Arizona Nonprofits Projecting Difficult Futures Without Additional Federal Support during Pandemic

60% Projecting Net Operating Losses; 64% Could Operate for Less than 12 Months Amid Declining or Stagnant Revenue

Alliance of Arizona Nonprofits

The impact of the COVID-19 pandemic continues to create major challenges for Arizona nonprofits both financially and operationally according to the latest Alliance of Arizona Nonprofits Pulse Poll.

The poll, conducted from Sept. 23 to Oct. 6, generated more than 200 responses from nonprofit organizations serving communities across Arizona.

Among the outcomes:

  • Without additional Paycheck Protection Program (PPP) loans or COVID-related emergency funding grants, 60.99% of respondents are projecting net operating losses of between 10 and 50 percent, with 30.77% percent in the 10-20 percent range.
  • 64.48% of responding organizations would be able to continue operations for between 1 and 12 months if revenues continue to decline or remain stagnant. 34.43% could operate for more than 12 months.
  • The good news is that 51.91% of respondents indicated that it is “highly unlikely” they would close permanently during the next fiscal year if funding does not improve in 2021. 38.18% said it is “highly likely,” “somewhat likely,” or “somewhat unlikely” that closure in the next 12 months is a reality.
  • 51.65% of respondents would apply if another round of PPP loans were made available, although 31.32% said they did not receive loans in the first round.
  • Job losses among responding organizations topped 1,400.

In answering the question “What could another round of PPP Loans mean for your organization?”

  • 50% would not have to dip into or continue to deplete reserves or savings,
  • 35% would not have to reduce programs and services to the community,
  • 29.44% would not have to reduce hours or wages and
  • 22.78% would not have additional employee furloughs or layoffs.

During the pandemic, 41.28% of responding organizations have furloughed both part-time and full-time employees, cut staff hours and reduced salaries and wages. In terms of job losses, the health and human services sector reported the biggest impact followed by arts and culture and education/youth development.

“Not unexpectedly, the nonprofit sector continues to experience significant fallout from the COVID pandemic which we truly hope Congress will be able to address with another round of financial support,” said Alliance of Arizona Nonprofits CEO Kristen Merrifield.  “What we do know is that this is an incredibly resilient and creative sector that never loses sight of their individual and collective missions to serve their communities.”

To that end, 84.53% of respondents changed, expanded or revised their methods of service delivery, much of it reverting to online or virtual assistance where appropriate and possible.

When asked what are the greatest needs through the end of the calendar year, more than 51.76% need cash flow to meet operational needs due to lost revenue, 43.53% reported the need to effectively and safely manage a return to in-person work and service delivery and 60.59% need help to navigate additional funding resources from philanthropic sources.

“To say we are at a critical point is an understatement,” Merrifield said.  “We need Congress to step up.”

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