‘An epic moment but not in a good way’: How COVID is causing pain at five of the nation’s largest nonprofits

‘An epic moment but not in a good way’: How COVID is causing pain at five of the nation’s largest nonprofits

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Billions in government aid have poured into keeping small businesses afloat, relegating nonprofits to an afterthought, said National Council of Nonprofits CEO Tim Delaney.

The Dallas-based American Heart Association got left out of both CARES Act relief loan programs because of its size and because it receives a large amount of its revenue through donations. Others who secured a relief loan to keep their staff on payroll ended up laying off workers when the funds ran out.

The nonprofit sector is the third-largest workforce of any U.S. industry, employing 100,000 more workers than the nation’s manufacturers, according to the 2020 Nonprofit Employment Report from Johns Hopkins University.

“Policymakers ignore us and don’t include us at the policy table,” Delaney said. “So we’re constantly grabbing our own chairs and pulling them up.”

Texas is particularly vulnerable to strain on nonprofits, which account for 1 in 8 jobs in the state, according to a recent statewide survey from United Ways of Texas and OneStar Foundation. The state is home to some of the nation’s largest nonprofits, including Komen, the heart association and Irving-based Mothers Against Drunk Driving.

Sixty-two percent of Texas nonprofits are in higher demand now, yet 70% of their budgets are being squeezed by the economic strain of the virus, according to the study. More than 80% have called off or plan to cancel revenue-generating events.

Now, some may shutter their doors for good.

“Everyone sees the handwriting on the wall,” Delaney said. “They know difficult decisions need to be made. But imagine spending the last five, 10, 15 years of your life advancing a mission and then you’re asked to shut it down. That’s where a lot of them are.”

That’s mostly true for smaller nonprofits, which make up the majority of the nearly 107,000 nonprofits in Texas. Ninety-two percent of nonprofits operate on revenue of less than $1 million a year, according to the National Council of Nonprofits.

With unemployment at record levels, many previous donors are waiting to see how the virus progresses and if they can provide for their families before donating. Others are giving money specifically to COVID-related causes, especially food banks.

“It’s been traumatic to nonprofits,” Delaney said. “They’re being stretched beyond any sense of reality.”

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Dallas Morning News
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