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State of the Sector Report: Nonprofits Adapting to COVID-19, but Challenges Remain in Face of Increased Demand and Dwindling Budgets

HAF+WRCF recently published the State of the Sector Report, a yearlong look at the affects of the COVID-19 pandemic on our local nonprofit agencies.

A region-wide survey of nonprofit agencies highlights the nonprofit sector’s strength and resiliency to adapt in a year of uncertain conditions.

Released today, the 2020 Winter State of the Sector Report, now available for downloading here, highlights 101 nonprofit organizations in Curry, Del Norte, Humboldt, and Trinity counties. The survey, conducted by the Del Norte Nonprofit Alliance and the Northern California Association of Nonprofits, reveals major strengths and challenges facing nonprofits as they strive to meet their service commitments to the communities they serve.

Overall, nonprofits are adapting to meet critical “safety-net” needs during the pandemic in new and creative ways, often with greater demands for their services, fewer staff and volunteers, and less flexible funding.

A common theme among survey responses was a noticeable increase in nonprofits’ service demands in all sectors, including food and housing security, youth and family services, organizations serving Black, Indigenous and Communities of Color, and nonprofits supporting survivors of domestic and intimate partner violence. While 45 percent of respondents said their services were more in demand, nonprofit organizations are struggling with an average 20 percent reduction in staff and volunteers.

Almost all organizations polled (90 percent) reported they have adapted their business models, with two-thirds (66 percent) pivoting to some level of remote work and service delivery. For some organizations, the large and unexpected costs of transitioning to a more technology dependent operation have presented significant financial difficulties as most do not have funding for such expenses. 

To meet the challenges of providing critical services during this time, many nonprofits (42 percent) reported they are relying more on their partners to create accessible services and increase organizational capacity. As one anonymous respondent wrote, “this has been a great opportunity to find common ground between like organizations, which will hopefully [reduce] the number of silos in the nonprofit community.”

Budgets and income were a major concern for many respondents, with nearly 40 percent of nonprofits reporting decreased individual giving and 68 percent reporting a decrease in earned income. Certainly, COVID-19 restrictions have hampered nonprofits’ efforts to fundraise, with many organizations reporting that major fundraising drives were canceled due to the pandemic. On a bright note, 60 percent of nonprofits said they were “very confident” or “confident” in their ability to serve their organizational mission through 2021.

One important factor underscored by the report is the critical role nonprofits play in reaching underserved communities. Black, Indigenous, and People of Color (BIPOC) serving nonprofits make use of trust,  cultural and linguistic understanding to reach populations that otherwise are not served by government-led pandemic response efforts.

As a response, 76 percent of surveyed nonprofits said they are using a racial equity lens at some level to make key decisions concerning their disaster response, however, the majority of respondents (68 percent) indicated that BIPOC individuals constitute less than 10 percent of their staff and boards of directors. This disparity in staff and populations served highlights the need to grow the practice of racial equity in decision-making while also recruiting BIPOC for staff and leadership positions.

To read the full report, download the PDF here (3.8MB).




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