As revenues of America’s nonprofits plummet because of COVID-19, demand for services soar. Congress needs to help.

Printer-friendly version

As Congress and the White House discuss supporting specific American industries, which one is in the greatest danger? We’ll give you a hint: It collectively employs 12.3 million Americans, which is more than transportation, more than construction, and even more than manufacturing. And, unlike other industries, it is confronted by a combination of contradictory forces unlike any other industry: exponentially increasing demand and devastating decreases in revenues. What industry is that? The nonprofit industry. Specifically, the charitable nonprofit sector.

Charitable nonprofits serve on our society’s frontlines in good times and bad. We’re there every day, inspiring minds, comforting those in need, nurturing souls, and training workforces. In times of crisis — be that fires, floods, hurricanes, or COVID19 — the demand for our services goes up, and community resilience hinges on the strength and stability of our sector.

Policymakers at all levels of government need to bring nonprofits to their policy tables devising solutions and put them on their financial ledgers. Charitable nonprofits will be essential, both now as relief and later for recovery. But they will not exist for people in local communities throughout the country without immediate and longer-term resources to keep their doors open to meet ever-increasing needs.

Nonprofits already have had to cancel fundraising events, shut down conferences that often earn more than half their revenues, and terminate other revenue-producing performances and activities. Many nonprofits operate on volume-based grants and contracts, for which they have sunk costs, but now cannot provide the services or trainings. Yet while their revenues plummet, demands for their services are beginning to soar.

So many people already depend on nonprofits as a lifeline, from individuals who are hungry to survivors of domestic violence. And demands will only grow due to COVID-19. Data show that more than half of nonprofits didn’t have the resources to meet demand for their services even before this crisis. Half of nonprofits have three or fewer months of cash on hand. Now we’re looking at skyrocketing demands — which then impose increased costs to meet the need, which in turn requires increased resources. It is utterly untenable for already under-resourced nonprofits to be the safety net to catch people without greater financial support.

In El Paso, Texas, the local government turned to trusted community partner YWCA to provide child care for the city and meet the emergency child care needs of healthcare workers. The YWCA El Paso is not only staying open, but offering extended hours for parents who are doctors and nurses, so they can continue to care for the sick. They are literally undergirding El Paso’s response, but without additional revenue, they may not be able to keep their centers open and staffed, which would leave nurses, doctors, police officers, health department workers, and so many other essential community workers without child care for their children.

There are stories like this across the nonprofit sector, and in the weeks and months ahead, our communities will rely on nonprofits more than ever to help more people in more challenging circumstances.

That’s why federal, state, and local policymakers must include nonprofits as full partners in the relief and recovery efforts. Here are some time-tested solutions:

First, when governments establish emergency funds, they must get resources out to nonprofits immediately, so those organizations indispensable to any meaningful relief and recovery efforts remain open and ready to act. The human and financial costs of allowing them to fold are simply too high.

Next, when fashioning legislation to assist for-profit entities, that assistance should be equally available to nonprofits. Purported solutions in the past, such as income tax credits, offer no support to nonprofits that pay payroll and other taxes, but not income taxes.

Third, create tax incentives for all Americans to support their local nonprofits through tax-deductible charitable contributions available for each taxpayer, even those who do not itemize their deductions. Everyone should have an incentive to support their community, not just those who make so much money they don’t use the standard deduction.

Finally, nonprofits are closest to the problems society faces, meaning they are closest to the solutions. So, when government leaders assemble advisors to develop informed responses, include charitable nonprofits as part of the core group around the decision-making table. After all, problem solving is what we do.

America’s 12.3 million nonprofit employees have their sleeves rolled up, ready to do whatever is necessary for the people in their local communities. We just need our doors to remain open and resources flowing to meet the mounting needs.


Alejandra Y. Castillo is CEO of YWCA USA and Tim Delaney is President & CEO of the National Council of Nonprofits

Categories: 
Find Your State Association of Nonprofits

Find Your State Association of Nonprofits

Connect with local resources and expertise

Find

Connect With Us

1. Sign up for updates

Stay up-to-date with the latest nonprofit resources and trends by subscribing to our free e-newsletters.

2. Follow us on social media