Covid-19 Could Mean the End of Small Charities

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Non-profit groups in the U.S. and other countries could shutter operations entirely as a result of the coronavirus, even as billions of dollars are donated to pandemic-relief efforts.

Many local non-profits that count on small donors are in trouble, said Rick Cohen, chief operating officer of the U.S.-based National Council of Nonprofits. Canceled events, a sudden withdrawal of government financing and the forced closure of stores that were sources of revenue have led to a depletion of funds, he said.

Charitable organizations around the world have suffered in recent months with income and fundraising streams drying up as tens of millions of people lost their jobs or faced greater financial difficulty. The London Marathon, for instance, raised66 million pounds ($80 million) for various U.K. charities in 2019, but this year’s run that was scheduled for April has been postponed.

“Nonprofits are facing devastation right now,” Cohen said in an email. “Some are facing skyrocketing demands for their services, others are seeing funding dry up, and some are seeing both at the same time.”

Tracking Gifts, Donations Made to Fight Coronavirus: Bloomberg Tracker

About 53% of donors said they plan to be giving more carefully during the pandemic but will continue to still donate, while 20% said they will stop until there’s a return to economic growth, according to asurvey carried out for Dunham+Company.

The rest said they would keep on giving, the survey showed, citing the sentiment is stronger among donors who frequent religious services at least weekly.

“The oldest donors, regular churchgoers, and self-described conservative donors were significantly more likely to say their giving would remain unchanged compared to younger donors, less frequent churchgoers, and liberal donors,” according to Dunham.

Ramadan Effect

Donating to charity is ingrained in the Islamic month of Ramadan, and much of this is typically raised through collection boxes at mosques, gala dinners and other fundraising methods, as many Muslims attend nightly prayers at their local places of worship. But with mosques closed around the world, more Muslims have instead turned to donating online.

MyTenNights, a non-profit organization that collects donations for several charities in five countries, said at least 6.8 million pounds has been donated to a number of aid groups on its online portal. That compares with 2.7 million pounds at the same point last year.

“The general charity sector has taken a hit, but the Muslim charity space has responded favorably to the current circumstances,” Ismael Abdela, co-founder of MyTenNights, said in an interview. “Two of our main charity partners are up 50% on year-on-year donations, and it’s too early to have any studies on this, but anecdotally, what I would suspect is that there’s a heightened sense of connectedness to faith at this time.”

Corporate Philanthropy

While individuals may not be able to donate as much as before, corporate giving has soared in the last few months and accounts for more than $5 billion of donations, according to Candid, a group thattracks global philanthropy. Twitter Inc.’s Jack Dorsey is the largest single donor, contributing $1 billion, while Alphabet Inc.’s Google is the largest corporate donor, giving more than $907 million, its data showed.

Philanthropic giving toward the Covid-19 pandemic is 10 times higher than the amount donated in the aftermath of the 9/11 attack, and reflects the global nature of the coronavirus, said Andrew Grabois, corporate philanthropy manager at Candid.

“The global surge in giving for Covid-19 relief efforts reflects the scope and hybrid nature of the pandemic,” he said. “It is a public health disaster affecting the health and mortality of people in every country and continent and a crushing economic crisis that has forced more than a billion people worldwide to quarantine and countless businesses to shutter.”

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