The pandemic caused a “dramatic shift” in the Wisconsin nonprofit sector, a study led by the UW-Milwaukee Helen Bader Institute for Nonprofit Management highlights. Nearly half of the organizations surveyed reduced their programming due to COVID-19, at a time when the community’s needs are at an all-time high and resources are severely lacking.
Half of the polled nonprofits reduced their paid staff, and 80% of them reduced their volunteer workforce, most of them doing so “to a great extent.” As things stand, nearly 40% of Wisconsin’s nonprofits are providing services at reduced capacity. More than half of Milwaukee-based nonprofits slashed their services or stopped operations entirely.
“The large majority of organizations cut back their workforce right out of the gates, because of the safer-at-home orders,” says Bryce Lord, associate director of the Helen Bader Institute. “It couldn’t be helped: Many volunteers tend to be older, so they weren't comfortable going out into public or to group environments anymore. That is a pretty significant drop for a lot of smaller organizations that can't necessarily afford paid staff and rely on volunteers. As a result, 12% of the organizations that responded had to stop operations immediately and weren't able to move forward.”
Unprecedented Financial Hurdles
Fundraising and other revenue-generating activities had to largely stop to avoid infections, severely endangering the funding of many organizations across the nation. Virtually all nonprofits organizations also report declining donations—which is understandable as the country's economy is sinking in the worst recession in living memory and unemployment reached 13.3%. Smaller organizations have been hit harder, as they lack the network of big donors and the manpower needed to reach out to them. Among respondents, 19% believe it is unlikely they will be able to fund payroll in the coming weeks, and 51% might be unable to pay rent in the immediate future.
Another source of worry is the disruption of government revenue flows. “During the Reagan era, when the government started moving away from providing social services, they started effectively hiring nonprofits to provide the services for them and providing grant funding for them based on the number of people served,” Bryce Lord explains. “Due to the pandemic, some of the payout for those government grants has slowed down and been disrupted. There is concern about whether or not that funding, which is normally fairly steady, will be paid out as usual, or if it will be diverted to other places.”
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More than half of the state’s nonprofits have applied to the Paycheck Protection Program and emergency grants; the Helen Bader Institute will keep surveying the situation into 2021 to determine how many actually received the support they applied for.
Not All Nonprofits Hit Equally
In Wisconsin, arts-related nonprofits have been hit much harder than others: “79% of Arts, 49% of Education, and 46% of Environment organizations report operating at reduced capacity,” the study reveals.
“60% of the arts organizations that were polled felt that they were probably going to have to close their doors by the end of June. Without any sort of significant change, they would have to stop providing any and all services,” Bryce Lord reports. Human contact is the first victim of the quarantine even among nonprofits. “Think about the kind of work they do. It relies on an audience, which requires people connecting in a group situation in a closed environment. With COVID-19, they effectively had to shut shut down those operations.”
Nearly half of respondents were providing fewer services to marginalized people, and approximately 80% admitted they were concerned about their ability to address the needs of the most vulnerable people they service—the homeless, senior citizens, undocumented populations and people with physical or mental disabilities in particular.
The greatest challenge for nonprofits is to keep servicing populations that need them in the short-term. “Nonprofits are called upon to provide services in situations like exactly like this. This whole situation has really put a spotlight on how important they are,” Bryce Lord says. “In the past several decades, the social services provided by the government decreased more and more, and the nonprofit sector has been there to effectively pick up the pieces and provide those services in turn. I don't see that trend changing at all. In fact, I see that the need for the nonprofit sector increasing exponentially. Nonprofits are needed. I think, overall, in a few years, they will more or less bounce back to normal.” The true danger is for the populations that rely on them until then.
