Coronavirus (Covid-19) Hitting Charities Hard?

​After the stock market had its worst day since the crash that touched off the 2008 financial crisis, experts urged nonprofits to prepare their finances for the possibility that the economy would face a long-term setback from the coronavirus pandemic. Nobody knows whether the economy will face as deep a struggle as it did in 2008, a year when charitable giving plunged 5.7 percent, according to "Giving USA," the steepest decline since it began its survey in 1956.
Fundraising consultants and nonprofit experts urged charities to start planning for a prolonged recession — but some also cautioned that it’s too soon to make any drastic moves, like cutting staff, because it’s not clear yet whether a recession is imminent.
Dan Thain, chief fundraising strategist and creative director at Blue State, said nonprofits should stick with their current fundraising strategies despite the turmoil upending financial markets.
"There are so many unknown unknowns at the moment," Thain said. "My advice would be to push on, but pull back if you’re not seeing the response rates that you would typically see."

​Meanwhile, nonprofits should be frugal and try to pad their reserves where possible, he said.
"There is a huge threat to the economy right now, which could have a decisive impact on what fundraising looks like in the coming months, if not years," Thain said.
Using Reserve Funds
Jerry Hauser, CEO, of the Management Center, said nonprofits should look at the current market turmoil "as a one-time or short-lived event" and said nonprofits should avoid laying off staff or making other major structural changes under the assumption that a recession is imminent.
"It’s too soon to say we’re in for a long, rough road, and it’s too risky to erode your ability to deliver on needed programs," Hauser said.
And while Thain said nonprofits should look to pad their reserves, Hauser said now may be the right time to dip into them, for those nonprofits fortunate enough to have available funds in the bank. He suggested that while nonprofits may take a short-term fundraising hit, the current market turmoil could pass relatively quickly.
"This is a good time for organizations to consider using their reserves, something I’m usually very cautious about," Hauser said.
Sandi Clement McKinley, vice president for advisory services for the Nonprofit Finance Fund, agreed that the coming weeks and months may be a good time for nonprofits to consider dipping into reserves, if available, while making a commitment to restore those reserves later. That’s a conversation that should include the board of your nonprofit, she said.
She also urged nonprofits to focus on their core missions at a time like this and to shelve plans to expand into areas where they don’t currently have expertise or experience.
"Remember why you are here and who you are serving," McKinley said.
McKinley warned that the economy could suffer for an extended period even after the coronavirus threat wanes.
"Nonprofits and their funders should be considering the big picture of weathering an economic recession and taking action to make sure nonprofits survive and can ably serve their communities for an extended time," she said.
Kathryn Kennedy a partner at Cerity Partners, a financial advisory firm in Chicago, agreed that many donors are taking a wait-and-see approach to the impact of the coronavirus.
"People are trying to understand it and understand the government and big foundation responses," Kennedy said.
Kennedy said that despite the ongoing turmoil in the stock market, she expects charitable giving from wealthy donors to hold up: "These are people who have a dedicated commitment to being charitable and they will continue to give."