this year than ever before, most notably to operate virtually, may need to give technology a greater operational role going forward, Vasconcellos said. O’Malley echoed that view, but noted that many Cape nonprofits say having the right technology and staff to manage it is a significant challenge.

Fuller recovery, particularly for arts and culture nonprofits, will come when the general public feels comfortable getting out and about. Said Fields: “The longer it will take to beat the COVID-19 pandemic, as the public is encouraged to stay home, the harder it will be for those organizations to recover.”

Added Pradhan, “We need to stop thinking about arts as a topping and recognize its potential for connecting, healing, helping communities in trauma by bringing in joy, stirring social commentary, educating, reflecting the human condition, and lifting the human spirit.”

Confronting Racism Is on the Table for Massachusetts Nonprofits

Several leaders noted a strong, almost imperative, need for Massachusetts nonprofits to confront issues of racism.

Klocke identified racial justice and equity as a major issue for nonprofits in 2021: “The protests that followed the killing of George Floyd shone a long-needed light on the racial inequities in our society. The pandemic amplified the inequities, as did the recession. Nonprofits across the sector are working to address those inequities in a myriad of ways.”

“How we keep the challenges of eliminating racism front and center in all of our work is a major issue. The injury and loss that we all suffer as a result of systemic racism keeps us from truly realizing our potential – from neighborhood to nation,” said Vasconcellos.

Fields said, “I believe that the pandemic has exposed the racial inequities in ways that put the issues front and center. Now is the time to confront long-standing issues in more structural and sustainable ways.”

A Robust Outlook for Philanthropic Support of Nonprofits

The nonprofit leaders expressed optimism about the 2021 fundraising environment, which may reflect a change in the way philanthropic supporters view their grantees. For example:

  • “This past year has seen an incredible amount of philanthropic collaboration with larger private foundations and state government partnering with community foundations in order to take advantage of the unique position community foundations occupy, as knowing the local needs and where targeted investments can be most effective. Going forward, we should expect to see much more of this type of collaboration,” Vasconcellos observed.

  • “Funders like us are listening and responding to how we can make it easier for nonprofits to survive and even thrive. Here at the Greater Worcester Community Foundation, we are looking to help more donors put their philanthropic dollars to work in strategic and meaningful ways that reflect their interests,” said Fields.

  • "Donors are understanding the need for organizations to have flexible, unrestricted resources to use to meet their rapidly evolving needs,” O’Malley said.

  • “Major donors are likely to maintain or increase their giving level as needs in the community continue and as they see their favorite nonprofits struggling. For organizations that can articulate the role they have played in addressing those needs, there are donors out there willing to help,” said Winkler, “but at the end of the day, fundraising in 2021 will be, like 2020, unpredictable.”

  • “The fundraising environment looks good for frontline social service, anti-poverty, education and workforce organizations, not so great for arts, environmental organizations, and civic engagement,” according to Pradhan.

A strong stock market this year bolstered assets for many grant makers, but 2021 giving will depend on many factors, including an improved economy, said Klocke.

Many foundations have committed to raising their giving in 2021, including the Barr Foundation in Boston, one of the largest grantmakers in the state, which recently announced it will increase grantmaking by 25% next year over 2020 levels.

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