A third of nonprofits expect to close within a year, survey finds

A third of nonprofits expect to close within a year, survey finds

Nearly a third of nonprofits say they may be forced to close their doors within the next twelve months as a result of the COVID-19 pandemic, a survey by the Charities Aid Foundation of America finds.

The third in a series of monthly surveys conducted since late March, The Voices of Charities Facing COVID-19 Worldwide Vol. 3 (12 pages, PDF) found that 7.5 percent of 414 respondents in 125 countries had already stopped operating. Of those still operating, about 32 percent said their nonprofit "could persevere under the current conditions" for between one and twelve months before being forced to shut down, while 32 percent did not know how long they could keep operating. Only 36 percent of respondents said their organization could sustain operations for "as long as needed." Of the nonprofits still operating, 28 percent were continuing to provide regular services and programs, 52 percent were providing limited services and programming, and 54 percent were providing new services and programs to address COVID-related needs. 

The survey also found that most funders were supporting grantees by offering more grant flexibility, including agreeing to grant extensions (47 percent), allowing funds to be redirected (39 percent) to other purposes, and providing funding for salaries, rent, utilities, and technology costs (32 percent), as well as funding to address urgent needs (39 percent). The type of funding respondents said they needed most was unrestricted funding (52 percent), followed by regular project funding (30 percent) and COVID-specific funding (15 percent), while operational costs for which they needed funding most urgently included salaries (70 percent), technology (32 percent), and office improvements needed to safely resume on-site operations (28 percent). And while 63 percent of respondents reported engaging in new fundraising activities over the previous two months, 68 percent raised less than half of their goal. 

"Charities around the world continue to voice their resilience, through our surveys," said CAF America president and CEO Ted Hart. "Charities working hard to serve their communities are working equally hard to keep their doors open. They are making urgent appeals for unrestricted funds, flexibility in the use of funding, and creativity in project funding. The next twelve months represent a critical window through which we may see as many as two-thirds of charities struggle to survive."

"The Voices of Charities Facing COVID-19 Worldwide Vol. 3." Charities Aid Foundation of America report 06/10/2020. "Third CAF America Survey Reflects Resilience of Global and Local Charitable Organizations Amid Pandemic." Charities Aid Foundation of America press release 06/10/2020.