Pandemic could close 60 charities
About 60 charities could be forced to shut their doors in the wake of the Covid-19 pandemic.
The grim warning came after a study showed that more than half did not meet their fundraising goals last year — and that 42 per cent of non-profits started this year with only three months of cash for operations in the bank.
The news came in a survey of 83 charities by Wavecrest, a charity advisory group, with the Association of Fundraising Professionals.
Jennifer Burland Adams, of Wavecrest, said: “Recent data from the Co-ordinated Crisis Response Effort showed that six weeks ago 38 non-profits had three months or less and a further 23 had six months or less.
“This means that without significant increases in funding, 61 non-profits could have to close before the year is out.”
She said the loss of charities would have a “huge impact” on the island at a time when a safety net was needed more than ever.
Ms Burland said: “The most vulnerable among us would be the first impacted because some of those non-profits are in the health and social services categories.
“Beyond those that are our emergency response for vulnerable persons, there are charities that are essential for a happy, healthy, vital Bermuda.
“They are not the ones we rely on for feeding the homeless, but they provide programming for youth, they protect our environment and preserve our arts and heritage.”
Ms Adams said that the charities surveyed took in almost $40 million in donations last year, including $14.6 million from firms and foundations, $6.5 million from individuals and $4 million from government grants.
The total also included $4.4 million of income from events and $9.7 million from sources such as thrift shops, educational camps and fees for services.
But Ms Adams predicted the coronavirus crisis will cut many sources of cash.
She said: “We know the Government is cutting grants. We know that traditional fundraising events will not be able to be held for the foreseeable future.
“Some fee-for-service can be done electronically, but thrift stores, event rentals, camps that offer educational opportunities and other revenue sources in that ‘other’ category are at risk.
“Those sources — the grants, the events and the ‘other’ — make up a huge percentage of fundraising — about 36 per cent.”
She added that many companies had donated funds for Covid-19 relief and the Emergency Fund and that the amount of donor dollars was not unlimited.
Ms Adams said: “What they have done is amazing and I know a lot of companies have been creative and looking at their entertainment and travel budgets which have not been used up.
“But others have started to communicate with non-profits and saying they have given a lot to the emergency response and they don’t think they can give entirely, or at the same level, as they were before.”
Charities are also faced with potential problems in the recruitment of volunteers.
Ms Adams said that 4,461 people volunteered more than 132,000 hours of their time last year and half were seniors or classified as “vulnerable” to Covid-19.
She added: “If volunteers do not feel safe about returning to their non-profit, almost 78,000 hours are at risk.
“The cost to replace those volunteer hours would be just over $2.8 million.”
Ms Adams added that 29 per cent of non-profits made employees redundant or introduced hiring freezes last year.
Many charities have also laid off staff and reduced salaries to help cut costs.
She said: “If this continues, the ability of non-profits to provide services to our most vulnerable is at risk, especially if they are unable to augment their staff with volunteers.”
Ms Adams added that better communication could assist charities and that those that had been open with donors and clients would be in a better position than others.
She said that donors could also help by bringing their donations schedules forward and pledging to make future donations so charities could manage their forecasts.
Ms Adams hoped the Government recognised the good work charities did and would act to protect the sector.
She said: “There are going to be people who need these support services more than ever.
“It’s something that will really tie in to the economic recovery of the island as a whole. The non-profits have to be at that table because of all that they provide.”
AFP Bermuda has organised weekly meetings for fundraisers, development staff and executive directors during the crisis with 25 charities taking part.
Wavecrest has joined forces with experts on island and overseas to present webinars to help charities cope with the crisis.
Topics of the webinars included how to reduce expenses, forecast cashflow, the importance of communication with donors and the worth of collaborations and mergers.
The webinars are available atwavecrest.bm/webinars.
An online presentation and analysis of the data will take place on Tuesday at 9am with a special session for non-profits and their boards at 3pm.
• For details, e-mail email@example.com
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