BKD Study: Nonprofit Leaders Reveal Difficult Impacts of COVID-19

A new survey of nonprofit organizations shows that many are under added pressure financially and operationally. BKD CPAs & Advisors recently released its 2021 State of the Nonprofit Sector report.

The report shows that a majority of nonprofits have increased their services, yet reduced staffing. The respondents have benefited from government funding, but question whether it’s sustainable. “We’ve been in a bubble,” the report quotes one nonprofit executive as saying. “Funding from the CARES Act has kept many of us afloat. But we know that those funds are going to run out. What then?”

2021 State of the Nonprofit Sector Report Findings

Key findings of the report show that nonprofits have experienced a dramatic shift in circumstances:

• 89% altered their delivery of programs and services.
• 70% experienced a decrease in net income.
• 61% experienced a decline in fees from programs and services.
• 29% plan to eliminate current programs and services.

The study also reveals that the pandemic’s effects have been heavily dependent on the focus of the organization. Arts, culture and humanities nonprofits took the brunt of the income decreases. More than 60% of these organizations experienced declines and about one-third decreased more than 50%.

In contrast, nonprofits with a focus in health or human services mostly saw increases in net revenue. More than 85% of these organizations reported revenue increases of 50% or more.

The 2021 State of the Nonprofit Sector report is available at no cost on the BKD website.

Background of the Study

Dan Prater led the development of the survey for BKD. “The goal of this study is to highlight how organizations are adapting to the pandemic and what effect it’s having on their ability to provide programs and services,” Prater said. “It’s that essential funders, elected officials and community leaders understand the current condition of nonprofit organizations as they consider the scale of necessary intervention.” Prater serves a senior managing consultant for the firm. He is a nationally recognized leader on nonprofit governance. He most recently spoke in Greater Des Moines (DSM) at the FuseDSM Nonprofit Forum on February 17, 2021.

BKD Partner Jessica Richter leads the firm’s Des Moines nonprofit practice. “The pandemic is a global event, but the impact is felt locally,” Richter said. “We intend for this report to provide insights that will help nonprofits stabilize and continue meeting the needs of the community. I’m happy to connect with Iowa organizations to discuss options for nonprofits.”

The survey was comprised of 18 questions or scenarios, including general questions about organization location, size, area of focus and questions about the COVID-19 crisis. BKD received responses from 319 organizations between September 23 and October 23, 2020.

You can count on The Partnership to continue to share accurate and fact-based updates. See more on COVID-19 here.