Covid Pandemic and Recession Hurt Nonprofits as Need Surges

Even as the economic crisis creates new demand for their services, organizations with millions of workers are resorting to layoffs as revenues dry up.After being furloughed from her contracting assignment, Melody Boykin turned to the Y.M.C.A. in Chicago for food and supplies for her and her 2-year-old son.Credit…Sebastian Hidalgo for The New York TimesJuly 24,…

Covid Pandemic and Recession Hurt Nonprofits as Need Surges

Even as the economic crisis creates new demand for their services, organizations with millions of workers are resorting to layoffs as revenues dry up.After being furloughed from her contracting assignment, Melody Boykin turned to the Y.M.C.A. in Chicago for food and supplies for her and her 2-year-old son.Credit…Sebastian Hidalgo for The New York TimesJuly 24, 2020In the grip of the coronavirus pandemic, the Y.M.C.A. has provided a lifeline to many vulnerable Americans. As the health crisis and its economic disruption eat away at the group’s revenues, the question is whether anyone will throw a lifeline to the rescuers.The group’s 2,600 outposts transformed in the first wave of illness into civic centers, caring for the children of emergency medical technicians, doctors and other essential workers when day care centers closed down; feeding the poor when schools that offered meal programs shut their doors; even housing the homeless, when slipping from view could mean a silent death.Yet like much of the nonprofit sector, the Y.M.C.A. finds itself in financial jeopardy just as it is needed most. Before the pandemic, affiliates were typically operating on margins of 3 percent or less, and now revenues are down 30 to 50 percent nationwide. Most have furloughed 70 to 95 percent of their workers, and without help, hundreds of branches may be forced to close.“Our twin priorities are service and survival,” said Richard Malone, president and chief executive of the Y.M.C.A. of Metropolitan Chicago, which has closed three of its 17 branches since the pandemic struck. “It is the nonprofit sector that needs help, but it’s the people who we serve that bear the brunt.”Covid-19 has driven the United States economy into a sudden and deep recession, hitting local businesses as well as multibillion-dollar corporations. Less noticed has been the immense toll on the nonprofit groups that Americans rely on for social services, medical care and spiritual needs. Tens of thousands of nonprofits are likely to close without some kind of rescue package, the research group Candid concluded from an analysis of tax filings.That would not only be a blow to those who rely on their services but also do further damage to the economy. The sector is the nation’s third-largest private employer, with 1.3 million nonprofits employing roughly 12.5 million people, about 10 percent of the total who are working in the private sector. A Johns Hopkins University study estimated that 1.6 million nonprofit jobs were lost between February and May.Hoping to prevent devastating new cutbacks, large nonprofits like the American Heart Association and the American Red Cross are asking for federal grants and loans. Nonprofits also have a big stake in whether Washington helps to close the gaps in state and municipal budgets — a major source of funding especially for those providing social services.“This question of whether there’s going to be a stimulus bill to state and local governments is very important to nonprofits,” said Lester Salamon, director of the Johns Hopkins Center for Civil Society Studies, who has studied the nonprofit labor market for decades. “Otherwise, they’re going to get really walloped.”Nonprofits range from big-city hospitals to thrift shops that support local charities, and they are being upended by the pandemic in different ways. Many cannot fulfill their functions because of shutdowns and social distancing. For food pantries and free clinics, the economic upheaval has created a surge in clients.ImageThe Rauner Family Y.M.C.A. in Chicago. “It is the nonprofit sector that needs help, but it’s the people who we serve that bear the brunt,” said Richard Malone of the Y.M.C.A. of Metropolitan Chicago. Credit…Sebastian Hidalgo for The New York Times“People who used to donate to nonprofits are
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