COVID-19 Threatens the Survival of Charities and Nonprofits

When Covid-19 became a global pandemic in March, there was a surge of donations from all corners of the world. Billionaires dug deep into their pockets to donate billions of dollars to local charities.

Celebrities chipped in with personal donations and mobilizations through social media. After that, mega-corporations like Facebook, Apple and Microsoft went into a showdown on who could donate the most.

Sadly, the show didn’t go on for long. Somewhere along the way, billionaires and corporations stopped donating. On the flip side, working-class were forced to reduce donations due to nationwide lockdowns and massive job losses.

With that in mind, these are some of the ways COVID-19 is impacting charities and non-profit organizations negatively.

Reduced Revenue

Charities and non-profit organizations acquire their finances through fundraising and donations from well-wishers. But with people experiencing reduced income worldwide, they are donating less.

According to a study by Vantage Point, 74% of charities are finding it challenging to raise money through crowdfunding. On the other hand, 59% of NGOs are earning less every month, while 40% have limited finances in their reserves.

Low donations mean children who depend on donors to survive are going hungry. They risk becoming homeless, and their mental health is getting worse. On the flip side, animal charities are facing fairly similar problems: they can’t rescue or maintain abused pets.

Staffing and Volunteer Problems

The second biggest challenge for charities amid COVID-19 affects their workforce. National lockdowns mean people can’t travel freely. Worse, volunteers aren’t willing to provide their services when the risk involves a deadly disease.

Additionally, many NGOs are earning significantly less than in past years. And some of these companies are being forced to furlough or lay-off employees because they can no longer afford to keep them.

The worst part of staffing issues is that charities don’t know when this problem will end. They might have to wait for six months, a year or longer before they start to receive volunteers. And the longer it takes, the worse it becomes for them.

Massive Service Disruption

With lockdowns being the norm everywhere, many NGOs and charities have a problem fulfilling their services. It’s not necessarily a monetary or staffing issue. It’s the fact that most businesses have been affected by COVID-19.

As such, charities can’t get supplies, or the means to transport products where they are needed. Some non-profit organizations are also facing evictions and property auctions. These issues are threatening the survival of charities not only now but for years to come.

According to the Vancouver Foundation, charities are battling two storms: COVID-19 and economic downturn. Both storms are devastating and could spell doom upon the industry unless action is taken urgently.

Demand Outstripping Supply

This seems obvious, but it can’t be stressed enough. COVID-19 is straining charities to the point that they don’t have enough resources to support those in need. In other words, the demand for charity assistance is much higher than it’s available.

Health-related charities are the hardest hit organizations. There’s a tremendous demand for first-respondents services. There’s an even bigger demand for PPEs, sanitizers and other necessities in the wake of coronavirus.

Fortunately, many governments have stepped up to offer health-related solutions. In some cases, government support has nearly solved the emergency, PPE and ventilator issues that have been rampant in the past few months.

Cancellation of Charity Events

Charity events like marathons, concerts and group activities play an important role in keeping non-profit organizations financially stable. Some charities earn 80% of their annual income through such events.

Due to lockdowns, however, they will have to postpone their events and risk not making money. Organizations that are heavily dependent on charity events will suffer the most. And if they fail to find alternative ways to generate money, they could end closing down.

Luckily, most charities qualify for emergency grants during crises such as pandemics.  It could take a while before governments provide these grants. But all in all, there’s hope at the end of the tunnel.

In the meantime, here are some actionable measures charities can take to thrive during these trying times:

• Diversify their Income Sources

With everything happening in the world, this is not a good time for charities to depend on a single income source. Instead, it’s a time to diversify in as many ways as possible. Additionally, NGOs need to be creative to improve their financial reserves.

For starters, charities that survive through company donations can open their donations from well-shares everywhere. In turn, those that use events to gather money can turn to virtual concerts for the same.

• Loosen Restrictions

Many charities have rules on who can donate and the minimum they can offer. Some of these conditions are important and necessary. Others need to be relaxed to help these organizations attract donors.

On the flip side, charities can also repurpose donor money to attract the attention of people who want their money spent on specific purposes. For example, health-related NGO’s can prioritize on COVID-19 services instead of other conditions.

• Listen and Request Funding Empathetically

Amid COVID-19, charities need to listen to their donors and become empathetic even as they ask for donations. Unlike any time before, most people are battling coronavirus in some way.

They might have lost loved ones or their jobs. Either case, many donors have valid reasons for not giving their cash to charities. To get donations, NGOs need to communicate openly about their plans.

They can also support brands to get assistance from governments so that they have more funds for donations. Alternatively, they can talk with their donors to ask for help at specific dates in the future.

Conclusion

COVID-19 is impacting charities and NGOs immensely. At the start of the pandemic, there was a rise in the number of donors. But over time, donations subsided, and not-for-profit groups began to suffer.

There are no signs of charities recovering from the economic impact of COVID-19 soon. But if governments provide support and companies get back to their giving ways, charities will thrive.