November Blog Series - Nonprofit Vulnerabilities

As explored in a recent blog on the economic importance of nonprofits, nonprofits are a significant and essential feature of the United States economy. Coming in third in terms of employment, manufacturing only leads nonprofit employment by 100,000 jobs, but nonprofits exceed manufacturing employment numbers in twenty-eight states. At the end of 2019, nonprofits employed 12.3 million Americans and spent $2 trillion, $826 billion of which was contributed to salaries, payroll, and benefits. The industry sits behind retail and manufacturing in employment numbers. With this in mind, the recent headlines that the U.S. is expecting a wave of nonprofit closures, roughly a third of them, is deeply concerning to many. Researchers have estimated that in a worst-case scenario, the United States could see the closure of 38% of its nonprofits, but a more median case points to 11% closing due to the COVID-19 pandemic and economic crisis. Daunting? Yes, but there are some important features of this research to note before diving into this series on nonprofit vulnerabilities. An estimated 12,000 (4% of all nonprofits) would have closed this year regardless of any crisis. Additionally, in even the worst scenario, a majority of nonprofits survive and continue to serve their communities. The industry is resilient and will recover. Finally, these numbers are only projections and nonprofits can still take action to lessen the impact on the industry. The November blog series from NMBL Strategies will use Tuesday blogs to explore four vulnerabilities of nonprofits that the COVID-19 pandemic and economic fallout compounded on. We will also use the Thursday blogs to explore real organizations affected by these vulnerabilities and examine ways to avoid these pitfalls in the future.