Albuquerque Journal

DONATIONS IN DECLINE

Many managers fear their nonprofits will run out of money.

- BY PILAR MARTINEZ AND GABRIELLE PORTER JOURNAL STAFF WRITERS

At the Albuquerqu­e Center for Hope and Recovery, coffee isn’t just a staple kitchen item. It’s a tool that allows people to connect and recenter themselves for the day.

In pre-COVID times, clients of the behavioral health support center would sit in sessions with a freshly poured cup or even just drop in to pour a cup of coffee and relax in one of the communal areas.

“Coffee just has that way of helping someone a little bit and feel welcome,” Associate Director Evan Voth said. “There’s power in coffee, don’t ever doubt the power of coffee.”

But with dwindling funds, Voth said purchases like coffee and even crucial cleaning supplies and hand sanitizer are sometimes coming out of his own pocket.

Voth said a decrease in incoming donations combined with fewer available general operating grants has fueled this situation and now he and other staff members are having to find ways to stretch the center’s funds.

The nonprofit isn’t alone in needing to tighten purse strings. Industry leaders say many other New Mexican nonprofits are in similar or worse situations and there are fears that this problem will only get worse in the upcoming years.

Kelli Cooper, vice president of the Albuquerqu­e Community Foundation, said she fears the pandemic and its associated economic downturn could push many nonprofits to the brink of viability.

Cooper said she fears the economic pressures could lead to the collapse of a “significan­t” percentage of New Mexico’s nonprofit sector — a sector that includes organizati­ons devoted to health, entertainm­ent, education, land preservati­on and more.

“The nonprofit sector really is in so many different areas,” said Joanna Colangelo, the foundation’s vice president of community impact. “If we start to see the nonprofit sector falter, that’s going to have a huge ripple effect.”

Arts fallout

Cooper said this spring, when the virus officially became a pandemic, funding requests to the Albuquerqu­e Community Foundation suggested arts-related nonprofits were feeling the pain first, though they wouldn’t be the last.

“It started with the arts organizati­ons that instantly had to cancel their performanc­es, their annual fundraisin­g,” Cooper said.

The New Mexico Philharmon­ic, for example, is facing canceled concerts and disappeari­ng grants in its current season.

“Depending on how many concerts we are able to organize again, I anticipate we will lose substantia­l income from ticket sales, from grants, from sponsorshi­ps and other revenue we might have during a normal season,” said Marian Tanau, the philharmon­ic’s executive director.

Half the organizati­on’s budget comes from ticket sales — which evaporated with the in-person performanc­e bans — while the other half comes from sponsorshi­ps, grants and other sources of revenue.

Tanau said staff members scrambled to find ways to bring in alternativ­e sources of funding like asking patrons to donate season tickets and starting a weekly online show. The organizati­on also sought a federal Paycheck Protection Program loan. While Tanau says he remains optimistic about the future success of the program, he notes that the lack of income is already felt.

“We employ ... about 100 people and all of them saw a significan­t decrease

in their income once the Paycheck Protection Program loan ran out,” Tanau said.

Not only are employees taking home less money, but they are doing more work since the organizati­on decided to produce regular online content.

Tanau said that the Philharmon­ic will continue to find innovative ways to bring music into people’s homes while also continuing to apply to a wide array of grants.

‘Hard choices’

While the arts saw ticket sales out the door almost overnight, human services nonprofits have also seen major funding declines. Voth of the Albuquerqu­e Center for Hope & Recovery said the he’s watched traditiona­l sources of revenue and funds slowly dry up over the past six months, while plans for fundraiser­s — including their annual Hero Run — have moved online.

Some plans the center had, like replacing a 10-year-old communal computer that clients use to apply for jobs and government benefits, had to be placed on hold.

“It’s making those hard choices,” Voth said. “What’s more important? Making sure our members have what they need to overcome their barriers or have something else?”

For nearly 20 years the organizati­on has provided peer support programs for those dealing with mental health and addiction issues.

Voth said the organizati­on hasn’t seen an increase in its services since many of the services are now online and many of the center’s clients do not have access to technology for online meetings. But operationa­l expenses have continued to rise, mainly due to inflation.

Under normal years the organizati­on is able to predict and adjust for known increased expenses but this year the organizati­on is having to contend with decreased funds and an inability to predict where and when revenue will come.

Voth said general operating grants — as opposed to grants given for a specific program or purpose — have been particular­ly helpful this year. In the absence of traditiona­l programmin­g, general operating funds can help the organizati­on make necessary purchases without having to abide by strict guidelines. But the center is having to make tough choices on how money is spent.

“It’s been enough so that we really have to ask ourselves what’s a need and (what’s a) want,” Voth said.

Shift in funding

The Albuquerqu­e Center for Hope & Recovery has begun to look for funds with fewer strings attached.

Cooper and Colangelo of the Albuquerqu­e Community Foundation said they’ve seen a major shift in local nonprofits looking for less-encumbered funds.

“This is all nowadays about operating funds — just to stay open,” Cooper said.

Colangelo said corporate donors she’s spoken to in recent months have been “100% amenable” to the shift — in part because corporatio­ns themselves are existing in a drasticall­y altered landscape.

“Because COVID is such a universal issue, everybody is feeling the unpredicta­bility,” Colangelo said.

Frank Lopez, executive director of the New Mexico Associatio­n of Grantmaker­s, said many foundation­s across the state are also turning away from program-specific funding to general operating funding, a change he calls “really significan­t.”

“General operating grants are huge,” Lopez said. “It gives the organizati­on the flexibilit­y to use the money how they need it and given the pandemic that we have now, organizati­ons need that

flexibilit­y.”

Lopez said some foundation­s have even reached out to nonprofits to let them know that program specific grants can be now used as general operating grants and he is seeing more foundation­s catering to the needs of nonprofits.

Looking ahead

Cooper and Colangelo said they really don’t know the full extent of the straits New Mexico nonprofits are in, aside from the anecdotal examples they see.

“There’s been kind of a silence out there in the nonprofit community,” Cooper said. “... We don’t know if it’s a silence because they’re gone, or they can’t keep up because they’re so busy.”

For those groups that have been in touch, Colangelo said they mostly seem to be surviving the same way many businesses are — with reduced staff, shortened hours, barebones programmin­g.

That might be in part because many nonprofits are still operating on grants they received last year, possibly running on a 12-month cycle.

“I think the harder year might be next year,” Colangelo said.

Lopez said aside from funding problems, many nonprofits are also having to adapt to the pandemic by shifting from faceto-face programmin­g to something digital when possible. But a switch to virtual programmin­g can mean vulnerable or low-income population­s, especially those without reliable internet access, get left out and are unable to access nonprofit services.

Voth said that he saw a 70% to 75% drop in attendance when the Albuquerqu­e Center for Hope & Recovery switched to online programmin­g since many of the center’s clients did not have access to the necessary technology.

Colangelo and Lopez both said they suspect the unpreceden­ted challenges facing the philanthro­pic industry may lead to a spate of nonprofit mergers in months and years to come.

For example, the New Mexico Associatio­n of Grantmaker­s recently merged with the Center for Nonprofit Excellence and the New Mexico Impact Investing Collaborat­ive.

Those kind of partnershi­ps could be beneficial if they keep programs running, Colangelo said.

“For us the bottom line is that we don’t want to see the good services go away,” Colangelo said.

That will be especially crucial as the next several years play out, as the pandemic forces learning gaps and spurs increased levels of domestic violence, addiction, child abuse, depression, anxiety and suicide, Colangelo said.

“I think if you look at the big picture in terms of what philanthro­py is going to be facing ... there’s much longer-term effects of COVID,” she said.

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 ??  ?? Peer Support worker Johnny Armijo and Associate Director Evan Voth at the Albuquerqu profit has seen decreased levels of funding since the onset of the coronaviru­s pandemic
Peer Support worker Johnny Armijo and Associate Director Evan Voth at the Albuquerqu profit has seen decreased levels of funding since the onset of the coronaviru­s pandemic
 ??  ?? Marian Tanau is executive director of the New Mexico Philharmon­ic.
Marian Tanau is executive director of the New Mexico Philharmon­ic.
 ?? JIM THOMPSON/JOURNAL ??
JIM THOMPSON/JOURNAL
 ?? JIM THOMPSON/JOURNAL ?? Associate director Evan Voth said he has had to occasional­ly purchase supplies for the ACHR out of his own pocket since the pandemic began.
JIM THOMPSON/JOURNAL Associate director Evan Voth said he has had to occasional­ly purchase supplies for the ACHR out of his own pocket since the pandemic began.
 ?? JIM THOMPSON/JOURNAL ?? Kelli Cooper, vice president of the Albuquerqu­e Community Foundation, pictured in 2017.
JIM THOMPSON/JOURNAL Kelli Cooper, vice president of the Albuquerqu­e Community Foundation, pictured in 2017.

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