Nonprofits throughout Texas face financial, staffing and resource difficulties, and according to new research they also face discrete regional challenges.
Texas nonprofits face increasingly serious financial straits. Just more than one-third have no more than one or two months of cash operating reserves with 11 percent reporting they have none whatsoever, according to research from Austin, Texas-based United Ways of Texas and OneStar Foundation, also of Austin.
Another 38 percent of Texas nonprofits have reserves that would last them between two and six months while only 28 percent have cash reserves for more than six months.
Assuming additional investment or support wasn’t forthcoming, only 8 percent could maintain their current capacity for a month. Nearly half (47 percent) could keep their current level of operations going for between one and six months, and just less than one-third could last between six and 12 months without reducing operations.
Seven in 10 Texas nonprofit managers reported their budgets either have been or will be impacted by COVID-19. Another 72 percent have moved in-person events to virtual events, and 82 percent report cancellation of programs or events with a corresponding loss of revenue. Most disturbingly, 40 percent report increased or sustained staff and volunteer absences, in addition to the 24 percent of managers cited reduced employee hours or organizations that have instituted furloughs or layoffs and 19 percent who work for organizations that have instituted hiring freezes.
But the impact of the COVID-19 pandemic hasn’t been felt equally throughout Lone Star state communities. Researchers noted that in Central Texas, organizations that primarily serve communities of color were more likely than others to experience reduced grant funding (38 percent for communities of color, compared with 28 percent overall); or reduced in-kind donations (43 percent versus 29 percent) and more likely to experience delayed grant payments (29 percent, compared with 16 percent overall.)
Central Texas nonprofits were also more likely to seen an expansion in the types of needs their clients or communities have (48 percent to 37 percent throughout the state). But they are adapting: 45 percent have engaged in strategic partnerships with other organizations, compared with 30 percent overall. They are also more likely to control costs through hiring freezes: 36 percent have implemented these, compared with 26 percent throughout Texas as a whole.
The further south one goes, the more likely one is to find nonprofits with reduced cash reserves. In Central Texas, 19 percent of organizations surveyed could last for more than a year at current capacity with no further investment. Within the Rio Grande Valley, only 9 percent indicated they could.
Nonprofit needs were consistent regardless of in which part of Texas they were located. According to fill-in questions, most seek financial support that is unrestricted, especially in the form of grants. Many are looking for technology that will help them better serve their communities, such as tele- and video conferencing software. And more than a few said extension of unemployment benefits would keep their furloughed workers from going elsewhere, although as one noted, they are bracing themselves for an anticipated sharp increase in unemployment insurance rates next year.
That said, northern Texas nonprofits, such as those in the Dallas area, were more likely to highlight their clients’ need for physical supplies such as personal protective equipment and cleaning supplies., as well as basic living essential such as food. They also tended to stress community technology needs, such as those that would enable distance learning.
