Study Shows Financial Impacts of COVID-19 on Arkansas Nonprofits

A new study from the University of Arkansas Clinton School of Public Service, Arkansas Community Foundation, and UA Little Rock School of Public Affairs shows that Arkansas nonprofits have experienced significant financial distress and service disruptions due to the impacts of COVID-19.

Key findings from the Arkansas Nonprofit COVID-19 Impact Study include:

• Nonprofits have lost significant revenue due to the impacts of COVID-19, with 64% of surveyed nonprofits reporting a loss of fee-for-service revenue and 64% reporting a decline in individual donations.

• COVID-19 has also impacted nonprofit employment of paid staff in the form of reduced hours, furloughs, and layoffs. More than 30% of nonprofits surveyed have reduced employee hours, while 15% reported layoffs.

• Nearly 70% of nonprofits surveyed are operating at a reduced capacity, including complete program cancellations, and many have had difficulty obtaining needed supplies.

Shortages of volunteers, a lack of protective personal equipment (PPE), and adjusting to the shifting needs of clients in response to COVID-19 were among the other challenges that emerged from the study’s findings.

Many organizations also reported making efforts to adapt to the challenges of COVID-19 by finding new and unique ways to deliver their services, including implementing online programs, increasing operating hours to decrease crowds, offering drive-thru services, and increasing partnerships with other organizations.

The study was designed collectively by Dr. Nichola Driver, Assistant Professor and Faculty Director for the Office of Community Engagement at the Clinton School; Dr. Kirk Leach, Assistant Professor in the UA Little Rock School of Public Affairs; and Sarah Kinser, Chief Program Officer at Arkansas Community Foundation. Second-year Clinton School students Jaylin Sprout and Brittany Moody provided research assistance.

“Funding is the most critical challenge right now, since many nonprofits have had to cancel in-person fundraising events,” Dr. Driver said. “We also broke down the findings by program areas and budget sizes. The program areas that seem the most negatively impacted are Arts, Culture, and Humanities, Health, and Education.”

The survey was administered between June 22 and July 10, 2020. A total of 316 nonprofit leaders representing small and large nonprofits responded to the survey. Respondents represented nonprofit organizations serving all 75 Arkansas counties and across all nonprofit program areas and budget sizes. Most respondents were from organizations with annual budgets under $500,000 and most operated with paid employees.

A link allowing nonprofits to submit their answers was distributed through email lists owned by the Arkansas Community Foundation and the Clinton School of Public Service.

Survey respondents were also asked open-ended questions about the most urgent challenges they will face over the next three to six months. Among the responses were funding, lack of volunteer support, the need to move programs into online formats, adjustment to shifting toward client needs, lack of personal protective equipment (PPE), planning through uncertainty, and general health and wellbeing concerns for staff and clients.

“We have seen similar reports surfacing across the country and we felt it was important to have data reflecting what was happening in our state,” Dr. Driver said. “We wanted to get the word out to donors, funders, and policymakers to aid the discussion of next steps.”



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