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January 18, 2021
 
Relief for Nonprofit Sector, but Full Job Recovery Is Years Away

December 22, 2020 — While the COVID-19 relief bill passed by Congress yesterday, when enacted into law, will provide short-term aid for nonprofits, jobs lost across the nonprofit sector due to the coronavirus pandemic will take 2.4 years to reach pre-pandemic employment levels, a recently completed analysis concludes.

COVID-19 Relief Bill Brings More Aid to Nonprofits

The COVID-19 relief bill approved by Congress on Monday will help nonprofits, according to the National Council of Nonprofits, by:

  • Extending the Universal Charitable Deduction through 2021, which allows all taxpayers to deduct up to $300 for charitable contributions from their federal taxable income, whether or not they itemize deductions or take the standard deduction. It also establishes a $600 deduction for couples filing jointly in 2021.

  • Extending the 50% coverage of unemployment costs for reimbursing employers until mid-March.

  • Allowing charitable nonprofits, as well as for-profit businesses, to qualify for a second loan through the Paycheck Protection Program (PPP) of up to $2 million if they employ 300 or fewer employees and experience a decline in gross receipts of 25% in one of the four quarters in 2020, compared to the same quarter in 2019.

  • Providing $15 billion to aid performance venues, independent movie theaters, and cultural institutions, as well as for nonprofits that provide child care.

“Charitable nonprofits have already lost almost a million jobs since March, and thousands of nonprofits across the country have shut down permanently – unable to provide needed services anymore,” said Tim Delaney, council president and CEO. “Without further relief, tens of thousands more nonprofit workers will go from helping others to needing help themselves.

“More organizations will shut down entirely, just as the public’s need for their services peaks this winter,”

Full Nonprofit Sector Job Recovery Will Take 2.4 Years

If the rate of nonprofit job growth evident in November persists, it would take the nonprofit sector 2.4 year to dig its way out of the 877,802 job losses that remained as of November, according to a recently completed analysis from the Center for Civil Society Studies at Johns Hopkins University.

The analysis found that nonprofits across the country posted 877,802 fewer jobs last month than it fielded in 2017.

Jobs recovered by the sector in November represented a recovery rate of just 1.9% of the estimated 1.64 million initial job losses from the first three months of the pandemic, i.e., March, April, and May.

However, given recent surges in new COVID-19 infections and deaths, growing restrictions being instituted around the country in an attempt to stem the tide, and the likelihood that vaccinations will not be available to the majority of the population until at least the second quarter of 2021, it seems likely that the recent slowing of nonprofit job recovery will persist, or perhaps even intensify in the coming months, the center noted.

These factors will “put added strain on institutions that are especially critical to managing this crisis,” the center warned.

No breakout of job recovery was provided for the Massachusetts nonprofit sector, and, to date, no entity in the state has developed an estimate of Bay State nonprofit job losses stemming from the pandemic.

Different sub-sectors of the national nonprofit sector will recover at different rates, and may give a clue about the sector’s recovery in Massachusetts.

The analysis said the timeline for jobs to reach pre-pandemic levels will be as follows:

  • Religious, grantmaking, civic, professional, and similar organizations: 2.7 years
  • Educational services: 2.0 years
  • Social assistance: 2.0 years
  • Arts, entertainment, and recreation: 1.4 years
  • Health care: 0.9 years

Fundraising Down Across the Nonprofit Sector

A challenging fundraising environment is likely to compound job recovery efforts across the nonprofit sector.

According to a recent DonorPerfect Fundraising Benchmarks Report from SofterWare, Inc., in Fort Washington, Pa., revenue at nonprofits where less than $235,000 is raised was down 22% this year, and down 18% at nonprofits where funds raised is between $235,000 and $775,000 annually, The NonProfit Times (NPT) reported.

Revenue at organizations where $775,000 and more is raised was down 11%.

The smallest nonprofits “really have been clobbered during the pandemic,” NPT reported.

The report showed that the focus of donors has shifted to nonprofits whose missions align with providing relief related to COVID-19.

Arts and culture nonprofits saw fundraising decline an average 29%, followed by education, down an average of 23%; 12% at environmental and animal nonprofits; 10% at human service organizations; 9% at faith-based nonprofits; 6% at public and social benefit nonprofits, and 23% at more general organizations.

The analysis was based on input from 7,506 nonprofits across the country.

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