As we discussed in our previous article “The Pandemic and Non-profits” the pandemic has had a substantial effect on the operation and sustenance of nonprofits. A June, 2020 article in the Stanford Social Innovation Review, which summarizes a national survey of 750 members of primarily US based nonprofits, reported that nearly 75% of survey respondents stated their organizations had experienced a drop in revenues, and over 80% had moved all or some of their programs and services to an online format. (See “The Continuing Impact of COVID-19 on the Social Sector”) Eighty percent of surveyed nonprofits are shifting to work from home, many are expecting or already have made reductions in staff, and many are considering mergers with other non-profits.
A recent article in the NonProfit Times (February 1, 2021) indicates that non-profits continue to anticipate staff reductions and alterations in programming. “The 2020 Eagle Hill Consulting Nonprofit Survey, conducted by Ispos, included 505 respondents from a random sample of nonprofit employees across the United States.” The results of the survey include:
In recent months, nonprofits have implemented:
- Program reductions, 30%
- Hiring freezes, 30%
- Furloughs, 25%
- Salary reductions, 24%
- Layoffs, 20%
Employees predict that many of the same moves will continue into 2021 to varying degrees:
Program reductions, 32%
- Hiring freezes, 32%
- Salary reductions, 23%
- Layoffs, 20%
- Furloughs, 17%
The author of the survey, Melissa Jezior, notes: “The good news is that most nonprofit leaders are not hesitating to make changes in response to a multitude of unprecedented challenges…Change is never easy for employees and it’s even more complicated when employees are operating with fewer resources, higher demands and they’re fearful about their job security,” she said. “For nonprofits to continue to deliver on their mission during these uncertain times, it will be critical for leaders to make employee engagement a top priority. Employees are the driving force behind the resilience and innovation that is required for nonprofits to not only survive this turmoil but emerge stronger once we’re through these rough waters,” Jezior said.
The New York Times reported in July, 2020 that “Covid-19 has driven the United States economy into a sudden and deep recession, hitting local businesses as well as multibillion-dollar corporations. Less noticed has been the immense toll on the nonprofit groups that Americans rely on for social services, medical care, and spiritual needs. Tens of thousands of nonprofits are likely to close without some kind of rescue package, the research group Candid concluded from an analysis of tax filings. That would not only be a blow to those who rely on their services but also do further damage to the economy. The sector is the nation’s third-largest private employer, with 1.3 million nonprofits employing roughly 12.5 million people, about 10 percent of the total who are working in the private sector. A Johns Hopkins University study estimated that 1.6 million nonprofit jobs were lost between February and May.” (See “Providing a Pandemic Safety Net, Nonprofits Need Their Own,” Nicholas Kulish, New York Times, July 24, 2020)
The recent changes in Washington suggest that the Federal government is likely to take a more coordinated and rational approach to addressing the effects of the COVID-19 pandemic. Although it is too early to tell how the new policies in fighting the pandemic will affect the non-profit sector, we can only hope that some of the negative effects noted above will be diminished as the pandemic is effectively addressed. That said, the U.S. economy is likely to exercise a weakening effect on the nonprofit sector for the foreseeable future.
“Nonprofit Staff Expect More Layoffs, Hiring Freezes,” NonProfit Times
“Nonprofits Post Job Losses for December,” NonProfit Times
“Providing a Pandemic Safety Net, Nonprofits Need Their Own,” Nicholas Kulish, New York Times, July 24, 2020
State-specific on the economic effects of the Pandemic can be viewed here