Charities and nonprofits at risk of closing

More than onethird of U.S. nonprofits are in jeopardy of closing within two years because of the financial harm inflicted by the viral pandemic, according to a study released Wednesday by the philanthropy research group Candid and the Center for Disaster Philanthropy.

The study’s findings underscore the perils for nonprofits and charities whose financial needs have escalated over the past year, well in excess of the donations that most have received from individuals and foundations. The researchers analyzed how roughly 300,000 nonprofits would fare under 20 scenarios of varying severity. The worstcase scenario led to the closings of 38% of the nonprofits. Even the scenarios seen as more realistic resulted in closures well into double digit percentages.

Among the most vulnerable nonprofits, the study said, are those involved in arts and entertainment, which depend on ticket sales for most of their revenue, and cannot significantly reduce their expenses.

The perils that nonprofits face are similar to the economic damage from the pandemic that forced so many restaurants to either close or operate at deep losses over the past year.