Report shows how virus hit nonprofits
One in three fear they’ll be broke within 8 weeks
GREEN BAY – Wisconsin nonprofits could be in dire financial straits in the months, and possibly years, ahead as they continue to cancel or scale back vital fundraising events due to the coronavirus pandemic.
One in five nonprofits that responded to a University of Wisconsin System survey said they worry about meeting payroll for the next eight weeks. Almost 50% have laid off staff already, and 93% said they’re considering future layoffs. More than 10% stopped providing services altogether.
Lora Warner of the UW-Green Bay Center for Public Affairs, who co-authored the northeast region report with associate professor Michael Ford of UW-Oshkosh, said the financial pinch has one in three nonprofits in northeastern Wisconsin concerned they could run out of money within the next eight weeks.
“It’s definitely a looming issue that will get bigger, just like everything else,” Warner said. “Their donations are definitely at risk. We don’t know where they will be in a few weeks. Two-thirds said they could continue programming for eight weeks, but that means one-third is not sure they could.”
More than 500 nonprofits were surveyed statewide. The resulting look at COVID-19’s effect on Wisconsin nonprofits was co-authored by 11 faculty members from the UW System and led by UW-Milwaukee’s Helen Bader Institute for Nonprofit Management with the Institute for Nonprofit Management Studies at UW-Whitewater. The institute has also published a COVID-19 resource guide with recommendations and resources nonprofits can tap for relief and assistance.
The study found the pandemic and ensuing economic shutdown have impaired organizations’ abilities to provide vital services to at-risk Wisconsinites, help empower persons with disabilities, feed the hungry, house the homeless, embody the arts, protect the environment, teach children and combat social issues like mental health and drug addiction.
The report aims to provide government and community leaders with a current look at how nonprofits are faring in the pandemic and the need for “long-term support to ensure the ongoing provision of critical services throughout Wisconsin.”
Among the findings:
93% saw cash donations decline 80% reduced volunteers
47% laid off employees
93% said layoffs are possible 19% cannot meet payroll
12% have stopped providing services
40% have moderately or severely cut services
78% worry about the needs of vulnerable populations
69% canceled fundraisers
50% cut services to marginalized individuals
Kevin Klandrud, executive director of the Paralyzed Veterans of America Wisconsin Chapter, said coronavirus was “tremendously disruptive.” Since late March, the Milwaukee-based group has had to cancel all of its sporting events, which help members exercise and the organization raise money. Members now exercise together via Zoom, but the opportunity to raise money during events has dried up.
“I can’t get up and make a speech in front of a wheelchair basketball game saying, ‘This is funded in part or in whole by Paralyzed Vets of America’ when there is no game,” Klandrud said.
Medical exams for members, all of whom have spinal cord injuries or defects, have been halted. And yet Klandrud said he considers the group blessed because it’s only seen donations fall by 20% where other nonprofits face steeper declines because most of the organization’s revenue comes from regular donors who give every month, quarter or year.
“We’ve actually been very blessed by the fact that we’ve just seen a nominal dip in fundraising,” he said.
Warner said nonprofits have faced a “tremendous learning curve” as they sought ways to provide vital services safely, adapted to virtual communications and sought ways to protect the health and safety of clients, volunteers and employees.
“This survey tells people not to forget about this sector. The nonprofit sector helps our quality of life,” Warner said. “Businesses will struggle and do the best they can. Governments will serve who they can with fewer tax dollars, but nonprofits step in with shows, environmental protections, trail management and more. They’re doing so many things for our communities.”
The impact could ripple through the state’s economy, as well. In 2019, a Helen Bader Institute report found the state’s 36,000 nonprofits employ almost 300,000 people and pay $14.6 billion in wages annually. U.S. Bureau of Labor Statistics data from 2016 showed the state’s concentration of nonprofit employees, 11.9%, is higher than the national average of 10.2%.
The survey results highlight an issue that’s gaining national attention, too. A recent poll from the Charity Reform Initiative of the Institute for Policy Studies showed 72% of Americans support Congress
taking action to help generate $200 billion more for nonprofits over the next three years, without additional costs to taxpayers. The bill would increase private foundations’ required annual payout from 5% to 10% for the next three years, providing a needed infusion of cash.
Organizations like United Way chapters have launched, and continue to fund, coronavirus relief efforts that have aided more than 75 nonprofits in the area, but long-term financial concerns still loom.
The Fox Cities United Way recently announced another $50,000 for the Appleton region’s community response fund, which has raised $1.2 million, but President and CEO Peter C. Kelly said supporting the community’s immediate needs is now bumping up against the organization’s annual campaign, which supports more than 100 programs in the area that would struggle to survive with donors’ annual contributions.
The Fox Cities United Way “must now consider the survival of the nonprofit programs we fund through donations to the annual campaign,” Kelly said. “The programs we fund have always played an important role in making the Fox Cities a great place to live, but they are perhaps more critical than ever as we face the daunting social crises resulting from the pandemic.”
The impact isn’t uniform, though. Arts, conservation and education nonprofits have been hit worse than human services, animal welfare and health organizations. In some parts of the state, nonprofits are collaborating more; in others, they’re working more closely with local and regional government.
Nonprofits that have weathered the pandemic credit the ingenuity of volunteers, community support and early planning for being able to keep up with the increased demand.
Dale Davis, operations manager for the South Wood County Emerging Pantry Shelf, said it took the entire community to keep up with the increased demand for services in the Wisconsin Rapids area. New and existing volunteers stepped up to help clean the pantry and convert it to curbside pickup. Davis saw the pandemic coming and in February bought pallets of staple foods. And social clubs and schools redoubled supply drives.
“It is still a financial struggle,” Davis said. “We’re working more hours, putting out more food and serving more clients, but we haven’t had to diminish service at all. It’s been a lot more work and we’ve incurred more expenses, but it has been amazing how the community has stepped up. We have been blessed.”
Here’s a look at the impact on nonprofits in some regions of the state.
Milwaukee
Milwaukee-area nonprofits accounted for 26% of the 526 respondents, the most of any region in the state. The responses show the state’s largest metro area has felt more of the impact.
Of the groups that responded, 43% said they had marginally or severely reduced services, higher than the statewide average of about 40%. Another 26% reported offering drastically reduced services to at-risk clients.
Joan Schneider, executive director of the Center for Deaf-Blind Persons Inc., based in West Allis, said the services the group provides to clients who are deaf and blind include support service providers to assist clients with tasks like grocery shopping and rehabilitation training to help clients engage the world using tactile methods.
The pandemic forced the group to cut some services and lay off two staffers because of the pandemic. Schneider said the amount of the organization’s lost revenue is still to be determined.
“Our rehabilitation training really had a hit these last two months,” Schneider said. “For our population, (social distancing) is not even possible.”
Milwaukee organizations reported high levels of collaboration with other nonprofits (74%) and local governments (56%), but they also reported reduced volunteerism (86%) at a higher rate than statewide.
Northeastern Wisconsin
Northeastern Wisconsin nonprofits accounted for the second-highest volume of responses with 139, or 23% of the statewide total. Warner, at UWGB, produced a separate report that examines the impact in the region.
She said the responses and data should help governments and communities understand and respond to the needs of their community.
“We got a really healthy response from our region, second only to the Milwaukee area,” Warner said. “It allows us to give this information on what’s going on with them back to government and community leaders so maybe we can do something about it.”
Jessica Diederich, executive director of Freedom House Ministries, Green Bay’s emergency homeless shelter, said volunteer programs stopped in midMarch when the pandemic hit Wisconsin. The organization, which is currently working with 16 families, halted dropoff donations, fearing they would put donors in harm’s way. Church food drives that are vital to stocking the shelter’s shelves have been canceled.
Diederich recounted being in a Green Bay grocery store in March with two carts full of supplies for the shelter, spending money not in the budget. She said Freedom House has been supported by clever donors who have placed curbside orders at local grocery stores for the staff to pick up or have called a local restaurant and ordered food for the residents and staff.
“We did not go without and it’s because of them,” she said. “I can’t tell you how grateful we are to the community. Everyone has been so creative in finding ways to help.”
Despite such creativity, solutions to some problems remain elusive, Warner said.
“As long as the coronavirus is around, it’s going to be tough to include volunteers and open many of the hands-on nonprofits. If you have a mentoring program, when will it be safe to work with the child again? It might be another year,” Warner said. “After that, I just don’t know what will be left. I don’t think some of them will be able to maintain their offices, staff or, in a lot of cases, volunteers. Older adults are a lot of volunteers for nonprofits and they’re also the ones who want to stay home right now. If they’re not able to come in and help right now, that will change things.”