Mid-Hudson Valley nonprofit organizations are reeling financially because of the COVID-19 pandemic, which has resulted in widespread shutdowns. A recent survey shows income is plummeting while many see an increased need for services.
Nonprofit organizations are seeing their revenues drop because of a decline in donations, fees for services and canceled fundraising activities. For other nonprofits, the cancellation of income-generating programs and activities has halted their incomes. According to a recent survey of 215 nonprofits conducted by the Center for Effective Philanthropy, more than half of the nonprofits surveyed throughout Columbia, Dutchess, Greene, Orange, Putnam, Sullivan and Ulster counties described their financial circumstances as so difficult they may have to make significant changes – from laying off staff to ceasing operations - within four months or less. The study was commissioned by several Hudson Valley-based philanthropic foundations including the Millbrook-based Dyson Foundation, where Andrea Reynolds is president and CEO.
“I think we were expecting to hear that some organizations were going to have a tough time surviving this,” says Reynolds. “It was just maybe more of how quickly some might find themselves either running out of cash or not being able to stay in their services in the mid to long term.”
The severity of the hit depends on many factors.
“How much reserves did they have going in to this; did they reduce their cash burn rate right now, are they working with their boards to figure out long-term contingency plans, which might include, for some of them, going out of business,” Reynolds says. “For some of them, it will be potentially finding a merger partner or some other restructuring to help them survive the current crisis and come out of it.”
Asked to estimate the number of months they could continue operating with current revenue streams “without severe disruption to your operating model,” 41 percent of survey participants responded two to four months; 14 percent said one month or less; and roughly the same percentage said four to six months or six months or more, 18 percent and 19 percent respectively. Brian Doyle is CEO of Family Services in Poughkeepsie, where the impact of the pandemic has hit hard.
“We are seeing certainly threats to our income, our revenues, our funding. They come in all forms. We see funding from private donors and businesses and government contracts, of course, and foundations, and we have a lot of uncertainties as to whether and how that funding will still be available to us,” Doyle says. “So at this point, we are providing the services that are needed. We have had to furlough some individuals. However, we just brought back a number of individuals from furlough.”
He was able to return some 25 employees out of the 48 furloughed thanks to the federal Paycheck Protection Program. The CEP survey shows that 45 percent of nonprofits have experienced an increase in demand for programs and services, and 15 percent expect increased demand. The survey says 72 percent have experienced a decrease in earned revenue, such as fee for services and contracts, with another 10 percent anticipating such a drop. As for contributed income, such as grants and donations, 58 percent have seen a drop with another 28 percent expecting this. Family Services’ Doyle is seeing an increased need for behavioral health services.
“This is a time when people, owing to isolation, may be feeling greater signs of depression or anxiety. In addition to that, there are people that are clients at our Center for Victim Safety and Support. They certainly are seeing that there is a need there. As you can imagine, with heightened unemployment, the propensity toward violence, domestic violence in particular, is heightened,” says Doyle. “And then our children that we serve, they are home from school. And even some of our youth programming is suspended because we have to maintain social distancing.”
He says Family Services is trying to connect with these families remotely. Meantime, Reynolds says the Dyson Foundation and others are operating as such:
“We’re maintaining our grant budget the way it is, but then we added additional funds to help specifically respond to the crisis. And there’s COVID-19 response funds in all the counties right now,” Reynolds says. “So that’s something that we hope to see continue and provide ongoing support through the nonprofits.”
“What we are recommending to, or I would suggest to people who’ve already either bought a ticket for an event that’s not happening or maybe sponsored an event that’s not happening, is to, if they can afford it, not to ask the nonprofits to give it back, allow the nonprofit to use those funds to help right now with their operating expenses,” says Reynolds.
In Columbia County, Co-Founder and Director Melissa Auf der Maur says Basilica Hudson’s public program and private events business relies entirely on mass gatherings. She says unlike more established nonprofits in the region, the majority of Basilica’s operational budget is supported by ticket sales, and there will be no income this year, which marks Basilica’s 10-year anniversary. The only hope, she says, will be private donors and government grants.
The CEP survey shows that 60 percent of nonprofits have added new services or projects to focus on a COVID-19 response; 38 percent have already laid off staff and another 17 percent expect to do so.