By Jaimi Dowdell and Benjamin Lesser
LOS ANGELES (Reuters) – Sacred Heart Community Service thought it was prepared for the pain the growing COVID-19 pandemic would cause in San Jose, California. The nonprofit, which has long helped those struggling to pay rent or keep the lights on, rallied donors and helped set up an $11 million fund that would offer up to $4,000 a month to eligible households.
The online application process went live on the morning of March 23. Within hours, the site crashed as more than 1,000 attempted to apply.
Ultimately, the organization stopped accepting applications after about 4,500 households had sought help. By April 13, more than 9,000 additional households had placed themselves on an interest list, hoping to be able to make their case for assistance if Sacred Heart raises more money.
“It is the most unimaginable scenario for everyone here,” said Executive Director Poncho Guevara. The aid effort has raised an additional $5 million in recent weeks, and Guevara said it will need much more to meet demand.
Charitable organizations are a critical part of the social safety net in the United States, providing food, shelter and cash assistance to vulnerable people who fall through gaps in government safety nets. But just as COVID-19 is causing a surge in demand for their services, it is straining the social service nonprofits’ efforts to help. With revenue streams dried up, fundraising events canceled and no relief in sight, some nonprofits are being forced to retrench when they are most needed.
Just weeks into the pandemic, some organizations have enacted widespread layoffs while others have cut programs.
SURVEYING THE DAMAGE
Reuters worked with Charity Navigator, a group that rates the performance of thousands of charities, to survey the impact of the COVID-19 crisis on nonprofits. More than 75% of the 150 responding nonprofits that provide key social services such as shelter and food reported that their organizations had suffered financially from the pandemic and the economic shutdown.
Meanwhile, 66% have seen an increase in demand for their services. And more than half have cut programs.
Nearly half of the social service nonprofits surveyed said they can’t get enough volunteers. And all of the 16 food banks responding to the survey reported a disruption in the supply chain, which is key to getting meals to vulnerable populations.
While some organizations acknowledge they are unable to meet the growing need, many say they have found ways to step up despite funding shortfalls. If the crisis continues for an extended time, though, many organizations told Reuters they don’t know how they’ll be able to maintain services without additional funding.
“Right now, we’re spending money that’s earmarked for other purposes instead of turning people away,” said Thomas Pietrogallo, chief executive officer of The Poverello Center. The South Florida nonprofit, which in a normal week before the pandemic was feeding about 1,500 people with chronic illnesses, had to shut down its thrift stores, which typically bring in $100,000 a month.
Meanwhile, the organization provided 60% more groceries in the last two weeks of March.
That same scenario is playing out at nonprofits of all sizes all across the country.
“A TERRIBLE PERFECT STORM”
Feeding America, a large, national hunger-relief organization, surveyed its network of about 200 food banks and found that as of April 2, 37% had experienced an immediate funding shortfall. The crisis also made it difficult for some U.S. food banks to stock enough food to meet demand, said Katie Fitzgerald, executive vice president and chief operating officer for Feeding America. The organization’s network relies on donated food and other products, but there is little coming in now, forcing food banks to buy food to fill the gaps.
“It is a really terrible perfect storm for us in that human need — the need for food — is skyrocketing right now at the same time the supply that we rely on for food is decreasing precipitously,” she said.
In Indianapolis, the line of cars waiting to pick up food at Gleaners Food Bank has grown at times to roughly 2 miles long, requiring metro police officers to direct traffic. The organization’s food pantry typically feeds 5,000 households in a month, but is on pace to provide meals to about 18,000 households in April, said Joe Slater, its chief operating officer and chief financial officer.
The food pantry raised about $5 million to meet increased need through the end of May. Ensuing months may be more challenging. The organization projects it will need at least another $5 million to get through the summer, Slater said.
The struggle is similar for groups that provide emergency housing for victims of domestic violence.
TURNED AWAY
On an average day, the YWCA of El Paso, Texas, offers transitional housing for more than 50 women and children fleeing abuse. But in recent weeks, because it had to enact social distancing to keep residents and staff safe, the El Paso YWCA says it has limited capacity to about 30. The charity isn’t accepting new seekers of shelter and has had to turn away four families, at a time when the El Paso police report a 9% increase in domestic violence calls.
For people who live with abusers, quarantine conditions can create explosive stress levels, especially if drugs or alcohol are in the mix, said Sylvia Acosta, CEO of the El Paso YWCA.
“I’m worried about stay-home orders, financial stress and liquor sales all at the same time and there not being any open space right now,” Acosta said.
Across the United States, 11 YWCA locations told their national organization on March 30 that they may need to shut down domestic violence programs or facilities in coming weeks for lack of funding and staff.
The El Paso YWCA said it is determined to keep providing services, but it lost revenue when stay-at-home orders forced it to close some of its child-care programs. Donations are up, but overall, revenue has dropped by 80%. The organization furloughed more than half of its 400 employees in late March.
“WE CAN’T JUST CLOSE”
“Nonprofits are just like everybody right now — in an unprecedented place — but the difference is that we can’t just close. We can’t. This is when we’re needed the most and so we’re going to have to figure it out,” Acosta said.
The pandemic’s hit to American nonprofits has global repercussions. After Tropical Cyclone Harold slammed into Vanuatu this month, thousands were left without food, shelter, or clean drinking water in the nation of South Pacific islands. World Hope International, a U.S.-based disaster relief organization, said it normally would have sent a team of up to 15 volunteers to provide drinking water for at least 10,000 people.
But pandemic-related travel restrictions made it impossible for World Hope to provide that support. The organization, which says it anticipates a 15% to 20% decline in revenue due to the pandemic, responded to 10 disasters around the world in 2018 and five in 2019. Continuing travel restrictions and revenue decline will hinder its ability to offer future disaster relief, the group said.
Even organizations that have been able to continue their regular services are concerned about funding. More than 30% of social service organizations projected they would see at least a 20% decrease in revenue through June, and 76% reported having to cancel fundraising events, according to the survey by Reuters and Charity Navigator.
GOVERNMENT AID
The $2 trillion economic package that President Trump signed into law on March 27 offers aid to some nonprofits, including access to loans to cover payroll and operating costs. The law also expands the ability of taxpayers to claim deductions on cash donations made in 2020.
More help may be coming. Rep. Seth Moulton, Democrat of Massachusetts, introduced legislation on March 27 after hearing that YMCAs in his state were struggling to stay afloat while providing child care to essential workers and food to poor children out of school. The bill, which has bipartisan support, would provide $60 billion in emergency funding to nonprofits.
“When our team looked into it, we realized that nonprofits severely hurt by the coronavirus were not receiving the same financial relief as for-profit businesses and industries, even though they were facing the same loss of revenue and economic disruption,” Moulton said.
(Reporting by Jaimi Dowdell in Los Angeles and Benjamin Lesser in New York. Edited by Janet Roberts.)
