3 Phases of Nonprofit Needs: What to Expect

As the scale of the crisis nonprofits face becomes apparent, the need can be paralyzing. Recognizing that there are three distinct funding needs can help grant makers take action:

• Response — emergency funding that keeps an organization going for the next month or allows it to serve immediate needs now.

• Recovery — funding to cover enough of lost revenue to put an organization back in the position to serve its mission and respond to evolving community need and opportunity.

• Resilience — funding that enables an organization to build larger operating reserves as well as mutual understanding and trust with funders about what it takes to serve the mission over time.

Response funding is crucial. And urgent. Grant makers are channeling awards to organizations directly involved in public-health mobilization and others that support families suffering immediate economic threats. It’s not surprising that “response” is in the name of more than half of the 24 funds tracked by GivingCompass. But the response must now expand. Social distancing creates an economic crisis as calamitous and unexpected as a natural disaster for organizations not directly involved in front-line public-health-related work. Without immediate grant support, many will not survive.

Recovery funding will need to follow. Response funding alone will not put organizations in position to recover fully. They will need grants that make up enough of what was lost so they can regain momentum. And concessionary loans can help, too, when they cover expenses for funding that was delayed but not lost (e.g., the proceeds from a gala delayed from March to November). Private donors can demonstrate the power and necessity of recovery funding, but we will also need to mobilize government support.

Resilience may feel like a luxury, but this will not be the last crisis. What can we do now so next time we don’t need to muster emergency responses to save fragile organizations and shore up gains in community progress? Many organizations — especially those led by and serving communities of color who have historically been denied access to community wealth and connections — need the opportunity to build reserves for resilience and autonomy. They will need to have the power to command payments that cover their full costs. For now, grant makers can make response and recovery grants and investments in a spirit of trust and empathy that will create the conditions for more resilient relationships and results in the future.

If intense social distancing lasts months, not weeks, many nonprofits will not survive. No single entity can save everyone. That can be paralyzing. But grant makers can step in now to help a significant number of organizations respond in a way that keeps them afloat, sets more of them up to recover quickly, and builds resilience for the next emergency. Action now can also create channels through which much more government money can later flow for greater impact.