The State of Quad Cities Nonprofits: Nine Months into the Pandemic
Last summer, I conducted a survey that examined the state of Quad City nonprofits after a quarter of a year living under the pandemic followed by another survey at the six month mark. I felt that the end of 2020 provided another good milestone to take the pulse of local nonprofits and, as we come upon the one-year anniversary of living in this new normal, a good opportunity to see how far we have come as a sector and what work remains.
(Data geek alert! Lots of numbers ahead. If you do not like lots of data, skip to the end for the conclusions … although you will find the data fascinating!)
One hundred and forty-three nonprofits completed the survey during the second half of January, an increase over previous surveys (with thanks to all of you who shared it or took it). Of these, 78% came from the Quad Cities with the balance (minus one) from Iowa or Illinois but outside of the Quad Cities, more non-Quad Cities organizations compared to the last survey.
Slightly more than 40% of survey respondents came from the human services sector with 18% from arts and culture, 16% from education, 13% from health, 8% from community and economic development, and 4% from religious organizations. This representation pretty much mirrors that seen nationally and in the previous surveys, with a slight increase in the percentage of human service organizations who participated.
So, what did the survey reveal about the current state of local nonprofits?
Nearly three-quarters of nonprofits still operate at or above pre-pandemic capacity, consistent with the findings in the fall. That’s great news! More human service and health organizations retained or grew services; only half of arts and culture organization did, an improvement from fall. Perhaps they adjusted services as gathering restrictions lifted. Only 28% significantly cut services or stopped operating, a 4% increase over the fall.
On the other side of the spectrum, fewer than 30% of nonprofits became busier; more than half of these have struggled to meet their increased demand. Most of the organizations who became busier came from the health care sector; in fall, more human service agencies saw increased demand than the other sectors. That shift may reflect the increase in infection rates and vaccinations in the fourth quarter of 2020 that have disproportionately impacted health care organizations.
Just over half of organizations raised less money than during this time last year, down from two-thirds a quarter ago. Sixteen percent raised more money. More health care organizations raised less than any other sector while a similar percentage of organizations in these other sectors raised less.
Sixty percent did not reach their 2020 fundraising goal; a quarter ago, only 50% thought they might fall short of goal. More than one-third raised significantly less than goal or pretty much no money since March. The survey did not ask if they had adjusted their goal because of the pandemic. Educational institutions and human services organizations more likely met their goal than other types of organizations. The receipt of CARES Act funding did not impact their ability to meet their fundraising goal or raise money.
More than half of nonprofits have lost revenue beyond fundraising from earned income, other non-philanthropic sources, partnerships, contracts, or endowment earnings. 22% either increased their non-philanthropic income or remained constant. These findings represent an improvement over last quarter. Religious and arts and cultural organizations more likely lost non-fundraising revenue compared to others with a full 72% of arts and cultural organizations losing earned income in 2020.
Half of nonprofits have cut their budgets – the same as last quarter; another 11% anticipate cutting it in the next 3-6 months, a decrease, perhaps because of additional pandemic relief measures that passed at the end of the year. Human service organizations least likely cut their budgets while education and arts and culture organizations more likely did. More arts and cultural organizations anticipate future budget cuts than other organizations. Interestingly, the receipt of CARES Act funding did not impact whether an organization cut their budget or anticipates future budget cuts.
More than half cut travel budgets, followed by 44% who cut programs and 39% who cut staff, a decrease from fall when nearly 60% of organizations had cut staff or anticipated cutting staff. Great news as apparently, nonprofits have found ways to retain staff.
70% of respondents received CARES Act funding that totaled a whopping $34 million. Organizations that did not receive CARES Act funding more likely cut services than those that did, pointing to the critical role that these funds served in preserving nonprofit services.
Only 38% of organizations anticipate applying for government assistance from the second round of relief. Half of the organizations that applied for CARES Act funding plan to apply for this second round, compared to only 7% of those who did not apply in Round 1. Arts and cultural organizations more than any other anticipate applying for second round funding. Most of those who do not plan to apply for round 2 relief either did not know that nonprofits qualified, do not need assistance, do not know what they would apply for, or do not qualify.
The pandemic has taken a significant toll on nonprofit staff. Nearly 69% worry about their personal health and safety, down from 80% in the fall; more than 55% have challenges meeting personal responsibilities brought on by the pandemic, down from 70% in the fall. 59% had increased workloads because of the pandemic, a number that increased significantly since fall.
80% of respondents feel prepared to handle the pandemic’s stresses on their staff, down from 90% in the fall. About half of these feel only moderately prepared to deal with staff stress. People in health care organizations felt much better prepared to help staff manage pandemic stress that those in any other type of organization.
Because we cannot know if the same organizations answered all three surveys, drawing conclusions based on comparisons between surveys require caution. With that caveat in mind, a few trends emerge that warrant consideration.
While attention has focused on the very real losses that arts and cultural organizations have suffered from social distancing and other gathering restrictions, locally their creativity has allowed many of them to offer programming at about the same level as in previous years. Congratulations to you all! Creativity certainly defined success in 2020 and will continue to in 2021. However, they will continue to need financial assistance to recover raised and earned income losses that they suffered.
Government support has helped local nonprofits – a lot! However, their ability and knowledge to continue to benefit from the next round(s) of pandemic relief remains uncertain. Nonprofits would certainly benefit from some targeted educational programs about pandemic relief programs. Nonprofit executives also need to actively seek education and knowledge of these programs, including signing up for news alerts and newsletters that many organizations have pushed out about these opportunities.
Nonprofits continue to raise money with nearly half raising as much or more than last year. Early national data points to more money given in 2020 compared to 2019 with donors planning to give even more in 2021. You have heard me say this before: ASK! Donors have money to give and know the need better than ever before, but you have to ask to get.
Nonprofits rely on staff, and staff have borne the brunt of the impact of the pandemic, with increased workloads, layoffs, budget cuts, furloughs, and overall stress. The health of the sector requires investments in our staff, both financially and mentally. Most directors say they feel only moderately well equipped to help staff mentally; providing resources for directors to help staff manage the pandemic would go a long way.
Things seem to have improved for local nonprofits over the course of the last 9 months. Fewer organizations have cut services; more raised more money than anticipated even three months ago. Organizations have adapted and shifted services effectively. While the pandemic will end, the definition of normal will change. Organizations that survive will need to adjust and adapt. The last 9 months have certainly demonstrated the need and ability to make these changes.
