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Nonprofit Sustainability: A Question Through Three Waives of Government Stimulus

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Sharif Shamroukh
March 26, 2021

For decades, the philanthropy sector relied heavily on grants and other means of government monetary assistance in order to survive. This raised a main concern since government priorities frequently change due to new presidential or congressional terms. From an economic standpoint, giving to charitable causes may be affected depending on the economy’s strength as a whole. As a result, continuity of an organization’s existence and its ability to meet its mission and provide services becomes a significant concern throughout each organization’s life.

Like any other existing entities, nonprofit organizations have to aid their daily operations and maintain stability to succeed with their missions. Thus, it was not a surprise to hear loud voices of fear when the pandemic started to affect all aspects of life back in March 2020. Therefore, when the government issued the first wave of the economic stimulus bill, known as The Cares Act, the government included some provisions to help the philanthropy sector by increasing the individual allowed deductions of charitable gifts for 2020 and allowing nonprofit organizations to receive Paycheck Protection Program Loans (PPPL) to help their staff and employees continue to commit to the organizations’ schedules. This is similar to the benefits that the government issued for profitable corporations to help nonprofits survive during the unprecedented time. Generally, the second stimulus bill that came was much smaller than the first one and extended funding to nonprofit organizations with similar support areas, but did not match what the philanthropy sector advocates anticipated. The last stimulus bill, The American Rescue Plan Act that President Biden signed into law on March 11, 2021, contained several provisions that aimed to support various programs and activities that usually nonprofits considered as the champions for such programs.

Regardless of specific details of generosity that came with the three stimulus bills that the government enacted, the question remains of overall sustainability for the long term for each existing nonprofit organization, especially those with long-lasting and needed missions. It is essential to build a sustainability strategy to align the organization with its mission and ensure enough resources to maintain its continuity. Thus, since reliance on government assistance will never warrant long term existence due to policy variations and priorities that constantly change with each new administration, nonprofits would strongly be encouraged to build their sustainability strategies to align organizations with their internal and external contexts.

Consequently, nonprofit organizations’ dependency on government for long-term continuity would be a risky option. Although receiving government assistance should be welcomed by nonprofits, and should be encouraged especially during the pandemic, it is the organizations’ development of their strategic approaches that will warrant more extended existence and avoid the potential distraction of daily operations and services to communities. Therefore, nonprofits should be alerted to contemplate certain aspects of creating sustainable resource development strategies that align with their missions. In this regard, receiving government assistance through multiple waves of stimulus bills becomes one valuable source to cope with exceptional circumstance, as in the COVID-19 era. Nonetheless, it should not be the sole source to survive this era. Accordingly, nonprofits should always be ready to diversify their resources to increase their chances for sustainable existence.

As a highly recommended approach to maintain sustainable existence, diversification of resources should be a core pillar for developing a strategy to maintain existence and help nonprofits maneuver through unprecedented circumstances. On the individual level, COVID-19, without a doubt, is a unique phenomenon that changed the way we exercise our daily activities and the way we interact with each other. On the organizations’ level, decisionmakers should learn to avoid the costly lessons that would probably wipe out an entire organization from being part of society. Accordingly, nonprofit organizations need to become more independent in all organizations’ aspects and more capable of achieving their thirst for financial sustainability. Decreasing dependency on government resources and increasing the organizations’ capacities to attain diverse resources is a step forward in maintaining the organization’s existence.

Author: Dr. Sharif Shamroukh is a Senior Lecturer at the American Institute for Philanthropy Advancement, and frequently writes about various public policy issues. Also, Dr. Shamroukh provides consulting services to nonprofit organizations covering a wide range of topics that help achieve their missions.

Contact Dr. Shamroukh via e-mail: [email protected] or Facebook / LinkedIn / Twitter @DrShamroukh

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