Emerging Ready: Concerns About Funding During & After COVID-19

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As nonprofits begin to emerge from the COVID-19 crisis, almost 82 percent say that pre-pandemic levels of funding are now questionable. This and other fundraising challenges are concerning nonprofit leaders according to a survey recently conducted by Convergent Nonprofit Solutions.

“Nonprofits who want to emerge from the COVID-19 crisis ready to survive and even thrive in the future need to cast a bigger net for investors and be armed with more information on their outcomes and impact on their community,” said Tom Ralser, Convergent Principal and Outcomes Lab Director.

As nonprofits begin to emerge from the COVID-19 crisis, recognizing their priorities and concerns will help us all serve them better. In May, Convergent sent a brief questionnaire to our database of thousands of nonprofits. The response is telling, and this picture of challenges surfaced from the 234 organizations surveyed:

  • Almost 82 percent say that pre-pandemic levels of funding are now questionable.
  • Over half of all respondents feel hesitant to move forward with future funding efforts, primarily because of the economy.
  • Respondents see a landscape where nonprofit organizations feel more pressure for funding based on less money available, more nonprofits vying for dollars, and donors more challenging to cultivate.
  • There are concerns about communicating accomplishments with their investors’ dollars and the value that their investment provides.
  • The two elements most likely improve funding in the next 18 months are better clarity and communication about the ramifications of COVID-19 on a respective organization and/or the urgency of need. These were the top response from 61 percent of those surveyed.

“Nonprofits who want to emerge from the COVID-19 crisis ready to survive and even thrive in the future need to cast a bigger net for investors and be armed with more information on their outcomes and impact on their community,” said Tom Ralser, Convergent Principal and Outcomes Lab Director.

Current Funding Situation and View of the Immediate Future
When asked if their organization was in a capital campaign in March of 2020, when the general economy recognized the full force of the COVID-19 crisis, 85 percent of the organizations responded that they were not. One third of those surveyed do plan to begin a structured campaign, which includes both annual and capital campaigns, within the next year. Over 11 percent say they were planning to begin a structured campaign but have decided not to because of the pandemic.

Just over half (55 percent) of the Human Services sector still intends to launch a structured campaign within the year. Contrary to that sector, the Economic Development sector indicated that 69 percent of organizations do not intend to launch a structured campaign within the year.

Almost half of respondents (49 percent) say their structured campaign goal is under $500,000, indicating that these are annual rather than capital campaigns. Over 27 percent report their goal is between $1,000,000 and $5,000,000.
Their view of the immediate future is bleak. Over 81 percent say that existing funding at pre-pandemic levels is now questionable, while only seven percent say that COVID-19 will not impact funding levels. Twelve percent say that the pandemic provides an opportunity for increased funding. Six percent have already seen a decrease in the number of donors, and 15 percent are receiving fewer dollars than pre-COVID-19.

Cultivating more prospective investors and translating outcomes as more investable are the factors seen by respondents as most likely to help position a structured campaign for success in the coming months. Translating outcomes, broader outreach, and board involvement/education were virtually tied among the total response. However, a closer examination reveals that translating outcomes is the top or tied for the top response in seven of the nine represented sectors across the entire survey.

Staffing and Program of Work
Affordability of current staffing levels, with over 42 percent, is by far the most concerning category organizations face internally because of COVID-19. Slightly more feel their program of work (32 percent) would need to be downsized/cut, compared to those that think their size/scope due to market demands (26 percent) would increase. Twenty percent say COVID-19 does not impact their program of work.

Future Funding Challenges
When asked if there is an overall hesitation internally to move forward with a structured campaign, 53 percent of the respondents answered in the affirmative. Forty-seven percent replied that there is not. Of those replying there was hesitation, the highest response (61 percent) was that their board thinks a campaign would not be successful because of the economy. This finding is followed by 39 percent who feel that the board is anxious because of their own economic situation and is less likely to give. Thirty-two percent say that their board has less time/interest/enthusiasm than pre-pandemic.

On a macro level, we asked respondents to rank the funding challenges they expected to face in the future. Their responses reflect a landscape where nonprofit organizations feel future pressure for funding due to less money available, more nonprofits trying to get it, and donors more challenging to cultivate.

The survey concluded by asking what is most likely to improve funding over the next 18 months. Better communication about the situation and/or the urgency of need was the top response, with 61 percent. Funding leadership by the board followed at 37 percent, enhancing the board’s confidence about the organization’s future at 31 percent, laying the groundwork now for a campaign at 30 percent, and the ability to afford a structured campaign at 27 percent.

This finding, combined with previous responses, points to an environment where communication, especially to stakeholders about the urgency and the value of outcomes delivered, are deemed to be more critical than ever. With the additional overarching feeling that the funding landscape is less than positive compared to pre-pandemic levels, it appears safe to say that funding, and better ways to achieve it, will be an area of primary, if not crucial, importance for the near future.

These are unprecedented times. While certainly not definitive, and with the landscape constantly shifting, the need to emerge ready appears to be well-understood in the nonprofit sector.

General Characteristics of Respondents
Data was collected via an online questionnaire administered by Convergent Nonprofit Solutions and SurveyMonkey between the dates of May 13-22, 2020. All responses were submitted voluntarily and represent reflections from 234 professionals at nonprofits in the United States.

The top sectors of respondents were Chambers of Commerce and Economic Development Organizations (38%), Human Services (24%), Education and Research (8%), Health Services (7%), and Arts, Culture, and Humanities (7%). Senior-level executives represented 73 percent of total respondents; staff represented 15 percent; and board members represented slightly over 7 percent.

About Convergent Nonprofit Solutions
Founded in 2009, Convergent Nonprofit Solutions is a national fundraising consulting firm that specializes in managing feasibility studies and capital campaigns for nonprofits in all sectors. Our clients learn how to translate what they "do" into what funders will "invest" in; a powerful approach that ends the constant struggle for funding and sustainability.
http://www.convergentnonprofit.com

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Kristin Harper