Pandemic financial pressures build for Pittsburgh region's nonprofit sector

Mar. 25--A brewing economic storm, fueled by a pandemic whipping up gale-force financial headwinds, is threatening to batter more than 1 million nonprofit organizations across the nation already struggling with increased demands for services.

A plummeting stock market -- down some 10,000 points, or about a third, in a month -- has left donors who typically answer the call for help with less to contribute and the U.S. leaders fighting off a full-fledged freefall.

The U.S. Centers for Disease Control's guidance that those older than 60 are at heightened risk for covid-19 has sapped the core of younger retirees who comprise the majority of volunteers at many charities and nonprofits. And social-distancing orders have forced the cancellation of fundraisers ranging from Lenten fish fries and bingo to formal galas.

Laura Otten, director of the Center for Nonprofits at La Salle University in Philadelphia, fears the donations and fundraisers so many groups rely upon may not bounce back quickly.

"I would liken this to a combination of a natural disaster and a recession. The people who need help may tug on the heartstrings of donors. But at the same time those people are wondering, 'What's happening to my bank book?' " she said. "We have a human crisis, but there also are financial questions individuals are asking about their own security."

Locally, volunteer fire departments struggling to maintain membership rosters now face lost fundraising opportunities. Many depend on revenues from weekly fish fries during Lent and hall rentals to keep their trucks on the road.

Both have been canceled for the immediate future.

"We do what we have to do to protect the general public," said Tom Bell, Greensburg's fire chief. "Our priority is keeping people safe. And if we have to find alternative source of fundraising or do more fundraising, we'll do it."

The Friendship Circle, a group in Pittsburgh's Squirrel Hill neighborhood that provides inclusive social activities for youths and adults with diverse abilities, has postponed in-person activities to virtual programming. It also has postponed its annual spring gala.

Friends All Around, previously scheduled for April 25 at The Pennsylvanian, attracted about 625 people last year. The event showcases The Friendship Circle's work, celebrates its members and highlights the 50 to 60 high school seniors who support the group's mission, which is to create a more-inclusive community. It netted it about $300,000 last year, said director and co-founder Rabbi Mordy Rudolph.

"It is the cornerstone of our annual fundraising efforts and a way to get the message out about our work. It's been super important to us," he said.

Like Bell, Rudolph said the health and safety of the public and people The Friendship Circle serves trumps everything else. Both hope to reschedule events after the public health crisis subsides.

The Lamp Theatre, a nonprofit in Irwin, hoped to host about 250 guests at its spring gala March 20. Stratigos' Banquet Centre has agreed to reschedule the event, Lamp spokesman Joe Gdula said.

New reality

The impact of the coronavirus will vary from organization to organization, said Richard Cohen, chief operating officer of the National Council of Nonprofits. But few will escape financial losses.

"There's no one thing, no one solution to this, but all of them are feeling pain," he said. "We're telling folks to take it day by day. They may be able to hold events that had to be canceled as virtual events. And by letting donors know the impact their gifts have, it may inspire them to give now rather than wait until the end of the year."

Organizations that have canceled events might explore taking them online, Cohen said.

The organizers of the Trooper Kenton Iwaniec Memorial Foundation's TakeOff Race said that's what they intend to do. They will hold a virtual race this spring in lieu of the annual race held at Saint Vincent College. The event memorializes Iwaniec, a state trooper who was killed by a drunken driver on his way home from work 12 years ago. It raises money to buy breathalyzers for police.

Although workarounds like virtual events may help some nonprofits, Cohen said it would be a mistake to believe pain from the nonprofit sector won't reverberate throughout the economy.

In addition to delivering vital social services, education and arts programs, the nonprofit sector has 12.3 million employees -- about 10% of the U.S. workforce, Cohen said. Various reports peg its contributions to the U.S. economy at about 5%.

Many of the nation's hospitals and private colleges, two sectors taking major hits because of the coronavirus, are nonprofits.

St. Jude Children's Research Hospital in Memphis, with 3,600 employees, draws contributions from all over the United States. An annual black-tie gala in Pittsburgh that raises hundreds of thousands of dollars for it was among the recent cancellations.

A charity ball in Seattle that raised more than $3.5 million for Juvenile Diabetes Research last year likewise was canceled. Like others, the Seattle group said it plans to reschedule once the virus had passed and prohibitions against public gatherings are lifted.

Meanwhile, some fear the effect this will have on the hourly workers at nonprofits.

Otten said many of them must take a second job to make ends meet. She fears they may be among the people lining up at food pantries.

Peggy Outon, director of the Bayer Center for Nonprofit Management at Robert Morris University, said she worries about small nonprofits that lack the staff and technology to weather the crisis.

The Westmoreland Fireman's Association postponed a purse bash originally scheduled for March 28, said president Jamie Bartley, a South Greensburg volunteer firefighter who also directs the county's Rough Terrain Team.

"That is the only fundraiser we have," he said. "We rely on that money to buy our equipment and pay our insurance to keep our guys safe."

The team that handles search-and-rescue efforts in rough areas will simply try to reschedule the fundraiser later, but Bartley is nervous.

Outon said the impact at any one place can trickle down to others.

"My church on the North Side (of Pittsburgh) has a fish fry that supports the food bank. It's tremendously challenging when you have things like that and you only have three or four people and they have to learn a whole new way of operating to keep going," she said.

Fears like that moved The Heinz Endowments, the Richard King Mellon Foundation, the Hillman Family Fund and the Pittsburgh Foundation to join forces last week to launch a $10 million fund with a commitment to cut through red tape to quickly get grants to vital human service organizations affected by the virus.

Foundation spokesmen said the move is just the first step in crafting a long-term recovery plan for Southwestern Pennsylvania.

They are in for the long run.

Deb Erdley is a Tribune-Review staff writer. You can contact Deb at 724-850-1209, [email protected] or via Twitter .

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