Non-profit agencies in London are taking a pounding in the coronavirus fallout, with just some of those groups losing more than $9 million combined in the first two weeks after the global pandemic was declared.
Leaders in the sector say the crisis spells huge trouble for local organizations, but is also opening the door to innovation and creativity.
“This is really difficult. There is that shared grief,” said Michelle Baldwin, head of the Pillar Nonprofit Network, which supports 600 such groups in London.
When Pillar surveyed its members to begin to gauge the devastation of COVID-19, the response was immediate – nearly a third of its members responded within a day – and the numbers stark.
By March 24, about 90 agencies who responded to the survey had lost nearly $9.1 million in revenue, with tens of millions more looming.
One organization said it stands to lose $1.1 million every week. Another predicted an imminent $10 million loss.
Others, about a quarter of those who answered the survey, didn’t yet know how much revenue they’d lost. A smaller portion said they hadn’t lost any revenue.
About a third of those who responded to the survey said their mission was at risk. Forty-four per cent reported staff layoffs, reduced hours or wage cuts. Only two per cent said COVID-19 was having no, or limited, impact in the short-term.
Baldwin said the results underline the value of the work these organizations do locally.
“It is about recognizing the importance of the non-profit sector. We need it here, and afterward,” she said. “Social enterprises are both social and economic drivers.”
In many ways, the dramatic numbers are no surprise.
Western grad Brian Emmett – chief economist for the charitable and nonprofit sector with Imagine Canada, a national umbrella organization – estimated the country’s registered charities will see financial losses between $9.5 billion and $15.7 billion this year, depending on how long social distancing lasts. He predicts somewhere between 118,000 and 194,000 people will be laid off.
And those numbers doesn’t include any of the non-profit groups that aren’t registered charities.
Cancelled events and fundraisers hit bottom lines hard in London, as elsewhere.
Those are often key to bringing thousands of dollars in donations through the door. Individual donations may also have dipped as Londoners watched markets tank and layoffs happen in light of COVID-19.
Much of the losses were also rooted in the sale of goods and services that had to be stopped, quickly, after the provincial government declared a state of emergency. Baldwin said earned revenue usually makes up almost half of expected revenue for non-profits and charities.
United Way Elgin Middlesex has also cut funding to agencies for programs that aren’t operating because of the virus, CEO Kelly Ziegner said.
Given the uncertainty now over its own finances, the United Way has also told agencies that funding for them is guaranteed for three months only, and will be provided in monthly installments, Ziegner said.
“We have a number of agencies where their programs simply aren’t operating, for example, school-based programs. We’ve paused that funding. We can’t fund programs that don’t operate. It’s just a reality.”
Those cuts add up to about $75,000 in funding a month, she said.
Usually, the United Way provides agencies stable funding for a year or more, Ziegner said.
But, now, “It’s very hard for us to commit long-term to our agency partners.”
At the end of three months, the United Way will assess its contributions to agencies, she said.
That should give agencies some time to make additional funding plans, or pivot to services – such as food supply and delivery — that are essential, Ziegner said.
United Way Elgin Middlesex relies on payroll deductions (from corporate campaigns) for about 40 per cent of its funding, she said.
The organization is still assessing what the impact of businesses closing and layoffs will mean for those contributions, Ziegner said.
“If people are not being paid, those contributions and that source of revenue will erode for us. So we’re just trying to get a handle on that. That would our biggest concern in the short term,” she said.
“Could more cuts come? Potentially. But until we have a bigger understanding of the financial picture, it’s hard to say.”
Government funding commitments have, so far, remained stable, Baldwin said. And some relief has been announced since the survey was sent to Pillar members. One of the agency’s roles is to advocate for its members at all levels of government.
And many organizations are showing the power of resilience and perseverance, pivoting to new virtual strategies and using innovative ideas to stay alive, Baldwin said.
Pillar has started a support group for executive directors to share ideas, successes and worries with one another, in addition to other support for members.
“We always talk about the cross-sector collaboration,” Baldwin said.
“If ever there was a moment for that to be our focus and our way forward, it is needed now more than ever.”