CRISIS FUNDING
FPLG COVID-19 RESPONSE
CRISIS FUNDING
[UPDATE: November 14, 2020]
Despite the clear financial crunch faced by most nonprofits around the nation, there has been no additional federal help since late last spring, due to partisan obstructionism. It remains unclear whether there will be any significant help – or any help at all – during the lame duck period. Foundations have been easing up on their procedures and making larger payouts, but the massive amounts of funding needed cannot be made up from philanthropy alone.
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[UPDATE: May 25, 2020]
In response to the unprecedented emergency, government is stepping up with innovative loan and aid programs, but these efforts have been plagued with under-funding, bureaucratic hiccups, and administrative policies that fail to direct enough money to smaller businesses and nonprofits.
Donors at all giving levels are responding generously despite downturns in their own financial circumstances, but nonprofits are still experiencing budget shortfalls; overall, though, there will be a substantial decline in contributions. Rapid-response funds around the nation are generating substantial public support, but are not making up for revenue losses.
Foundations are taking the cue to revise some of their long-standing policies including increasing their current level of grantmaking and easing their restrictions and compliance requirements on grants.
Nonprofits are adapting to social-distancing rules and making the difficult switch, for the near term, to virtual fundraisers, but these substitutes aren’t expected to generate as much money as the traditional, in-person, fundraisers.
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[April 1, 2020]
The crisis facing our entire society has thrust the nonprofit sector into a dual role all too familiar from emergencies past: We are fighting for our survival while at the same time stepping up to provide needed benefits and services to our communities.
In these uncharted waters, nonprofit organizations are looking to sources of financial assistance both established (government contracts, foundation grants, and individual donors) as well as new (rapid-response funds and special government loans and benefits).
With tens of millions of additional people turning to and relying on charitable nonprofits for services since the novel coronavirus exploded in the United States, all nonprofit stakeholders – nonprofit board and staff members, government policymakers, philanthropists, business leaders, and the general public – need to call time out to consider how charitable nonprofits are faring in these daunting times. When doing so, you will see bright warning lights flashing and hear loud warning claxons sounding the alarm.
— Tim Delaney, NCN (11/10/20)
In the coming weeks and months, successful requests for charitable donations will need to be embedded in a larger expression of mutual support, empathy, and solidarity. And this approach should not be temporary: As the country deals with ever-greater personal loss and stress, charitable organizations can no longer do business as usual. The line between supporters and the supported will grow ever hazier. All of us will need help, and all of us will need to do our best to provide help to others.
— Alan Cantor (4/15/20)
The coronavirus pandemic has upended the finances of nonprofits around the world. Organizations have called off or postponed fundraising events. Donors at all giving levels are feeling the impact of the economy screeching to a halt and the plummeting stock market. Foundations have seen their endowments slashed by investment losses.
— Jim Rendon, (3/30/20)
REFERENCES & RESOURCES
- Warning Signs About the Fragility of Nonprofits in the Pandemic Era (November 12, 2020) Tim Delaney, National Council of Nonprofits
- How Donor Behavior Has Changed in 2020 (and What It Means for Year-End) (November 4, 2020) Laura Rhodes, CFRE, CGW,
- Four Considerations To Help Nonprofits Increase Revenue In 2021 (November 3, 2020) Shavonn Richardson, MBA, Forbes
- Charitable giving increased 7.5 percent in first half of 2020 (October 8, 2020) Lori Hunter Overmyer, Esq., Philanthropy News Digest
- The Frontlines of Nonprofit Distress Get Clearer (October 28, 2020) Martin Levine, The Nonprofit Quarterly
- The Big Reset: Guidance for Nonprofits (September 2020) Mario Morino, leapofreason.org
- Private foundations plan to increase grantmaking (September 30, 2020) Susan Friedlander Calzone, Philanthropy News Digest
- 3 Strategies to Successfully Fundraise Mid-Pandemic (August 3, 2020) Claire Axelrad, J.D.,C.F.R.E., Bloomerang Blog
- Financial Aid Expected for Struggling Nonprofits: The HEROES Act and Accessing PPP Loans (May 18, 2020) William Powers, Esq., & Anna Tang, Esq., Nossaman LLP
- Most Nonprofits Negatively Impacted by COVID-19, Survey Finds (May 14, 2020) Candid, Philanthropy News Digest
- Nonprofits Won’t Survive Unless the Federal Government Helps More Medium-Size Groups (May 11, 2020) Susan N. Dreyfus & John MacIntosh, The Chronicle of Philanthropy
- Philanthropy during COVID should focus on effective, local giving (May 5, 2020) Martin Morse Wooster, Philanthropy Daily
- Nonprofit Fundraising in the Age of Coronavirus (April 15, 2020) Alan Cantor,Harvard Business Review
- Struggles on the Ground: Nonprofits Face COVID-19 in Unclear Circumstances (April 1, 2020) Martin Levine and Ruth McCambridge, The Nonprofit Quarterly
- Leaders Argue That Nonprofits Need Government Aid (March 31, 2020) Dan Parks, The Chronicle of Philanthropy
- Financing During a Pandemic: How to Adapt to a Crisis (March 30, 2020) Jim Rendon, The Chronicle of Philanthropy
- Coronavirus and Nonprofits: Challenges & Resources (March 13, 2020) Linda J. Rosenthal, J.D., FPLG Blog
Remote-Work Costs: Must Nonprofit Reimburse?
[June 5, 2020] Among the many adjustments that employers - including nonprofits - have had to make during the COVID-19 pandemic is the abrupt switch to remote work for some or all of their employees. That includes making sure that everyone in the workforce has needed hardware, software, and internet and phone connectivity. California is among the jurisdictions that initiated early and mandatory stay-at-home orders for a large portion of the population and economy. There [...]
Filing Deadlines Extended for Nonprofit Organizations
[April 24, 2020] By the third week of March 2020, governments at all levels had begun to respond to the many questions and issues raised by the COVID-19 emergency, including - most notably - the curtailment or suspension of operations and activities by individuals and entities on account of new stay-at-home orders and recommendations. The necessary federal emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Act was made in mid-March. The [...]
UPDATE: The CARES Act and Nonprofits
[March 27, 2020] The third prong of the Congressional response to the COVID-19 pandemic - the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (S. 747) - is now before the House of Representatives, having passed the Senate on Wednesday. The House is expected to approve it today with overwhelming support; voting is expected to begin shortly. It could be signed at the White House and in effect before the end of this weekend. [...]
Some Good News: Funders are Stepping Up
Ten days ago, we posted Funders Must Step Up - Right Now! (March 16, 2020). That same morning, influential blogger Vu Le had posted Funders, this is the rainy day you have been saving up for. Mr. Le has long been a vocal critic of many foundations’ viewing the five percent payout figure in the tax code as a ceiling instead of what it is: a floor. During that week, as most of us were [...]
Nonprofit Board Meetings in an Emergency
The devastating pandemic has brought sudden and profound challenges for all of us. In What Nonprofit Board Members Should Be Doing Right Now to Address the COVID-19 Situation, (March 16, 2020), the experts from BoardSource write: “As the world responds to the threats of COVID-19, many nonprofits and their boards are wrestling with difficult questions and decisions.” A rewrite of that sentence may be in order; every nonprofit and its board is flying blind in [...]
The Charitable Sector: COVID-19 Relief and Economic Stimulus Package
America's charities request $60 billion infusion of support to help the most vulnerable March 18, 2020 The COVID-19 (Coronavirus) pandemic facing the country is having a profound impact on the economy and has greatly expanded the need for charitable organizations to provide additional services in an unprecedented manner. At the same time, the economic downturn will undoubtedly result in a contraction in contributions and other sources of revenue which are the lifeblood of many charitable [...]
Coronavirus and Nonprofits: Challenges & Resources
What a difference a week makes. Last week, the news media focused on the minutiae of the primary-election horse race. This week, Americans have been forced to confront the coronavirus (COVID-19) pandemic. For the nonprofit sector, the emergency becomes a double-barreled crisis: we are both victims and saviors. This is not an unfamiliar conundrum; there are frequent natural disasters that devastate one area or another. This nation’s charitable organizations - and, in particular, the social [...]
Funders Must Step Up – Right Now!
“Funders,” writes nonprofit blogger Vu Le, “this is the rainy day you have been saving up for.” Recently, we wrote about Mr. Le’s earlier plea for America’s foundations to step up their payouts beyond the “five percent rule” in the federal tax code. In an article last summer, he characterized it as a moral imperative: The ethical argument for foundations to increase their annual payout rate beyond 5% (August 4, 2019). This morning, it’s a [...]
Small Business Association Disaster Loan Guidance and Resources
The U.S. Small Business Administration (SBA) has an existing program, the Economic Injury Disaster Loan program, that extends disaster relief loans to small businesses, including nonprofits, to help alleviate economic injury caused by disasters. On Thursday, March 12, 2020, the SBA announced that the program will be available to claims arising from COVID-19. The SBA will work with state officials to offer loans of up to $2 million. “These loans may be used to pay [...]