COVID crisis leaves local nonprofits uncertain about future funding

Nonprofit Helping Mamas employee Sydney Leimbach pulls diapers for a request at their Norcross warehouse. Thousands of donated diapers came pouring into the 9,000-square-foot warehouse in Norcross, but unlike past years, there were no volunteers to sort the items. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION
Nonprofit Helping Mamas employee Sydney Leimbach pulls diapers for a request at their Norcross warehouse. Thousands of donated diapers came pouring into the 9,000-square-foot warehouse in Norcross, but unlike past years, there were no volunteers to sort the items. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION

In the early days of the COVID-19 pandemic, Greg Cole, executive director of Emmaus House, a nonprofit affiliated with the Episcopal Church, ran through different scenarios in his head.

When to reschedule the spring fundraiser? Would he have to trim the already lean staff? Could they even survive?

It turned out the organization, which provides rent, utility and food assistance to residents of Peoplestown and surrounding neighborhoods, was doing the right thing at the right moment. Donors looking to help those suffering from the impact of the pandemic were amazingly generous. “Even when the stock market was in free fall, people were donating,” Cole said.

>> READ MORE: AJC Complete Coronavirus Coverage

But as the city has reopened and the sense of urgency surrounding the pandemic has begun to recede, donations have slowed. “As we move closer to fall, we are going to have to do more direct asks and I’m trying to figure out what that looks like,” Cole said.

Since early March, metro area nonprofits have navigated uncharted territory as the pandemic fueled increased demand for certain social services. Guidelines for social distancing made it difficult to use on-site volunteers, and the fundraisers that generate revenue for operating expenses had to be canceled or turned into virtual events. A survey conducted by the Georgia Center for Nonprofits found that 90% of Georgia nonprofits said their revenues have been negatively impacted by the coronavirus pandemic.

With both a pandemic and the recent civil unrest, giving to nonprofits in human services like food banks and social justice organizations like Black Lives Matter has increased, but many nonprofits are suffering. Especially hard hit are organizations such as museums and arts groups whose operations are more dependent on earned income from ticket sales and memberships.

Even the largest nonprofits have not gone unscathed. Earlier this month, the American Cancer Society announced it would lay off 1,000 workers nationwide. Habitat for Humanity International, another Atlanta-based nonprofit, announced staffing cuts of 10% in April.

>> RELATED: American Cancer Society expects $200 million shortfall due to pandemic

>> READ MORE: Habitat for Humanity Intl. cuts 10% of staff amid pandemic fallout

Emergency funding from the federal CARES Act has helped bridge the gaps, but some nonprofits have had to dip into reserves or reduce services to continue operating. With inevitable declines in federal and state funding and the possibility of donor fatigue, many organizations are looking toward the coming fiscal year with uncertainty.

In 2019, charitable giving was the second highest year on record, according to the annual Giving USA report released in June. Almost $450 billion went to U.S. charities. Individual giving and corporate giving were the largest sources of funding, with education and arts among the areas that experienced double-digit growth.

With the onset of the pandemic, much of that support has likely moved to human services, said Una Osili, associate dean for research and international programs at the Lilly Family School of Philanthropy. When incidents of police brutality sparked international protests against racial inequality, social justice organizations were also targeted for funding, Osili said. “There is an open door right now for nonprofits to be part of that rebuilding and recovery at the local level,” she said.

An estimated 450 American Cancer Society employees, volunteers and supporters march through Centennial Olympic Park in downtown Atlanta after a rally to celebrate the organization’s 100th birthday in 2013. The nonprofit announced layoffs June 10, 2020. File photo. (PHIL SKINNER/AJC)
An estimated 450 American Cancer Society employees, volunteers and supporters march through Centennial Olympic Park in downtown Atlanta after a rally to celebrate the organization’s 100th birthday in 2013. The nonprofit announced layoffs June 10, 2020. File photo. (PHIL SKINNER/AJC)

Adapting on all fronts

Cole of Emmaus House said the organization immediately adapted its service model when the pandemic began. “It didn’t take long before I realized our biggest challenge was not how we were going to survive but how we were going to respond in meaningful ways,” he said.

The food pantry that once operated like a grocery store began providing a checklist to clients who waited outside as their orders were completed. The summer literacy program went virtual and now serves 40 students rather than over 100. Rent and utility assistance forms are also online. With a renewed focus on social justice, Cole is reviewing all services through the lens of equity to determine if additional adjustments should be made.

The need for funding is ongoing. “There is a lot of uncertainty,” Cole said. “It will be interesting to see how fundraising plays out over the year.”

In survey data released this month from hundreds of nonprofits across the state, 30% said they have less than six months of operating capital if current circumstances continue, said Karen Beavor, president and CEO of the Georgia Center for Nonprofits. The percentage is even higher for organizations in rural and minority communities, Beavor said. More than 75% of nonprofits are now delivering some form of their services — everything from academic programs to doctor visits — online, and almost 70% have shifted some part of their organization to COVID-19 relief.

Latino Community Fund says it is a catalyst for investment, collaborative work and positive narrative. It works within and with the Latinx/Hispanic Community in Georgia by supporting Latino-serving nonprofits. CONTRIBUTED
Latino Community Fund says it is a catalyst for investment, collaborative work and positive narrative. It works within and with the Latinx/Hispanic Community in Georgia by supporting Latino-serving nonprofits. CONTRIBUTED

When the Latino Community Fund launched its COVID-19 relief program in mid-March with priority given to food security and rent assistance, executive director Gigi Pedraza said the first question was where to get money.

“Everyone knew the United Way, but where else? Philanthropy has a pyramid structure: They give a little at the top and hope it will get to everyone else. We believe in flipping the pyramid and funding a number of organizations not because they have a five-year strategic plan but because they are the ones who understand the community,” she said. Working with five member partners across the state that pledged to stay open during the pandemic, LCF funneled 100% of all donations to community members who met three of five criteria, including being a limited English speaker or not qualifying for other forms of assistance, Pedraza said.

The demand for services was so great that Pedraza and other office staff evolved into front-line workers with their partners. “It has stretched our organization to the point where we are struggling like everyone else,” she said.

Helping Mamas, a nonprofit that provides baby supplies to moms in need, received funding from the United Way, community foundations and corporate donations during the pandemic. Employee Karissa Jackson pulls items to fill a request at their Norcross warehouse. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION
Helping Mamas, a nonprofit that provides baby supplies to moms in need, received funding from the United Way, community foundations and corporate donations during the pandemic. Employee Karissa Jackson pulls items to fill a request at their Norcross warehouse. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION

Some organizations met the increased demand for services by collaborating with other nonprofits. Within the first two weeks of the pandemic, Helping Mamas, a nonprofit that provides baby supplies to moms in need, had connected with 15 to 20 new nonprofit agencies, said CEO Jamie Lackey. With funding from the United Way, community foundations and corporate donations, thousands of diapers came pouring into the 9,000-square-foot warehouse in Norcross, but unlike past years, there were no volunteers to sort the items.

>> READ MORE: When moms can't afford diapers, who's there to help them?

The big fundraiser, from which they hoped to raise $50,000 this year, has been reimagined as an online carnival for families to engage in virtual competitions. “Planning is difficult, but there are opportunities too that may allow us to reach a broader population and help us reach more people,” Lackey said.

Gauging the impact

While 67% of nonprofits have experienced a 20% or greater increase in demand for one or more core services, another 41% report demand decreases of 50% or more in one or more programs. Some of those seeing a decrease are zoos, theaters and museums that rely on ticket sales for revenue and lost much of that income when they were forced to close due to the pandemic.

“Generally, if you are an agency that earns a lot of your revenue, you have been fairly significantly impacted,” Beavor said. “If you are losing almost a quarter of your revenue, that is a tremendous amount, and you are likely going to cut people and cut programs.”

Tellus Science Museum
Tellus Science Museum

Credit: Courtesy of Tellus Science Museum​

Credit: Courtesy of Tellus Science Museum​

In the three months from the March 13 shutdown to its June 13 reopening, Tellus Science Museum in Cartersville lost about $1 million in revenue, said executive director Jose Santamaria. One of the largest events — the annual RockFest mineral show, which draws thousands of visitors each year — would have taken place last week. Other summer programming has been canceled. Since reopening with guidelines in place — timed entry, one-way routes and staff in masks — visits have hovered at 260, just over half of the 500 daily visits that are normal for this time of year, Santamaria said.

>> PHOTO GALLERY: Tellus Science Museum opens minds in Cartersville

As a private nonprofit that does not receive federal, state or local funding, Tellus has relied on long-term relationships with major donors, corporate partners and other supporters among the 4,500 members who stepped up with major gifts and membership renewals to help during the pandemic and beyond, said director of development Adam Wade. As a result, despite the losses, the museum was able to retain all staff and does not anticipate programming cuts, Santamaria said.

“For the moment, we are not planning to change anything since there is so much we don’t know,” he said. “The crystal ball is very muddy right now.”

Bracing for what’s next

This moment feels like the calm before the storm, said Veronica Squires, chief administrative officer of Good Samaritan Health Center on Atlanta’s Westside. “When your revenue model depends on asking people for money, you never know for sure even with the best projections what is going to come in, but what makes this different is we know the assets in people’s accounts across the board are down,” Squires said.

Dr. William Warren is chief executive officer, founder and a pediatrician at Good Samaritan Health Center, which is not a federally qualified health center so it does not receive regular government funding. Money from the CARES Act’s Paycheck Protection Program and philanthropic donors helped keep the clinic stay open to serve clients. MIGUEL MARTINEZ FOR THE ATLANTA JOURNAL-CONSTITUTION
Dr. William Warren is chief executive officer, founder and a pediatrician at Good Samaritan Health Center, which is not a federally qualified health center so it does not receive regular government funding. Money from the CARES Act’s Paycheck Protection Program and philanthropic donors helped keep the clinic stay open to serve clients. MIGUEL MARTINEZ FOR THE ATLANTA JOURNAL-CONSTITUTION

The clinic, which provides a range of services including health and dental care, nutrition and cooking classes, a fitness center and a community farmers market, is not a federally qualified health center, so it does not receive government funding. Money from the CARES Act’s Paycheck Protection Program and philanthropic donors helped keep the clinic open as they transformed their service model.

“We have completely revamped the way we deliver health care,” Squires said.

>> RELATED: Farm at Good Samaritan Health Center offers food, community as medicine

Several providers exclusively see COVID-19 patients while patients with other urgent medical needs are seen by a different set of caregivers. Nurses triage incoming patients on entry, and the on-site COVID-19 rapid testing routinely serves its capacity of 150 tests per day. A health hotline draws about 1,000 calls per day, and telehealth services are available 24/7, she said. Cooking classes and workout sessions have moved online.

Free, on-site COVID-19 rapid testing at Good Samaritan Health Center in Atlanta regularly meets its capacity of 150 tests per day. CVS Health runs the facility in a partnership with the clinic, and test results are available in 15 minutes. MIGUEL MARTINEZ FOR THE ATLANTA JOURNAL-CONSTITUTION
Free, on-site COVID-19 rapid testing at Good Samaritan Health Center in Atlanta regularly meets its capacity of 150 tests per day. CVS Health runs the facility in a partnership with the clinic, and test results are available in 15 minutes. MIGUEL MARTINEZ FOR THE ATLANTA JOURNAL-CONSTITUTION

With most routine care visits postponed, Squires imagines there will be a huge pent-up demand for service in the future, in addition to a possible uptick in COVID-19 cases.

“There is a lack of clear, consistent messaging and data around a lot of these issues, and it is hard to make these decisions,” she said. “I think now is the time we need to be preparing to take it to another level in the fall.”

2021 FUNDRAISING FORECAST

Nonprofits around the state polled on how they feel about future fundraising gave moderately to significantly lower revenue forecasts:

34% expect lower revenue from foundations

54% expect lower revenue from corporations

48% expect lower revenue from individuals

Source: Georgia Center for Nonprofits

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