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Memphis News & Weather | Memphis, TN | WATN - localmemphis.com

Local nonprofits report $32 million in losses due to COVID-19

Nearly 300 local nonprofit organizations took a survey on the impact of the COVID-19 pandemic which accounted for $32 million in lost funding.

MEMPHIS, Tenn — Mid-South nonprofits are in jeopardy of losing a lot of funding during the COVID-19 pandemic. Many have already reported losing money.

Momentum Nonprofit Partners, located in Cooper-Young, surveyed 300 local nonprofit organizations about the impact of COVID-19. According to the results, nonprofits reported losing $32 million within the first weeks of the crisis.

"We're going to see a lot of nonprofits struggling in 2020. We're going to see a lot of nonprofits potentially asking the question if they can stay open or not," Momentum Nonprofit Partners Executive Director Kevin Dean said.

Momentum Nonprofit Partners is a free resource hub for nonprofit organizations.

Based on feedback, two big contributing factors of the losses were less donations coming in and canceled fundraising events.

"In the nonprofit world, we rely on special events to earn income and also bring in new donors and we had to cancel all of those events. Every non-profit had to cancel their events coming up and this is event season," Dean explains.

ARTSMemphis, which supports around 70 arts organizations and artists from the Brooks Museum to the Hattiloo Theatre, had to postpone its largest fundraising event of the year, Art by Design, until August. It was originally scheduled to happen in late-March.

"We felt like it was really the best decision and of course now, looking back, it was the only decision we could have made," ARTSMemphis President and CEO Elizabeth Rouse said. "It was not an easy one because it means we have lost some of the revenue that we would have typically gotten in the month of April to support arts groups and artists."

ARTSMemphis did its own survey with its organization and projects nearly $7.5 million in losses.

"Right now we are working with them as they navigate their own business challenges and figure out how they may operate when it's safe to do so," Rouse said. "So many of them are focused on what their summer programs might look like, what their fall seasons might look like."

Each week, Momentum hosts a meeting for nonprofits to provide resources and new information to help.

With the City of Memphis, Shelby Co. Government, United Way and the Community Foundation, they helped created the Mid-South COVID-19 Regional Response Fund that immediately benefits nonprofits for "relief, recovery and resiliency" efforts.

Initially, $1.5 million dollars was raised. Dean said approximately $1 million has already been distributed.

"There's increased demand for services but also there's increased demand individually for non-profit workers right now so there's a lot of heroes out there in the nonprofit sector," he said.

ARTSMemphis was also one of the benefactors of the COVID-19 relief fund and said it's using the gift to create a relief fund for artists and performers who have lost their income due to COVID-19. The first recipients of grants are expected to be announced this week.

Momentum's executive director said they're trying to provide the best advice and resources they can in these uncharted water.

"If you have a reserved fund, if you have a rainy day fund, don't lay off your staff yet," Dean said. Apply for SBA loans and see what happens just because we don't want to start furloughing too many nonprofit workers right now because that can hurt our community."

Under the CARES Act, a new Emergency Small Business Loan program was created that nonprofits qualify for.

Dean said the loans will likely only be helpful in the immediate term but not long-term.

"Even if things reopen soon, we're not done," Dean said. "We're not done with this for the rest of the year and that's pretty scary."

To keep going, Dean said nonprofits will have to increase collaboration and restructuring of services may be needed. It will also take people who are willing and able to donate.

The CARES Act also allows up to a $300 tax deduction for charitable gifts this year.

To join the Momentum Nonprofit Partners network for free to receive help and resources, click here.