Nonprofits in Nevada stabilize after tumultuous year, study finds

Nonprofits in Nevada say they have stabilized after a rocky year of finances, changes to operations and service delivery, according to a report from UNLV released this month.

“Nevada Nonprofits and COVID-19: One Year Later” surveyed 120 nonprofits in the Silver State and compared data from the Small Business Administration and the Internal Revenue Service to gain insight on what happened to nonprofits during the COVID-19 pandemic. It follows up an initial report from spring 2020, which surveyed 149 nonprofits and found a majority saw declining donations and struggled to keep services intact.

This year’s survey, conducted between February and March, found almost half of respondents could continue operating into the next year without additional support.

“The financial picture for many agencies seems to have stabilized but many are still facing significant reductions in staff and hours,” according to the report.

The long-term future, however, remains uncertain. Jessica Word, the study’s author and a professor of nonprofit management and public policy, said stimulus programs like the Paycheck Protection Program and state grants for nonprofits helped stabilize when traditional fundraising opportunities were impacted by the pandemic. The state’s next budget cycle will show how much funding will trickle down to the nonprofit sector.

“I think a lot of them are very nervous, having talked to some of them about the long-term picture,” Word said. “It’s unclear if they’re going to be able to return to fundraising normally. From when we did that survey, now we’re back to a mask mandate indoors. Obviously, we’re in a new surge as well. So while it’s definitely more stable than it was, I would say they probably don’t feel secure.”

Nationwide, 1.64 million nonprofit sector jobs were lost because of the pandemic, according to the report. It estimates that it will take 16 months for employment to reach pre-pandemic levels.

In surveying Nevada nonprofits, the report found that while about three in four nonprofits said they hadn’t laid off staff, both in 2020 and 2021, partial layoffs increased from 16.2 percent to 22 percent. But no organizations said they intended to lay off in the near future, suggesting that organizations saw improvements or a stable financial situation in the near term.

Some of this could be attributed to the use of PPP loans. Nonprofits reported initial challenges with receiving such loans because of the influx of applicants last year, as well as delays from not having existing relationships with lenders or the Small Business Administration, according to the report.

Ultimately, 1,049 nonprofits received $234.1 million to support payroll and operations. Almost a third of organizations received first- and second-round loans. The average loan was $223,214, according to the report, though the 10 largest nonprofit loans were above $2.9 million.

“A lot of them were eventually able to get PPP loans,” Word said. “They provided a real lifeline for them in terms of operational costs especially since their fundraising had been severely impacted, at least initially. That kept them going because not having lines of credit, most nonprofits, if they run out of cash, they end up closing.”

Researchers found that nonprofits were less aware of other federal stimulus programs, such as economic injury disaster loans, employee retention credits and increased tax incentives for charitable giving.

Future concerns focused on the ability to safely operate, followed by loss of revenue and declining donations, Nevada nonprofits said in the survey. In 2020, respondents were most concerned about losses in revenue and donations.

“This demonstrates that even though many organizations have adapted and become accustomed to safety protocols, they are still concerned about safety particularly as restrictions ease,” according to the report.

McKenna Ross is a corps member with Report for America, a national service program that places journalists into local newsrooms. Contact her at mross@reviewjournal.com. Follow @mckenna_ross on Twitter.