Pivoting, pushing and praying: Nonprofits face an uncertain winter

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For 50,000-plus nonprofit organizations in Michigan — nearly 4,000 in Ingham County alone — the year 2020 has been challenging in the extreme.

Nonprofits help weave the social safety net and embroider it with arts and culture. They provide basic human needs like food, housing and health care and feed the soul with music, drama and visual arts.

This spring, many nonprofits were slammed with unprecedented demand for services even as traditional fundraising tools disappeared and overstretched donors were pressed from all sides. Some nonprofits, especially in the arts, lost nearly all of their event-driven revenues from concerts, festivals and ticket sales.

All of them had to pivot fast to deliver vital services in new ways. Benfactors large and small came through with record donations. But winter is on the way and survival is far from assured. By tradition, late fall and the holiday season is the prime fundraising period for most nonprofits. Seeing no sign yet of a second round of federal COVID relief, nonprofit leaders are stretching every penny and hoping donors will continue to give.

Hot dogs and sanitizer

Carmen Turner, director of the Lansing Boys and Girls Club, sounded overwhelmed but not overcome by the trials of 2020.

“I don’t like humdrum,” she said.

The Boys and Girls Club is a case study in adaptation, pandemic style. Tuesday morning, about 50 kids from kindergarten to 12th grade studied quietly at socially distanced work stations dispersed throughout the club’s old-school headquarters on Lansing’s south side.

In normal times, the building can hold up to 300 kids.

In the parking lot, a beloved chef known to all as “Granny” took advantage of 70-degree weather in November to grill hot dogs for one of two meals that are brought to each student’s station daily.

Turner spent years as a single parent and knew that the Lansing School District’s shift to virtual schooling would put some working parents into a serious bind. In late August, she called Lansing School deputy superintendent Delsa Chapman and set up daytime learning labs for up to 75 Lansing kids whose parents needed to focus on work at home.

The staff had to break with its usual program schedules and roll with the school district’s.

“It’s a production,” Turner admitted. Despite some ongoing glitches with WiFi — soon to be fixed with new equipment — things are going well.

“It’s all about being able to switch up on a dime, period,” Turner said.

The club resumed its summer schedule July 6, with strict distancing guidelines and regular deep cleanings. A board member who owns a cleaning service chipped in with an ionized water system that sanitizes surfaces in seconds.

Thanks to a donation from Jackson National Life Insurance Co., an in-house social worker joined the staff to help meet the kids’ needs and connect parents, teachers and students — a long-sought goal made more urgent by the pandemic.

Some of Turner’s staff at the Boys and Girls Club of Lansing also work or volunteer at Impression 5 Science Museum and work together to develop science classes.

“The nonprofits have come together for real during this time, to see how we can help each other,” Turner said. “It’s really brought us together for the main purpose of making sure as many kids as possible do not fall through the cracks.”

Making the pivot

If you’re a nonprofit, what you’re going through this year depends largely on what services you offer and how you are funded.

Kelley Kuhn, vice president of the Michigan Nonprofit Association, offered a mixed report.

“Some are facing challenges and some are doing well,” Kuhn said. “The secret to their success is the ability to make the pivot and be creative, and we’re seeing that across the state.”

Kuhn credited the federal PPP program with helping nonprofits make it through 2020’s bleakest months, but individual donors are still the biggest income source for most nonprofits.

Laurie Baumer, vice president of the Capital Region Community Foundation, reported that until now, most nonprofits have done a good job of sustaining themselves and maintaining their services, or transitioning to virtual services.

“So far, we haven’t lost any in the tri-county area, that we’re aware of,” Baumer said.

This summer, the Community Foundation set up a $1 million COVID-19 nonprofit support fund. The foundation board is nursing the fund along carefully; only half has been distributed so far. Baumer expects the need to sharpen as winter looms.

(Prospective donors are invited to contact the foundation at www.ourcommunity.org.)

A Community Foundation COVID grant helped Turner’s staff at the Boys and Girls Club make the pandemic pivot.

“They have really stepped up and gone above and beyond,” Turner said.

Baumer and her staff don’t wait for cries for help. They regularly call area nonprofits, ask what they need and offer coaching on how to stay afloat.

“Part of it is just getting nonprofits comfortable with asking their donors,” Baumer said. “Many of them rely on fundraising events, not asking, and this is no time to be shy.”

Everybody is tired of virtual everything — fundraising included — but nonprofit leaders have seen little sign of donor fatigue yet.

“It’s all about relationships,” Turner said. “You can’t start them now. Your relationships show up in a hard time.”

In the first half of 2020, charitable giving was up 7.5 percent over the same period in 2019, according to the Association of Fundraising Professionals, an advocacy group. Most donor growth came in gifts of $250 or less, a crucial donor segment for nonprofits that serve basic human needs.

Food and shelter

Some nonprofits don’t have the luxury of scaling back services. Michelle Lantz, CEO of the Greater Lansing Food Bank, said the nationwide hunger rate — the number of people and families who experience “food insecurity” — has spiked by 30% to 50% nationwide since the start of the pandemic. The rate is up by about 30% in the seven-county area served by the food bank.

At the same time, food has gotten more expensive, up to 25 percent for some items like beef.

So far, donors have been “more generous than usual,” Lantz said. The food bank is a central warehouse and distribution center for food that is distributed by about 150 pantries and other local agencies.

“People respond to things that are very tangible, like feeding hungry neighbors,” Lantz said. In its 40 years, the food bank has built up a solid donor base, with thousands of smaller donors and a reliable phalanx of corporate partners.

Rawley van Fossen, director of the Capital Area Housing Partnership, said calls for help from new and old clients quadrupled when the pandemic hit in March and April.

The organization provides a range of housing-related services in Ingham, Clinton, Eaton and Shiawassee counties, including expert counseling for homeowners facing foreclosure and renters facing eviction.

Van Fossen and his staff had to make its services more accessible while closing its offices to in-person traffic.

A drastic and sudden spike in virtual consultations, with staffers working from home, didn’t come without “internal struggles, specifically over technology,” Van Fossen said.

The duct-tape and hand-me-down budget of many nonprofits didn’t cut it when they had to set up a high-volume virtual network almost overnight.

“Nonprofits aren’t always at the forefront of the newest and best technology, whether it’s laptops, cell phones and what have you,” Van Fossen said. “A lot of the time, we’re living five or 10 years in the past, compared to a company like Google or Facebook.”

Working with a third party “Geek squad,” it cost the housing partnership over $2,300 per employee to convert from land lines to cell phones, hard drives to laptops, buy the needed software and do it all as fast as possible. A Community Foundation COVID grant covered the transition costs for two of Van Fossen’s nine employees; the rest had to come from reserve accounts.

Van Fossen praised his board of directors for managing the organization’s funds wisely in recent years, but said COVID had put a “definite strain” on the budget. Dart Bank helped get an early and timely approval for eight weeks of PPP money.

“We had to re-create all of our programs in a week’s notice, because the need was there, from the start,” Van Fossen said. “People were getting laid off; mortgage bills were coming in; utility bills were coming due.”

Brian Philson, director of the nonprofit Highfields Inc., faced the same obstacles to providing a range of services in counseling and education to a 13-county swath of mid-Michigan.

Philson said it was a chance to “make lemonade out of lemons.”

Zoom meetings have replaced face-to-face coffees and lunches.  Philson clumps donors who know each other into a virtual coffee hour.

“There’s this camaraderie of, ‘what kind of bagel are you eating?’” Philson said.

This year’s Thanksgiving and Christmas fundraising events will go virtual. Students will read their Thanksgiving essays on line and donors can peruse them at their leisure.

A mid-October Strengthening Families Fundraising Breakfast, Highfield’s biggest fundraiser of the year, topped its goal of raising $100,000 despite going virtual — or maybe because of it. It costs a lot to feed in-person crowds of potential donors.

“Expenses were dramatically lower,” Philson said.

And he got some unexpectedly positive feedback from older donors.

“They consistently tell me, ‘I’m 82, I don’t want to get up, get dressed and try to make it to the Kellogg Center by 7:45,” Philson said. “I’d love to sit in my bathrobe, have a cup of coffee and watch it on line.’” When in-person fundraisers return, Philson plans on keeping the virtual option. This year, Philson said, only one of his 25 or so major donors declined to give.

Arts on a tightrope

Arts organizations, especially those that rely on ticket sales, have been hit extra hard by the pandemic.

“Human services nonprofits is where a lot of the donors have invested this year,” the Food Bank’s Michelle Lantz said. “Food, shelter, help with rent or utilities — the basics — those are areas where donors are really willing to give.”

Statewide, Kuhn said she’s seen a lot of foundation support for the arts this year.

“Since many arts organizations closed their doors, I’ve seen lasting support, second and third waves of funding,” Kuhn said.

Barb Whitney, director of the Lansing Art Gallery, has found that “in the nonprofit arena, emergency funding often is produced quickly, in response to serious issues.”

But she also pointed out that the percentage of applicants that get funding (the rate of return) is dramatically lower under crisis conditions. Often, out of thousands of applicants, a tiny percentage is funded.

Moving more art into the open air in projects like ArtPath along the River Trail, and opening an online gallery store, launched last week, are only two parts of 2020’s big pivot for Whitney and her staff.

“For the first time in my lifetime, it’s beneficial to us that we don’t have a significant amount of earned revenue related to ticket sales,” he said. (Admission to the gallery is free.) “That’s a model that’s been incredibly difficult for other organizations to change.”

Meghan Martin, director of the Arts Council of Greater Lansing, has been checking in with member organizations every day since March.

“Performing arts have been hit the most,” Martin said. “Not being able to gather, be in enclosed spaces, is a massive hit, but they’re trying to be as creative as possible.”

Nationwide, arts organizations have lost over $14 billion in earned revenue so far this year.

Local arts organizations have soldiered on, with outdoor performances like the Artists’ Umbrella drive-through show in the North Capitol parking lot, parking lot performances at Riverwalk Theatre and outdoor chamber concerts by the Lansing Symphony, featuring a handful of masked musicians. Online concerts, plays, gallery art walk-throughs and other virtual events have exploded.

“They may not be able to grab those revenues from ticket sales, but in some cases, they’ve reinvented themselves,” Kuhn said. “What they’ve done to deliver arts and culture to the public will live on past the pandemic.”

No one supposes that a handful of socially distanced performances or outdoor exhibits will generate the earned revenue of a full-on, live season, but they also send a crucial signal.

“It’s a matter of putting programming out there so people can see that your organization is still viable and still critical for this area,” Martin said.

More than ever, ongoing donor relationships are a lifeline.

“You have to plan performances and shows in advance. You can’t gamble thousands of dollars on the chance we’re let out of quarantine,” Martin said. “Advocacy will be crucial in the coming months.”

Into the unknown

At the east side’s Allen Neighborhood Center, where socially distanced, food-based programs like a weekly outdoor farmers market and “veggie box” curbside delivery have flourished during the pandemic, the winter promises fresh challenges.

To help make ends meet, the center rents out its spacious “great room” and conference rooms for parties, galas, charrettes, meetings and other events.

Back in March, the rooms were booked solid with reservations, from wedding season in spring through fall graduations and beyond.

Every single event was cancelled. Rentals probably won’t resume until next year.

“Now I’m worried,” director Joan Nelson admitted. “I kept thinking we needed to hang on until fall, but we’re all beginning to realize that this will go on very likely through the bulk of next year. I’m keeping my fingers crossed that another PPP is coming.”

After all of the generous donor support and quick-thinking operational acrobatics of 2020, the nonprofit outlook for winter and beyond is far from certain.

“Unfortunately, the worst may be yet to come for nonprofits,” Baumer said.

No one knows whether traditional late-year fundraising drives and the spirit of holiday giving will offset looming spikes in COVID cases, further restrictions and lockdowns and emptying reserve funds. Dec. 1, the Tuesday after Thanksgiving, will be the eighth annual Giving Tuesday, a global day of charity and philanthropy that raised $511 million in the United States in 2019.

Kuhn hopes that large and small donors will surpass that figure this year and help the state’s nonprofits weather the uncertain times ahead.

Lantz of the Food Bank hasn’t seen much evidence of donor fatigue, but she’s braced for a spike in need, beginning in the holiday season and lasting through the winter.

“It’s a critical time where we need more donations to meet the demand,” she said. The Food Bank also needs volunteers to pack up and distribute food. (Volunteers can go to the Food Bank’s web site to find out more.)

Because of the Food Bank’s bulk purchasing power, help is most welcome in the form of money donations rather than food.

“We can take a dollar and turn it into about three meals,” Lantz said.

The Food Bank also needs volunteers to pack up and distribute food. (Volunteers can go to the Food Bank’s website to find out more.)

Nonprofit leaders also urge potential volunteers to consider stepping up, in safe and distanced ways, to support their favorite nonprofits.

To face the long-term challenge, Nelson’s team at the Allen Neighborhood Center is stepping up a three-year-old program called Lansing Eastside Giving Society, or LEGS, in which donors pledge to give between $1,000 and $10,000 for three years. A new project, Sustaining Neighbors, is designed to tap community members who value the Allen Neighborhood’s range of services, but can’t cough up the big bucks. Mailers just went out, soliciting small deductions of $10 a month or more a month from a wider net of small donors.

For eight challenging months, nonprofit leaders like Capital Area Housing Partnership’s Rawley Van Fossen have stayed hopeful, floating one innovative idea after another and beating the virtual bushes for old and new donors.

But it’s impossible to plan confidently for the unknown.

“A lot of things worry me,” Van Fossen said. “To keep our programs active, keep our people employed, keep our lights on, it’s not just one grant or project or source that makes it work. That’s where fundraising is key.”

This year, the organization planned a massive block party and barbecue showcasing four new homes, its biggest fundraiser of the year.  When the event was canceled, $50,000 in expected fundraising evaporated and the 2019-2020 fiscal year ended in the red.

“Now we’re still living in COVID, living in uncertainty, and I’m not even trying to make up the difference from last year,” Van Fossen said. “I’m just trying to sustain the current budgeted amount without projecting yet another loss. What does the future hold for eviction, for foreclosure, for utility and household bills? That’s the moment we’re living in now.”

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