1-Year Later: Arizona Nonprofits Assess Impact of Pandemic; $91M in Losses, 52% Decrease in Year-End Funding

An Alliance of Arizona Nonprofits survey showed the devastating impact of the coronavirus pandemic with more than 400 Arizona nonprofits reporting a total revenue loss of more than $91 million, a 52% drop in year-end giving and an increase of over $15 million in expenses primarily for PPE, supplies and technology.

The survey, distributed in late February to both Alliance members and nonmembers, showed that 412 responding nonprofits either laid off or furloughed 2,098 employees and experienced a loss of 73,411 volunteers, or nearly 80% of the total number of those giving their time prior to the pandemic.

The average Arizona nonprofit lost between 26% and 50% of total revenue with losses ranging from a few hundred dollars to $5 million and laid off between 26% and 50% of their staff with just over half, or 56%, having refilled a total of 414 positions. On the positive side, fewer than 1% of Arizona nonprofits stopped providing services completely.

The full report can be viewed here.

“The findings of the survey were only surprising in terms of the magnitude of the losses, as we know that the capacity of nonprofits across the state has been crushed due to the impact of this pandemic,” said Alliance of Arizona Nonprofits CEO Kristen Merrifield. “The good news is that most Arizona nonprofits have proven to be nimble and have adapted as necessary by strategically building alliances with other organizations, changing programs either to 100 percent virtual or adjusting for social distancing, and rethinking the ways they have worked in the past. That being said, it’s clear that organizations will need further assistance to get through the end of the pandemic and that’s what makes this year’s Arizona Gives Day on April 6 so vital.”

Early giving has begun for the ninth annual fund raiser that last year generated a record-setting $6.1 million. More than 1,000 Arizona nonprofits have already registered for Arizona Gives Day, presented by FirstBank in collaboration with the Alliance and Arizona Grantmakers Forum.

When responding to a survey question asking what would be needed to stay afloat, 81% indicated unrestricted funding was a factor they hoped would continue post-pandemic.  Forty-four percent said they planned to maintain some level of virtual presence either in their programs or for their workers.

Other outcomes from the survey:

• Arts and culture organizations suffered the largest average revenue loss at nearly $800,000. Health and human services lost an average of nearly $600,000; animal welfare and environment lost just over $200,000 on average and education and youth-serving agencies lost just over $300,000 on average.
• 49% were holding off on hiring activities while 22% increased hiring or added positions due to COVID-19, filling positions that were overwhelmingly programmatic in nature.
• 39% have restarted in-person volunteer opportunities while 14% never stopped. 79% are not back to pre-COVID volunteer numbers.
• 74% of responding nonprofits closed their physical location at some level with closure time ranging from 1-to-3 month to 43% that remain closed.
• 54% indicated they were considering moving towards a hybrid-remote/in-person plan.

Merrifield said that many nonprofits had hoped to recoup some of the lost revenue through year-end giving which, in normal years, generates 31% of annual giving. On average, through the pandemic, 52% of nonprofits saw a decrease in year-end giving, down between 11% and 25% from the previous year.

“With the distribution of vaccines increasing across the state and the pandemic numbers showing some decline, we remain hopeful that the state’s nonprofit community will be able to return to pre-COVID programming and services,” Merrifield said. “But, we must remain vigilant in our efforts to stay safe.”

The Alliance of Arizona Nonprofits is a statewide trusted resource and advocate for the nonprofit community. The Alliance’s mission is to unite, strengthen and advance Arizona’s nonprofit sector and is comprised of more than 1,000 members – both nonprofits and those in the community who support them – across the state. Since 2004, the organization has been dedicated to furthering the common interests of Arizona’s nonprofit community and envisions an Arizona where all nonprofits are valued, empowered and thriving, with support from grassroots efforts like Arizona Gives Day.