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COVID-19: The Health and Financial Crisis Threatening Nonprofits

By William Buster, M.A.,
Executive Vice President of Community Investments

Published April 28, 2020

The coronavirus pandemic is having a profound impact on our Central Texas region, our country and our world – the full extent of which we have yet to see. We continue to shelter in place and maintain social distancing, and each do our part, yet the weight on our society still unfolds before us. Many local businesses and organizations are faced daily with impossible decisions that impact their employees and by extension, the families they support. National workforces are adapting to new “work from home” realities to protect employees and their families. Meanwhile, organizations both large and small are completely reworking their supply chains due to market closures and evolving customer demands. It is truly unprecedented – not just from a health and wellness perspective but also from a financial perspective as the people and businesses within our community rethink day-to-day life.

The ripple effect of COVID-19 has become increasingly apparent in the nonprofit sector. Mission Capital – a Central Texas organization providing tools, guidance and resources to local nonprofits and businesses to help advance equity – recently surveyed more than 450 Central Texas nonprofits to understand the challenges facing their organizations. The findings are staggering, putting a finer point on challenges which were palpable from the start of the pandemic. As of March 2020, 33.6% of organizations estimate they can only operate between two to six months at their current capacity with an additional 14.9% indicating operational loses so great they will close their doors in one to two months.

These are organizations that provide vital services – meeting the needs of our community’s most vulnerable long before COVID-19 entered the picture. Many more of our neighbors are experiencing financial vulnerability, which is increasing the need of the vital services nonprofits provide. This comes at a time when nonprofits are facing serious financial realities themselves.  More than 49% noted significant increase in demand for services or support during the month of March, and another 35.8% noted an expansion in the types of needs or requests of their businesses.* These numbers have likely seen an even higher jump in recent weeks.

Much like our health care providers and essential workers, nonprofits are on the front lines of the COVID-19 response. These organizations continue to serve despite experiencing vast declines in operational capital. From cancelled fundraising events and reduced donations to significant declines in earned revenues and fees for services (reflecting 57% of Mission Capital respondents), nonprofit financial needs are growing rapidly. It is essential that philanthropy in our region collectively take a creative, nimble approach to strategy and grantmaking, meeting organizations where they are, and seeking innovative solutions where needs are most critical.

For those serving our aging and rural populations, many are struggling to deliver basic needs to those sheltering in place. Others are trying to determine how to best support affordable housing and other COVID-19-related expenses for individuals with fixed or low incomes. And more than ever, access to social, emotional, and mental health supports will be critical for our priority populations.

Volunteers at Meals on Wheels Central Texas shifted to preparing shelf-stable meals for their clients that can last several weeks after the City of Austin launched its “Stay at Home, Stay Safe” order.

Many women’s health organizations are overcoming challenges – both financial and operational – associated with transitions to telehealth platforms to ensure patients continue to be served. Not to mention, many must rework their business models to address staffing challenges given the shortage of volunteers in a socially distanced world.

As a regional funder throughout Central Texas’ five counties, we know this pandemic has no borders or county lines. Therefore, when we talk about solutions, innovation, and strategic community support, we must acknowledge this perspective and regional connection to our neighbors. What happens in Lockhart and Taylor impacts Austin and Georgetown, and vice versa.

Data has revealed that COVID-19 is disproportionately affecting African American and Latinx populations, shining the light on health inequities that are now exacerbated by the pandemic. In an April report from the CDC, data showed that 30% of hospitalized COVID-19 patients were African American, even though they make up roughly 13%of the population in the U.S. This troubling and devastating outcome reveals a dire need to understand the inequities which existed prior to COVID-19 so society can properly address and increase efforts to break down barriers related to the social determinants of health as a part of the pandemic response – and far beyond. This also reinforces the need to ensure awareness of and access to essential health services, which are even more critical during this health and financial crisis.

COVID-19 has created a long-term health and financial crisis – one that will require collaboration and innovation to meet the ever-evolving needs of Central Texans, and the world, for years to come. This is of paramount importance to us at St. David’s Foundation. We are committed to helping our community navigate short- and long-term needs, both those focused on health and well-being and those related to operational sustainability.

Whether that’s being flexible with our current funds to ensure operating needs are met, or acting swiftly and nimbly to set up other channels of support, the Foundation is working alongside our grantees and community partners to evolve our processes and make timely, relevant decisions to address the ever-evolving demands created by COVID-19 on the nonprofit community.

The St. David’s Foundation COVID-19 Recovery Fund was created to help meet the urgent needs of Central Texas nonprofits today, so they can continue contributing vital services tomorrow. The first phase of funding submissions is currently being accepted through May 7, 2020 with two additional phases to follow in coming months.

We are stronger together than we are alone, and St. David’s Foundation is committed to locking arms with partner organizations and communities in need across Central Texas to support relief and recovery during these unprecedented times. This will ultimately help us contribute to a healthier tomorrow.

Learn more about our response to COVID-19

Learn about our COVID-19 Recovery Fund: Lifting up Central Texas Today and Tomorrow

St. David’s Foundation’s List of COVID-19 Resources

Learn more about Mission Capital’s Nonprofit Pulse Survey