COVID-19 impact endangers Miami-Dade nonprofits
A new FIU report finds that Miami-Dade’s growing nonprofit sector offers vital services, cultural programs and a $23 billion boost to the local economy, but revenue losses from COVID-19 imperil its future.
Miami-Dade’s vitally important nonprofit groups and institutions, which provide services and programs that range from food, day care and mental-health care to opera and ballet, are reeling from the effects of the COVID-19 pandemic, a pair of new reports show.
The two surveys of nonprofits, one by the county’s cultural affairs department and the other by Florida International University, show a large portion of arts groups and organizations that provide a broad range of services and programming to the community have furloughed or laid off employees amid cratering revenue.
The crunch is especially critical for human-service organizations coping with sharply increased demand for assistance with basic needs like food and mental health, according to the FIU survey conducted by the school’s Jorge M. Pérez Metropolitan Center.
Sixty-five percent of the nonprofits surveyed have also revamped services to provide assistance and programs virtually. The coronavirus crisis has hit the county’s subsidized daycare centers especially hard, with many closing at least temporarily as parents withdrew their children.
More than half of the 374 nonprofits surveyed by FIU reported drops in revenue. Nearly 40 percent have had to add services or retool operations in response to the pandemic, with expanded food distribution, mental-health assistance and help paying utilities leading the way, FIU found. Nearly a quarter reported ceasing operations, though the survey does not specify whether the closures are permanent.
Most of the groups also expect severe, longterm drops in donations and revenue that threaten their future, the report shows. That shortfall points to a need for a broad community strategy and “a call to donors” to raise funds to ensure their continued operation, said
the study’s principal researcher, Maria Ilcheva.
“The nonprofits are suffering,” she said. “We must recognize not only the need but the good work they do, and find ways to augment their resources so they can continue doing that work.”
At Big Brothers Big Sisters of Miami, the nonprofit group known for matching disadvantaged kids with one-on-one mentors, the approach of the new fiscal year July 1 means an operating budget around 20 percent lower than last year’s $6 million in the face of lowered fundraising expectations, CEO Gale Nelson said in an interview.
That sharp cut comes as the agency continues to run a new food-distribution program at its headquarters that began as the pandemic tossed many of its member families out of work and forced Big Brothers to go fully virtual — a pivot that Nelson expects will last at least through the balance of 2020.
On June 23, the food program, which Nelson said has depended on donations from restaurants and other providers as well as cash gifts from supporters, served 400 families. At the same time, the organization has continued matching up kids and adult mentors, albeit electronically, while it stripped down expenses and operations where it could, such as letting vacancies go unfilled, to save money while maintaining its mission, he said.
“Our heads are above water and we will continue our core services to our families,” Nelson said. “They need us more now than ever. We are optimistic, but we will use wisdom every step of the way. We want to really ask all Miamians to continue to support us.”
Miami-Dade’s latest survey of cultural and arts groups, the third in a monthly series since the start of the pandemic and related shutdowns, also found mounting losses from closed facilities and canceled performances and fundraisers. The total financial loss as of the end of May amounts to nearly $43 million with 5,377 arts and cultural jobs lost permanently or temporarily, out of a pre-pandemic workforce estimated at 44,000. Cultural groups were also hit with added expenses to cope with COVID-19 totaling nearly $4 million, the report says.
Many groups were ineligible to apply for federal relief, but cultural organizations did receive $14 million in payroll protection payments, temporarily easing the impact of the pandemic, but not enough to compensate for losses, county cultural affairs director Michael Spring wrote in the report.
“These tremendous losses are clear indicators of the serious, relentless effect that the pandemic is having on the very survival of our cultural life,” Spring wrote.
At Locust Projects, a small but lauded arts group based in a gallery on the edge of the Miami Design District, director Lorie Mertes estimates lost donations at $135,000, a painful drop given its total budget is below $1 million. But although the venue has been shut since March, Locust has continued its core program — distributing grants to local artists underwritten by large funders like the Andy Warhol Foundation and the National Endowment for the Arts, which Mertes said have so far not cut back.
While Locust received payroll protection aid in the second round and is for now holding stable, she said, it’s not the same story for its community of artists, many of whom struggled to make ends meet even before the pandemic. Many have lost side jobs they depended on, and one became ill with COVID-19, Mertes said.
The funders allowed Locust to advance and repurpose grants meant for commissioning art projects from individual artists, so the group distributed $60,000 in emergency aid to 40 local artists during the pandemic. Twelve artists who got $6,000 grants from a second fund were allowed to use half the money for emergency relief, Mertes said.
Now, as Locust gets ready for a planned Wednesday, July 8, reopening under extensive restrictions, she’s concerned about navigating through at least several months more of uncertainty as the pandemic surges again. Mertes doesn’t know if its critically important fall fundraiser will happen, or if its donors and institutional supporters will also be forced to cut back.
“We’re reconfiguring things and setting lower goals. But we still have costs,” Mertes said. “We’re still facing the unknown. The reverberations of this will be shown in the months to come.”
A broad initiative to help sustain the county’s nonprofits may in fact be in the offing under the coordination of the Greater Miami Chamber of Commerce. Its committee on business nonprofits and Philanthropy Miami helped spearhead the commissioning of the survey and a broader report by FIU on the county’s nonprofit sector, and will act on the findings.
“We need to collaborate to build up, and in some cases rebuild, the nonprofit community in Miami-Dade County,” said Patrick G. Morris, a chamber committee member and community affairs officer for South Florida at Wells Fargo Bank, which helped fund the studies.
“It’s a wait and see. They all know they do not have the kind of operating funds that are so critical. Not all of them are going to make it, just as not all businesses are going to make it. So collectively we’re going to have to come together and figure out a way forward. There is more to be done.”
The FIU Metropolitan Center survey was conducted as the unexpected bookend to its new study of Miami-Dade’s large but under-recognized nonprofit sector. The county’s nonprofits not only fill critical gaps in human services, but have also helped fuel the metro’s fast rise as a cultural and arts capital.
The FIU report, the first comprehensive look at the county’s nonprofit sector in 14 years, found that it had grown substantially before the pandemic to become an integral part of the local economy. The 9,331 registered nonprofts in MiamiDade account for an economic impact estimated at $23.7 billion and employ nearly 115,000 people — or almost 10 percent of the local workforce, the report concludes. The organizations also draw a nearly equal number of volunteers, it found.
Those nonprofits range from small neighborhood groups with fewer than 10 employees to a pair of behemoths — the Baptist Hospital network and the University of Miami and its large healthcare operation. The two institutions together account for $4.4 billion in revenue for the local nonprofit sector, the report says.
The largest segment of nonprofits focuses on provision of human services, such as assistance of various kinds to farm workers, immigrants and refugees and other low-income residents with housing and homelessness, job training, education, finances, legal representation and advocacy. The nonprofits also encompass foundations that provide grants and funding to local groups, as well as groups working on civil rights and environmental causes.
The charitable sub-segment, encompassing groups that depend on donations, has a relatively long tradition in the relatively young city. The oldest local agency is the Florida Audubon Society, founded in 1900.
Those service nonprofits have become a key source of support for many residents of Miami-Dade, where unusually large swaths of the population struggle to pay for housing and other essentials, the report says. The document notes a high poverty rate of nearly 19 percent as of 2017, prevailing low wages and high housing costs combine to put severe cost burdens on almost half of all households in MiamiDade.
Until the pandemic, the nonprofit sector had been growing in terms of revenue generated for operations, from just under $10 billion in 2010 to $13.6 billion in 2018. Still, the report concludes that, given the needs, the groups are generally “overworked, overextended” — and absolutely essential.
“Miami-Dade County would not be the caring community it is, and could not truly function without them,” the report says.
FIU was just wrapping up the report when the pandemic began wreaking havoc on local businesses and nonprofits. Given rapidly changing conditions, the survey of COVID-19’s impact on nonprofits was quickly conducted in May as a supplement to the broader report.
After the pandemic forced cancellation of an unveiling of the study that was to be held at the Arsht Center for the Performing Arts, which has been closed since March, the report and the survey results were released during a Zoom conference with over 400 participants, the chamber’s Morris said.
In addition to Wells Fargo, the other funders comprised Philanthropy Miami, the Miami Foundation, United Way of Miami-Dade, The Children’s Trust, S.IMPACT and the Center for Social Change.
The COVID-19 pandemic has underscored both the importance of nonprofits to the Miami-Dade community, and also their economic vulnerability, FIU’s Ilcheva said. Given the county’s economic disparities, its large share of immigrants and its affordable housing crisis, it relies more heavily than other metros on the nonprofit sector, she noted. In Miami-Dade, nonprofits not only provide crucial services and support, but help “elevate standards of living,” she said.
“We do depend on nonprofits more,” she said. “The reason is twofold. Over the last couple of decades there has been a withdrawal of government from the social services realm. And the second part is the greater need in our community compared to other areas.”