The plan was to go all-out for the 100th anniversary of the Compass Housing Alliance, one of Seattle’s largest homeless shelter operators and low-income landlords.
The nonprofit rented the Museum of Flight, where it hoped to host 500 people. Plans were in the works for a video retrospective and perhaps a visit from veteran executive director Rick Friedhoff.
Then COVID-19 hit. The event was scheduled for Oct. 17; it has now been pushed to next year. There’s a possibility of a small event at the nonprofit’s offices, with fewer than a hundred people attending.
“We want to be sensitive that our tone is respectful and appropriate,” said Mary Steele, interim executive director of the alliance. “It’s supposed to be celebratory, (but) we don’t know what state our country will be in in October.”
As America has stepped away in the last half-century from funding public housing and mental institutions, taking care of people who are impoverished or living with severe mental illness has fallen more and more to charities and nonprofits, which rely on donations to pay for large chunks of their budgets.
Now, with COVID-19 eating away at nonprofits’ existing money, the future of events where they would normally raise money is unclear — as is the future of fundraising itself.
Last year, two of the Compass Housing Alliance’s events raised roughly half a million dollars; the organization’s entire budget is $16 million. Between that and a 20% loss in rent at their 700 or so apartments, the alliance is looking at a loss of between $50,000 and $100,000 a month until the economy improves.
They’re far from alone. A survey of 880 organizations in 122 countries by the Charities Aid Foundation of America this month found almost three-quarters of charities had seen a decline in contributions, and almost a third had furloughed or laid off employees. Half of the charities said they expected to see revenue decline by more than 20% over the next year.
But in Washington state, where charitable giving is high, COVID-19 has provided a wave of emergency donations from the community and philanthropies; Philanthropy Northwest estimates almost $67 million has been raised since early March, counting in-kind contributions, the majority of which went to nonprofits and community-based funds ($12.6 million went to medical research and academia, according to a spokesperson for Philanthropy Northwest).
But a slump in giving could be imminent; during the last recession, between 2008 and 2010, Philanthropy Northwest tracked a drop of around 20% of all philanthropic giving from 250 major funders in the Northwest United States, from Wyoming to Alaska.
And while philanthropy might be prepared to give more than after the last recession, the nonprofits most hard-hit will probably be smaller nonprofits serving specific communities, especially nonprofits run by and directed toward people of color, according to experts who study or work in philanthropic efforts.
‘We’re really in a pickle’
This recession is more sudden and severe in terms of how many people are unemployed. Emily Meltzer, development director for Building Changes, a nonprofit focused on strategies to end youth and family homelessness in Washington, says that makes the future unsure.
“We have seen a huge influx of funding at the get-go, but it’s a knee-jerk to crisis and it’s not sustainable,” Meltzer said. “What we’re seeing is that… COVID is going to extend far longer than we expected, so I’m not sure how philanthropy is going to plan for that.”
One report from The Better Fundraising Company estimates the drop in revenue will show in late summer and continue into the early fall.
At The Sophia Way, a women’s shelter in Bellevue whose budget most years is more than 50% donations, coronavirus has brought with it a price tag of more than $120,000 a month, according to executive director Alisa Chatinsky. In April, the shelter relocated to a hotel, where it now needs to keep staff around the clock and feed 100 women three meals a day.
But even with a swell in private donations and federal grants to help cover that, and local restaurants supplying food at cost, The Sophia Way is looking at a hole of half a million dollars — which could be a big problem for its future. And Chatinsky says she’s seeing signs already of donor fatigue.
In September, The Sophia Way plans to move into a new $9 million facility in Kirkland it said would be open 24/7. But in a recent interview, Chatinsky said the organization could be short this year of the funding needed to run a shelter all day and night.
“We’re really in a pickle,” Chatinsky said. “We’ve done a capital campaign… on the premise that we’re going to run the shelter 24/7. We told that to the county, we told that to the city, we told that to the funders.”
Nonprofits have adapted, fundraising largely online, in a shift that could spell long-term change. Big galas and fancy events with lots of overhead to pay off could be a thing of the past, Meltzer said.
“I think the events will look different. I think it will take a really long time for people to become comfortable being in a room with a thousand strangers,” Meltzer said. “If it’s successful and it can raise as much money anyway, there’s no reason to have an event with so much overhead.”
Large organizations with good connections might weather this storm better than smaller organizations that serve specific populations and communities, such as organizations led by and catering to people of color, according to Magan Do, grantmaking director for the Social Justice Fund Northwest, which works with and funds many community-based organizations in marginalized communities.
“After both the dot-com bubble and the ’08 recession, we saw a huge number of foundations pull out from a lot of the funding they were doing,” Do said. “We had to lay off a lot of our staff and rebuild for the last decade.”
In 2009, the fund was in such a bad position monetarily the board of directors considered closing it down. Since the recession, the fund and other nonprofits have shifted from family foundations and more toward individual giving — especially small monthly gifts. Last year about 75% of their funding came from individual donors, and the average gift size was $509.
But these smaller donors, which many homeless shelters rely on as well, might not be such a stable bet if the economy doesn’t recover quickly; one survey found one in five donors has already stopped giving, according to the Chronicle of Philanthropy.
A potential for even greater giving
But the outlook is unknown, not necessarily bleak. Experts in local philanthropy say this recession could be much different from the last, perhaps because of the growing wealth disparity in the country, according to Kiran Ahuja, CEO of Philanthropy Northwest.
Philanthropy Northwest recently conducted an informal survey of 23 private and corporate funders in Washington and found 70% of those said they were likely to invest more than they have been — between $10 million and $33 million.
“We have many more millionaires and billionaires, and there’s much more wealth out there,” Ahuja said. “So I think there’s more opportunity.”
“I think this is an incredibly generous city,” said Colleen Echohawk, executive director of the Chief Seattle Club, a Native-focused homeless service organization in downtown Seattle. “We have people who give sacrificially, who believe in supporting the most vulnerable in our population — so I’m believing in the goodness in our city.”
