Nonprofits are Surviving but Have Tough Decisions Ahead
Last week, we released our comprehensive survey results about COVID-19’s effects on the economic health of the nonprofit sector. We had nearly 300 respondents from across the state, and I wanted to share a few highlights and key findings from this survey.
First and foremost, nonprofits have seized upon federal funding available from PPP loans from the Small Business Administration. A full 70% received the loans to keep staff on payroll. The result of this is that 92 percent of nonprofits did not lay off any staff. Additionally, nonprofits were generally in strong financial and governance positions pre-COVID-19 (more than 40 percent reported having endowments, investments and/or 90-days of cash-on-hand). Their boards have also performed well, even in a crisis with 85 percent of organizations reporting that boards were either good or excellent in their performance.
However, nonprofits have a tough road ahead. Many lost significant amounts of donations over the past five months, with some losing more than $50,000 or more from canceled special events particularly. Dependence on proceeds from those events could be an Achilles heel for nonprofits during the next several months as people are hesitant to gather indoors in groups.
The Oklahoma Center for Nonprofits is recommending that nonprofits focus on their cash positions for the next several months and up to two years. Cash and liquidity will be king for organizations. Many are looking into budget adjustments through the end of the calendar year, predicting deficits and a need to dip into reserves or even investments to stay in operation and continue missions.
And while we focus on sustainability, there is uncertainty in our workforce. Nonprofits generally do everything they can to preserve that workforce, but some will be facing challenges, especially if the cash is not available to sustain staff sizes. Boards and leadership will have to work in partnership to have crucial conversations about viability and sustainability into the future.
The Oklahoma Center for Nonprofits will be there to help guide that decision-making process. Our team of consultants is already setting up various projects with organizations to address these issues. Our philanthropists – both foundation and corporate – are also having those conversations directly with nonprofits. We hope that we will emerge from this storm as unscathed as possible, but we realize through data and stories that nonprofits will need the support of all Oklahomans to continue meeting their missions.