By Kory Eng and Stephen Adams
The COVID-19 crisis is ever so slightly relaxing its grip on our lives. But as we begin to breathe a little easier, it is clear the pandemic is leaving in its wake a potentially more lasting and dangerous crisis — the hollowing out of our nonprofit sector. Only decisive and sustained action to shore up our nonprofits will avert a sharp decline in the quality of life across North Central Massachusetts.
We are privileged to lead two of the region’s funder organizations. It has been remarkable to see people and institutions come together to fight the pandemic and its community-crushing effects. We have gained a deep appreciation for how important nonprofits are to sustaining the lives of our region’s vulnerable residents. In these few short months, our two organizations have partnered with over 50 nonprofit agencies to fight food and financial insecurity, bring vital mental health services to individuals in need and combat the insidious isolation the virus has forced on our seniors.
At the same time, dozens more organizations have been stalled or sidelined by the pandemic. Our historical societies, arts and music centers, youth organizations and childcare centers are staggering under the dual challenge of the loss of revenue from the economic lockdown and the costs of reopening in the lingering COVID environment. Together, these organizations hold the fabric of our communities and region together, and they are in trouble.
Congress, acknowledging the critical role non-profit organizations serve in our community as well as their significant contributions to the overall economy, included nonprofits in the $670 billion Paycheck Protection Program run by the Small Business Administration. But many have been shut out of the financial aid by a complicated application process and concerns that they may not meet the criteria for loan forgiveness.
An enormous amount of philanthropy has gone to addressing immediate COVID-related needs, and necessarily so. Still, across North Central Massachusetts, and across America critical organizations have had to cut or eliminate services due to a sharp decline in grants and donations, the cancellation of fundraising events and loss in fee-based revenue. A recent survey of local nonprofit organizations found that close to 60% reported significant funding losses as a result of the COVID-19 pandemic, with 55% reporting the need to reduce services as a result of these losses.
This strain has created considerable concern among our area’s non-profit leaders about their ability to meet the needs of the people and communities they serve in light of an eroding resource environment and continuing need for support. As we look ahead to 2021, it is very likely that there will be fewer dollars available to meet the needs of vulnerable people and to sustain our quality of life in our region and across the nation.
A recent analysis by Candid estimates that between 11% and 38% of nonprofits across the US will fail in the next 36 months. Without aggressive action to support our nonprofit sector, we risk the erosion of a critical safety net upon which thousands of local residents rely, and the deterioration of the quality of life for all who live in North Central Massachusetts.
Given the unprecedented depth and breadth of the COVID-19 pandemic, Congress continues to debate the need for recovery financing. However, whether, when and how much support we can expect from Washington remain open questions. In the meantime, it is important that we solidify our efforts to build a COVID-19 recovery strategy.
Addressing the post-COVID challenge will require an enormous degree of collaboration between civic and municipal groups across North Central Region. Together we should begin to (1) develop a sense of the scale of the financial challenge confronting the region’s nonprofit organizations; (2) establish an approach to setting priorities for directing resources; and (3) scope out potential sources of financial support to meet the challenge.
The people and institutions of North Central Massachusetts have already demonstrated a strong desire to see the region through this difficult time. Donations of time and treasure and unprecedented levels of collaboration and ingenuity have helped dampen the worst effects of the pandemic on vulnerable neighbors.
Despite our COVID fatigue, it is time to turn our attention to preserving the vulnerable nonprofit organizations that help enrich the quality of life in North Central Massachusetts.
Kory Eng is the President and CEO of the United Way of North Central Massachusetts.
Stephen Adams is the President and CEO of the Community Foundation of North Central Massachusetts.