Amid the challenges facing your clients and communities, there is another crisis that is keeping social sector professionals awake at night – funding uncertainty and the long-term financial outlook for nonprofits across the sector.
You don’t need us to tell you how challenging the last several months have been for human services organizations. Between the sweeping effects of the COVID-19 crisis, which has brought pain and disruption across the areas of public health, unemployment and more; to the agony of racial injustice that has sparked countless protests across the world; the people you serve need nonprofits like never before. But, amid the challenges facing your clients and communities, there is another crisis that is keeping social sector professionals awake at night – funding uncertainty and the long-term financial outlook for nonprofits across the sector.
Now, it won’t come as a surprise that as a data-centric company, we at Social Solutions have been perusing various research reports, studies and resources to build a deeper understanding of the uncertainty – particularly around funding – facing the nonprofit sector.
Uncertainty by the Numbers
For instance, on June 10, 2020, CAF America released the third volume of its ‘The Voice of Charities Facing COVID-19 Worldwide’ report, which paints a depressing picture for nonprofits. As a key finding of the report, CAF America states, “Two-thirds of responding organizations find that they are running out of time. Of organizations that share this outlook, one-third expect to close down within the next 12 months if the situation remains unchanged.”
With this commentary underlining the pervasiveness of uncertainty, CAF America has also revealed the following findings:
- 90% of respondents say that their organizations continue to be negatively impacted by the COVID-19 crisis
- 72% of respondents say they were unable to meet their fundraising targets
- 52% of respondents say the type of funding they need most right now is unrestricted funding
- 70% of respondents say funding is needed most urgently to cover salaries
- Nearly one-third of respondents say funding is needed most urgently to invest in nonprofit technology
Another report from the Center for Effective Philanthropy (CEP) found similar pains facing nonprofits. In its June 2020 report ‘Funder Support During the COVID-19 Pandemic,’ CEP found that 84% of nonprofits are experiencing moderate to significant negative impacts as a result of COVID-19.
Illuminating the level of uncertainty from a firsthand perspective, one survey respondent shared, “[We are] desperately trying to find funds to keep the nonprofit afloat and our staff employed. With so many revenue streams compromised, we are looking for ways to cut costs left and right and expect to end the fiscal year in the red for the first time in nine years.”
CEP also found that as a result of the pandemic:
- 81% have had to or plan to reduce programs or services
- 80% of nonprofit respondents have already drawn or plan to draw from funding reserves
- Nearly two-thirds have had to or plan to reduce staff hours, wages or employee benefits
Uncertainty Up Close and Personal
In addition to reviewing data and research, we have been in close contact with our clients across the social sector and have heard firsthand about the challenges you’re facing and the uncertainty you’re feeling. Through the conversations we’ve been having over the last several months, we’ve heard time and again that nonprofits are searching for some certainty amid the chaos.
One way that we’ve sought to provide some certainty right now is by building – and updating – our COVID-19 Resource Hub so that you can quickly and easily find the latest information and insights related to funding opportunities and pandemic-related developments.
And, we may be a data-centric company but at our core, we are a people-centric company and we know the social sector thrives on connection. This is why we also took our work to compile and validate COVID-19 resources and then presented a webinar for the nonprofit sector to make the data relatable and actionable for all.
We know that organizations like yours are struggling, and we know the people you support still need your programs and services – perhaps now more than ever. While everything feels interrupted, from operations to funding expectations and more, we also know this: your mission, the reason you are working tirelessly to get creative and persevere, remains uninterrupted.
At Social Solutions, we’re committed to continuing to support social sector organizations to navigate uncertainty. If you have a question, a story to share or want to learn how you can get up and running quickly with nonprofit software, we are here for you.