COVID-Induced Revenue Loss Still Afflicts Mass. Nonprofits
April 23, 2021 — In the wake of the coronavirus pandemic, Massachusetts nonprofits across the board continue to experience revenue losses, and many lack sufficient staff to address increased service demands, according to a recently completed survey of the sector.
Ninety percent of 275 survey respondents reported experiencing “medium to high severity of ongoing impacts to their programs, services, and operations” due to the pandemic.
Describing the 2021 fundraising environment as ”murky,” especially as many nonprofit fundraising events were scaled back last year and have not yet been restored, Jim Klocke, CEO of MNN, said revenue streams will, on average, stabilize.
“The biggest driver will be the economy,” he said. “It's improving but we're not out of the woods yet.”
Key survey findings include the following:
More than 60% of respondents reported revenue loss over the past year, with average revenues down 34% over the previous year.
Over 50% of respondents said they currently have six months or less in cash on hand.
The arts and culture sub-sector had the highest percentage of respondents experiencing declining revenue streams (65%).
The most frequently reported form of financial relief was a federal Paycheck Protection Program—or PPP—loan (over 70% received a PPP loan), with philanthropic support the second most frequently reported support stream (55%).
Staffing capacity remains the greatest unmet organizational need, the survey found, followed by insufficient capacity to operate programs remotely and lack of resources to meet increased service demands.
The health and human services sub-sectors, which reported the highest severity of ongoing impacts to programs due to the pandemic, may be getting financial relief from philanthropic supporters, which, according to Jeffrey Poulos, CEO of Philanthropy Massachusetts, are looking at ways to support communities by investing in organizations addressing mental health.
Overall, funders can best support nonprofits by providing unrestricted, multi-year operating support, and “lean more into trust-based philanthropy,” Poulos said.
He noted, “This enables a nonprofit greater flexibility to use the funds where they are most needed such as hiring back for lost positions, engaging independent contractors, investing in professional development, and other approaches that strengthen their capacity. Multi-year funding positions a nonprofit to better plan for staffing solutions more long-term.”
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