Leaders Argue That Nonprofits Need Government Aid

By many accounts, donors responded quickly to the coronavirus outbreak. Scores of rapid-response funds have been springing up, with wealthy donors, foundations, and everyday Americans stepping up their giving.

Foundation giving stands at $2 billion worldwide and climbing.

The generosity will likely continue over the next two or three months, says Brian Gallagher, chief executive of United Way Worldwide. But don’t expect this outpouring of generosity to last for the long term, says Gallagher, who has been a nonprofit leader through decades of economic ups and downs.

Private giving, say Gallagher and other nonprofit leaders, can’t possibly make up for the huge increases in demand expected.

Nonprofit leaders say the $2 trillion stimulus law enacted March 27 contains important benefits for nonprofits, but it’s not nearly enough.

They are pushing a bill that would provide $60 billion in direct aid to nonprofits to help them ride out the crisis.

Goodwill Industries International CEO Steve Preston expects near-term demands for things like food and shelter to spike as service-industry workers and other low-wage workers lose their jobs.

That will be followed by different but equally daunting demands, Preston says.

“We’re also going to need to help people get back on their feet so they can get jobs and take care of themselves,” he says.

Preston served as secretary of the Department of Housing and Urban Development during the financial crisis of 2008. As bad as it was, that crisis was largely confined to the housing and financial industries, he says.

In contrast, the coronavirus crisis is hobbling nearly every part of the economy. “The economic impact is much more widespread, immediately,” he says.

“I don’t think any level of philanthropic giving is going to fix this problem over the next 90 days,” Preston says. “It needs to be a much bigger response. Nobody’s seen anything like this before.”

Small Nonprofits Could Collapse

Preston expresses worries about his own organization’s future. Many of its retail stores have had to close, and $4.5 billion of the nonprofit’s $6 billion in annual revenue comes from store sales. The charity employs 131,000 people, many with special needs.

Rick Cohen, spokesman for the National Council of Nonprofits, agrees the damage will be lasting and widespread.

“It will hit all nonprofits, regardless of mission, regardless of geography,” Cohen says. “The effects are going to vary, but this is something that is going to touch every nonprofit in the country in some way or another.”

After years of stagnating and even declining income for many Americans, Gallagher says that a big question for the nonprofit world is whether the current crisis helps get society back in a mood to give regularly.

“We’ve lost that ethos in our country,” Gallagher says. “We’ve lost our sense of community. We’ve lost our trust in institutions.”

Most at risk if private giving doesn’t rebound, he says: small nonprofits. “If you’re really small, you’re really fighting for survival,” Gallagher says. “If you’ve got a development staff of one, it’s just hard.”

Gallagher says the coronavirus crisis is like “a slow-moving hurricane hitting every country in the world simultaneously.”