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New Realities, New Data: Nonprofits in Crisis and What Donors Need to Know

Date: June 9, 2020

Kate Gehling

Former Senior Analyst, Research, CEP

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The nation and world face unprecedented challenges right now. The COVID-19 pandemic has devastated individuals and organizations alike. Research (from Nonprofit Finance Fund and La Piana Consulting, for example) shows that the pandemic is having harsh negative impacts on the social sector, with nonprofits facing increased demand, decreased revenue, and difficult decisions about their programming and staffing. Centuries of institutional racism have led communities of color that already lacked access to healthcare and secure jobs to be hardest hit by the pandemic. And racial disparities have been further highlighted by the most recent murders of Black men and women at the hands of the police — murders that follow the United States’ long history of police brutality and anti-Black violence.

The severity of these issues underscores the need for strong nonprofits, many of which are at the forefront of efforts to support individuals and communities, and to build momentum and advocate for change.

At CEP, we know that funders’ actions can profoundly impact nonprofit organizations and the people and communities they serve. But to know how to be as supportive as possible, it’s essential that funders understand what nonprofits are going through right now — and hear about these realities straight from the source.

That’s why, in Funder Support During the COVID-19 Pandemic, a new report from CEP out today, we share data from nonprofit leaders about how the COVID-19 pandemic is impacting nonprofit organizations and those they serve, how foundations and individual donors are providing support in this moment, and what nonprofits say they need most from their funders moving forward.

To investigate these topics, last month we surveyed the nonprofit leaders on CEP’s Grantee Voice panel, a national sample of CEOs from nonprofit, grant-seeking organizations that receive at least one grant from foundations giving $5 million or more annually. Leaders on the panel represent a wide range of organizations of many different sizes, geographic locations, and issue areas. 172 of the 595 CEOs on the panel responded to the survey, for a response rate of 29 percent.

Here’s what we found:

  1. While COVID-19 has had devastating impacts on nonprofits, the negative impacts have been magnified for nonprofits that provide direct services and serve historically disadvantaged communities.
  2. During this time, nonprofits that rely on foundation funding are experiencing fewer negative impacts and more stable funding than those relying more so on earned revenue or gifts from individual donors.
  3. While staffed foundation funders and major donors have been helpful during the pandemic, major donors are significantly less likely to have talked with nonprofits that are led by women about how they will support them in the future.

The data in the report indicates that funders can better support their grantees going forward by providing more funding (if they are able to), providing unrestricted support, and reaching out to provide transparency about how the pandemic will impact their future support.

Nonprofits are vital to overcoming the many immense challenges we currently face, whether it’s a deadly global pandemic or police continuing to kill Black Americans with impunity. It’s more important than ever that foundation funders and individual donors support nonprofits in ways that best position them to make an impact. But nonprofits, especially those serving the most disadvantaged and vulnerable in our society, are facing stark realities right now. Funders must push themselves to better support these organizations in order to tackle the most important problems of our time.

Download Funder Support During the COVID-19 Pandemic here.

Kate Gehling is an analyst, research, at CEP. 

Editor’s Note: CEP publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of CEP.

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