For two years and counting, the COVID-19 pandemic has fundamentally changed the way that organizations and workplaces operate — and nonprofits are no exception.
From grappling with decreased revenue and funding, navigating layoffs, reimagining programming, and investing in new remote-work technologies; nonprofit leaders have been busy adapting their organization’s programs, financial plans, and goals in order to survive the ongoing pandemic.
A recently released survey from BDO – one of the nation’s leading accounting and advisory firms – uses data from midrange (< $25 million in annual revenue), upper-midrange (revenue between $25 million and $75 million), and large (annual revenue greater than $76 million) nonprofit organizations across the United States to illustrate the ways in which the pandemic has challenged and changed the sector. Here’s what they found.
CHALLENGES WERE APLENTY
The COVID-19 pandemic was an inflection point for charitable organizations across the globe as many experienced an increase in demand alongside a decrease in volunteering and revenue.
By the numbers, here’s how COVID-19 affected nonprofit organizations in 2021:
- 54% of nonprofits had to cancel fundraising events
- 45% of nonprofits saw a decrease in revenue or funding
- 40% of nonprofits had to cancel programming
- 36% of nonprofits experienced an increased demand for services
- 17% of nonprofits decreased employee compensation
- 50% of large nonprofits were forced to make hiring freezes, layoffs, or furloughs
The trope is true: challenging times breed innovative solutions. Nonprofit leaders proved their resilience over the last two years by evolving their organizations’ workplace strategy, programming, and fundraising efforts.
SOME THINGS ARE CHANGING FOR THE BETTER
Public health regulations and best practices kept many employees out of the office in 2021. To that end, organizations are taking the initiative to invest in their digital workforce: 60% of organizations accelerated their investments in new technology in 2021 and 64% say they plan to do so in 2022.
When asked about strategies they plan to pursue in 2022, 40% of organizations said they plan to automate operations.
Nonprofits are also rolling out new programming, with 43% of organizations developing new services in 2021 to meet the shifting needs of their communities, and 39% establishing new partnership opportunities during the pandemic.
Tumultuous times have further forced nonprofit leaders to streamline their decision-making processes. 43% of nonprofit organization leaders say that the pandemic has made them adopt faster decision-making processes so that they can quickly respond to rapidly evolving COVID-19 guidelines, rules, and best practices. That quick, confident decision-making may be a factor in improving workforce connection and community: 33% of organizations say that they saw improved workforce culture and unity in 2021.
The pandemic also increased visibility for many organizations, with 43% reporting that the pandemic has increased public awareness of their mission.
ONE SHARED GOAL? KEEP THE FUNDING COMING
Nonprofits across the board are concerned with their bottom line. While 66% of surveyed organizations reported positive net income during the 2021 fiscal year —31% saw an increase in donations — surveys suggest that organizations are worried about maintaining revenue levels in the new year.
- A quarter (25%) of organizations anticipate a net revenue loss during the next fiscal year
- 25% of organizations say they’re worried about maintaining their revenue levels
You can expect to see organizations get experimental with finding new funding in the new year to mitigate a loss of revenue: 30% of organizations say that seeking new sources of revenue and funding is their top priority for 2022.
HYBRID FUNDRAISING STRATEGIES WERE KEY
In terms of fundraising, organizations stayed afloat during the pandemic by employing a variety of funding strategies. Across the board, nonprofits derived funding from a combination of the following:
- Fee for service programming (26%)
- Government grants (20%)
- Investments (16%)
- Gifts from contributors (14%)
- Foundation grants (8%)
- Fundraising and special events (5%)
- Membership dues (5%)
- Conferences and meetings (2%)
- Publications and subscriptions (1%)
ABOUT THE AUTHOR
Lia Tabackman is a freelance journalist, copywriter, and social media strategist based in Richmond, Virginia. Her writing has appeared in the Washington Post, CBS 6 News, the Los Angeles Times, and Arlington Magazine, among others. She writes weekly nonprofit-specific content for 501c.com.