Nearly half of nonprofits surveyed reported they were forced to cut employment as charitable giving declines and demands for services increase
(WASHINGTON, June 15, 2020) – Independent Sector released survey results today that reveal the startling effects of the COVID-19 pandemic and economic shutdown on mid-size nonprofit organizations across the country. In this survey, mid-size nonprofits refer to organizations that employ between 500 and 5,000 people. Collectively, the respondents represent more than 152,000 employees and nearly $9.1 billion in revenue and contributions, as calculated prior to COVID-19 and the economic shutdown.
The results reinforce the urgent need for additional assistance for mid-sized nonprofits in upcoming negotiations on the next round of COVID-relief legislation. Specifically, these nonprofits must be made eligible for the Main Street Lending program with consideration of the unique nature of nonprofits. Congress must change the statute for the Treasury to allow loan forgiveness for nonprofits with 500 employees or more, modeled after the terms offered to smaller charities.
“Since the beginning of COVID-19 and the CARES Act negotiations, we’ve been calling on Congress to provide better support for mid-size nonprofits in our country,” said Dan Cardinali, president and CEO of Independent Sector. “These results make it abundantly clear that the sector is facing great pressure and it is time for Congress to step up to provide immediate relief. Nonprofit organizations address critical needs, including food insecurity, housing, childcare, and other resources that our society needs to function. These nonprofits are made up of front-line workers who serve the most vulnerable, especially communities of color disproportionately affected by the pandemic. Continuing to disqualify mid-size nonprofits for this assistance puts those nonprofits at grave operational risk and threatens our collective ability to get communities the help they most need in this crisis.”
Notably, 83% of organizations reported a decline in revenue stemming from the loss of revenue typically made at conferences, events or other activities, a reduction in individual giving, and a reduction in grants received. These significant losses have hit organizations’ ability to fulfill their missions – 71% reporting a reduction in services or available operations – and maintain their workforces. Forty-seven percent of organizations reported a decline in employment with most either laying off or furloughing employees.
The survey provides clear evidence the pandemic and economic shutdown have hurt nonprofits. Congress can help restore lost revenue and contributions, and resulting lost jobs, by raising the above the line tax deduction for all individuals giving to charity. Congress can also expand loan programs for nonprofits with favorable terms like loan forgiveness.
Independent Sector urges Congress to act quickly to ensure nonprofits – especially those in the mid-size category that have been largely excluded from relief efforts to-date – can continue to provide critical services as our country faces an incredible time of need.
The survey, conducted in partnership with Washington Council Ernst & Young, was distributed to mid-sized nonprofits May 27 through June 9, 2020. Learn more about the survey at independentsector.org/resource/covid19-survey.
Independent Sector is the only national membership organization that brings together a diverse community of changemakers, nonprofits, foundations, and corporations working to ensure all people in the United States thrive. Learn more at independentsector.org.
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