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Businesses must help nonprofits working to address COVID-related needs

December 07, 2020

Handshake_over_table_PhilanTopicjpgNonprofits are a key part of the U.S. economy — collectively, the third biggest employer by sector. And when the nonprofit sector is healthy and functioning, it benefits the for-profit sector as well. A recently published report found that nonprofits contribute more than $77 billion annually to the New York City economy — more than 9 percent of the city's total economic output.

But as we all know, the COVID-19 pandemic has dealt a devastating blow to the U.S. economy, and millions of Americans are suffering — especially Black and Latinx Americans. Despite the many challenges they face, nonprofits are stepping up to fill the gaps. Food banks are distributing 38 percent more food than they did in 2019. Charities are providing computers to students who need them. Unemployed Americans, many of them well aware of the kind of assistance ordinary Americans need and are not receiving, have founded nonprofits to bring volunteers together to meet those needs.

While there has been amazing progress on the vaccine development front, the crisis is likely to drag on for months and the outlook for additional federal assistance is uncertain. Complicating the situation, many of the newest nonprofits aren't eligible for support via the federal Paycheck Protection Program or other government programs. Business leaders can debate the extent of their ethical responsibilities, but in a crisis, putting aside any concerns they may have and doing the socially responsible thing almost always works to their advantage. All the more reason, then, for businesses and individuals to step up at this critical moment and support nonprofits that are being buffeted by the pandemic.

The situation is dire. Even as they scramble to ramp up their services to meet growing demand, many nonprofits are barely hanging on, and nearly a third are at risk of going under. A recent survey by BryteBridge found that among new nonprofits, 79 percent have experienced a drop in revenue, with 38 percent reporting revenue losses of 50 percent or more. Nonprofits established in the last five years are four times as likely to say they are close to not being able to cover their operating expenses than those in business for six or more years, while almost 60 percent of new nonprofits have had to furlough staff and more than 20 percent have had to implement layoffs.

As the president of BryteBridge, I've seen a dramatic increase in requests for support over the last ten months, whether it's help with fundraising, compliance issues, or newly formed organizations looking to apply for 501(c)(3) status.

If they aren't already doing so, businesses and individuals in a position to support nonprofits financially should look hard at where and how they can make the biggest impact with their donations. And they mustn't overlook grassroots and newly established nonprofits, which are less likely to have built up reserves for a rainy day. Supporting organizations that are struggling with capacity constraints — whether through employee volunteer programs or pro bono business support — also can make an enormous difference. By eliminating some of the burden of administrative and compliance requirements, we can ensure that nonprofits are better able to serve their constituents and focus on their mission.

The need for the services delivered by nonprofits right now is enormous, and many organizations are working creatively to rise to the challenge. Many more are running on fumes. It’s time for individuals, businesses, and the private sector to step up.

Brian_Davis_BryteBridge_philantopicBrian Davis is president of BryteBridge, a provider of nonprofit services.

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