Arizona Nonprofits Report Losses Could Be $433 Million by Year’s End

Nonprofits across Arizona are reeling from the impact of the COVID-19 pandemic in real numbers, according to a survey by the Alliance of Arizona Nonprofits.

This week, the Alliance received 306 responses to its updated Covid-19 Nonprofit Impact Pulse Survey and is reporting 98% of responding organizations have been significantly impacted by the pandemic.  Of those impacted, 86% reported decreased revenue totaling and 76% indicate a disruption of services to clients and communities.

Total revenue loss reported thus far in Arizona is nearly $40 million.  The anticipated loss through the end of the organizations’ respective fiscal years is nearly $433 million.  These findings are current as of May 4.

One-quarter of respondents reported laying off or furloughing 1,962 employees as a result of the pandemic and nearly 60% (155 nonprofit organizations) applied for Paycheck Protection Program (PPP) loans totaling more than $37.7 million in relief funding. Of those applying for loans, 48% were approved, 45% are waiting for approval and 7% were denied funding at the time of the survey.

“This may only represent the tip of the iceberg,” said Alliance of Arizona Nonprofits CEO Kristen Merrifield.  “Having access to PPP and Economic Injury Disaster Loans will certainly help, and we’ve seen the incredible generosity of the community through the recent Arizona Gives Day event, which raised more than $6 million. The collaboration among grantmaking organizations have made more than $36 million available to nonprofits, but, unfortunately, we’re a long way from assessing the full impact.”

Merrifield said that adding to the challenge posed by the pandemic is that nonprofit organizations self-insuring for unemployment insurance are required to reimburse the state for one-half of the value of the temporary benefits provided through unemployment insurance claims. Arizona Autism United estimates that figure could be more than $300,000.

“We have requested that Governor Doug Ducey forgive the full amount of the unemployment insurance claims by applying Federal funds to cover those costs,” Merrifield said.

One additional impact of the pandemic is the loss of volunteers.  Nonprofits responding to the survey reported that number at 31,636. According to Independent Sector, a national organization that advocates for public policies impacting the charitable sector, volunteer hours are valued at $25.45 an hour. Figuring at least one hour of time per volunteer, the minimum value of the loss of donated hours is more than $800,000