The pandemic has left most, if not all, of us wondering about the future of many things – restaurants, retail stores, schools, real estate, churches, etc., and the list goes on. But have we given much thought to the future of the nonprofit organizations to which we donate?
Philanthropy is not just giving money to organizations in need of support. We are making an investment in the mission and work of the cause we are helping. And believe me, many charitable organizations are in great need of investments now.
The economic carnage brought on by the pandemic has created some truly scary thoughts. According to Alan Tyson, in the January 12th NonProfit Pro newsletter, 75% of agencies have seen declining contributions, 50% have less than three months of operating revenue, 20% have less than one month of operating revenue, and one-third of nonprofits could be out of business in the next couple of years (Washington Post).
So, how do we know that our “investment” isn’t going to shut their doors shortly after receiving our cash? The answer is — we don’t know. But that should not stop us from continuing to be philanthropic and supporting the causes that mean something significant to us. What it does mean is that we should do our homework and ask questions of those agencies. After all, philanthropy should be about “impact investing” in the causes we support, and we need to know how our “impact” is working . As a donor, you certainly have a right to talk with the leadership of organizations and ask some important questions:
- Do they have a cash reserve
- How are they planning for both the near term and long term
- What are their sources of revenue – earned income, grants, government support, donors
- Does much of their support come from a single source
- What are they worried about now
There is no doubt that charities need our support more than ever before. So, don’t stop being philanthropic. The sky isn’t falling, even though on some days it might seem like it is. But do be cautious and thoughtful. It might just be that your donation helps keep the doors open. You can be the solution. Please continue to be as philanthropic as possible. Your donation can make the impact charities need. Don’t be a chicken little.
Gregg E. Muenster, PhD
Senior Philanthropic Advisor, Sendero Family Enterprise