{"id":1849,"date":"2020-06-13T12:00:00","date_gmt":"2020-06-13T12:00:00","guid":{"rendered":"https:\/\/idronline.org\/2020\/12\/23\/covid-19-has-serious-implications-for-indias-nonprofits\/"},"modified":"2024-06-21T16:08:32","modified_gmt":"2024-06-21T10:38:32","slug":"covid-19-has-serious-implications-for-indias-nonprofits","status":"publish","type":"post","link":"https:\/\/idronline.org\/kn-in\/covid-19-has-serious-implications-for-indias-nonprofits\/","title":{"rendered":"COVID-19 has serious implications for India\u2019s nonprofits"},"content":{"rendered":"

When the world’s largest and strictest COVID-19 lockdown<\/a> began on March 24, 2020, millions of India’s most vulnerable citizens were suddenly cut off from both their livelihoods and families. Almost immediately, thousands of nonprofit organisations in India mobilised to provide food, healthcare, information, cash transfers, and transportation to affected populations. But at the same time, these nonprofits have also been struggling with the pandemic’s effects on their own capacities and sustainability.<\/p>

To understand how the pandemic has affected nonprofits and where they stand now, the Centre for Social Impact and Philanthropy<\/a> (CSIP) at Ashoka University undertook a rapid response research project, conducting in-depth interviews with 50 leaders of nonprofits in April and May, 2020. The organisations surveyed work across the country, in different thematic areas. Their staff size ranges from less than 10 to more than 1,000 employees, and their annual operating budgets range from INR 10 lakh to INR 250 crore. This project will be followed by a more detailed investigation and analysis later in the year.<\/p>

Here are some highlights from the report, ‘The Impact of COVID-19 on India’s Nonprofit Organisations’<\/a>.<\/p>

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Most nonprofits have pivoted to provide relief<\/h3>

Seventy-six percent of the nonprofits surveyed are actively engaged in ongoing relief work, including last-mile delivery of relief materials such as dry ration and sanitation kits, community awareness and sensitisation, setting up health camps and isolation facilities, rescuing stranded labour, providing direct cash transfers, and offering rehabilitation of distressed communities.<\/p>

However, only about 70 percent of the nonprofits engaged in relief work have received additional funding specific to COVID-19; the rest are using their programmatic funding to finance relief work.<\/p>

Related article: How to ensure financial sustainability during COVID-19<\/strong><\/a><\/p>

Nonprofits have been impacted in multiple ways<\/h3>

The crisis has had an impact on the work and sustainability of the nonprofits surveyed. They can be broadly categorised into three areas:<\/p>

1. Financial stress<\/div>

Given that the typical sources of funding such as philanthropy and corporate social responsibility (CSR) are now flowing towards COVID-19 relief and healthcare-related work, there are concerns among nonprofits regarding the long-term sustainability of their programmes and organisations. This is discussed in more detail below.<\/p>

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2. Unpreparedness to switch to digital platforms<\/div>

Most organisations shared that they had been procrastinating on digital technology adoption in their operations and the sudden lockdown caught them completely unprepared. Due to the lack of digital skills within teams, many are struggling to work remotely. Nonprofits that had already introduced digital technology in their operations and programmes are finding it easier to cope.<\/p>

3. Loss of progress on existing programmes<\/div>

Many nonprofits had to suspend their on-ground programmes temporarily and pivot to relief work, and there is fear that this disruption may undo years of efforts and progress, worsened by the funding setback. Short-term suspension of programmes may have a long-lasting impact, especially among marginalised and vulnerable communities.<\/p>

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Seventy-six percent of the nonprofits surveyed are actively engaged in ongoing relief work, including setting up health camps. | Picture courtesy: Mamoon Akhtar\/Samaritan Help Mission<\/p><\/div>\n<\/p>

The pandemic will have long-term financial implications for nonprofits<\/h3>

When it comes to funding, most nonprofits surveyed are in a ‘wait and watch’ mode, noting that their funding typically comes in the third and fourth fiscal quarters, and that the actual disbursements thus far have been more or less in line with an average year. Therefore, most have not yet begun reworking their programmes or operations strategies. Here, large nonprofits (with projected budgets for FY 2020-21 above INR 50 crore) were exceptions—they have revised their budgets downward for the current financial year by as much as 25 percent, as they feel that their international funding will likely be impacted, considering the global nature of the pandemic.<\/p>

A few nonprofits shared that they are encouraging their employees to pick up new skill sets, especially fundraising.<\/p><\/blockquote>

All organisations reported deferment of increments and new hiring. When asked for how long they could cover their current costs, only 16 percent of respondents said they had enough for more than a year. If additional funding does not come through for the rest, they said they would consider reducing programmes and staff, but will first focus on aggressively cutting down on overheads and non-essential expenses. A few nonprofits shared that they are encouraging their employees to pick up new skill sets, especially fundraising, while regular programmes have been suspended.<\/p>

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Source: Centre for Social Impact and Philanthropy<\/p><\/div>\n<\/p>

International funders have come through, while CSR has withdrawn<\/h3>

The financial concerns expressed by nonprofit leaders depended on whether they primarily rely on international funding, CSR, or Indian private philanthropy.<\/p>

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Source: Centre for Social Impact and Philanthropy<\/p><\/div>\n<\/p>

With most CSR funding being directed towards relief work, including the PM CARES Fund<\/a>, and corporates experiencing financial pressure and stepping back from regular communications, respondents said they fear significant declines in financial support from this source in the near future. Nonprofits primarily reliant on CSR funding seem to be in the most vulnerable position.<\/p>

Nonprofits relying primarily on international funders said that they have come through with rapid, flexible support.<\/p><\/blockquote>

In contrast, nonprofits relying primarily on international funders said that they have come through with rapid, flexible support. They shared that their international partners have proactively extended blanket approvals for use of their funding in a manner deemed fit by the nonprofits. A few have also offered to bring forward funding from subsequent years. However, these nonprofits also realise that this support may not continue in the long-term, given the global nature of the pandemic.<\/p>

Nonprofits relying on Indian foundations and individual giving fell somewhere in between—most of their institutional partners had committed for long-term projects and they are confident that their partners will ensure continuity of support. They do however, expect a few delays in receiving funds, as most philanthropists are also contributing substantially towards relief work. The nonprofits appreciate that these types of donors are passionate about supporting response and relief efforts and are likely to remain committed to their issue areas, but they tend to have slow response times.<\/p>

Looking ahead: What nonprofits and funders can do<\/h3>

Here are some good practices shared by nonprofits who are working to stay visible in the current crisis and relevant post-COVID-19:<\/p>