By Ian Lovett and Alejandro Lazo
SAN FRANCISCO -- Catholic Charities of San Francisco is still
open. The century-old organization is offering free meals for
seniors, conducting outreach to the city's homeless and running two
residential-care facilities.
But the revenue streams that usually subsidize those programs,
such as youth camps, athletic leagues and transportation services,
have been deemed nonessential by the local government amid the
coronavirus pandemic and ordered to close. As a result, Catholic
Charities projects it will run a deficit of at least $3.5 million
by June.
"I don't know how long we'll be able to keep serving those
vulnerable people," said Jilma Meneses, the organization's chief
executive.
The coronavirus outbreak is ravaging nonprofit organizations'
finances, threatening many of their usual revenue sources at a time
when demand for their services is skyrocketing.
Fundraisers are being postponed or canceled. Donations have
fallen as much as 75%. Businesses and events that nonprofits
operate to earn money, ranging from opera performances to autism
therapy centers, have been shuttered. Layoffs have already
begun.
"It's devastation," said Rick Cohen, chief operating officer for
the National Council of Nonprofits, which represents thousands of
groups across the country.
A coalition of more than 100 nonprofit groups appealed to
Washington for help, requesting that $60 billion be earmarked
specifically for them in the federal economic-rescue bill. In the
bill that President Trump signed Friday, however, no money was
earmarked specifically for the sector, though nonprofits would be
eligible to apply for federal loans.
The lost revenue for nonprofits comes in many forms. The YMCA,
with most of its facilities shut down, expects to lose $400 million
in revenue in April alone among its 2,600 locations nationwide.
Habitat for Humanity closed its home-goods stores, which
generate about $500,000 annually, and has mostly stopped building
homes with volunteers and selling them to needy families, which
accounts for 28% of the organization's revenue.
Some of Habitat for Humanity's 1,200 U.S. chapters could be
forced to close within months, said Jonathan Reckford, the
organization's CEO.
Still, many charities feel compelled to stay open, even if they
are operating at a loss.
Catholic Charities of San Francisco hosted its regular monthly
food distribution to about 500 seniors at Temple United Methodist
Church last week, despite its ballooning budget deficits.
Seniors this week showed up wearing face masks to collect peanut
butter, pasta and other pantry items.
Huang Qiao Jun said he had been coming to the distribution
center for 11 years. He didn't have a plan if the food bank shuts
down.
Sixty-seven of Catholic Charities of San Francisco's employees
have been furloughed, and officials said more will likely
follow.
Because it employs more than 500 people, Catholic Charities of
San Francisco would be excluded from the interest-free small
business loans, which would be forgiven in many cases, outlined in
the stimulus bill. The National Council of Nonprofits
unsuccessfully pushed to have the 500-employee cap removed.
Larger organizations would be eligible for loans at up to 2%
interest, which would not be forgiven, and the bill also includes a
tax incentive for charitable gifts up to $300. More than 12 million
people work in the nonprofit sector.
In Canada, where there are roughly 170,000 registered charities
and nonprofits that employ 2.4 million people, many nonprofits have
only about two weeks of operating cash, said Jay-Ann Gilfoy, CEO of
Vancity Community Investment Bank. "Some of the big organizations
will survive, but the local organizations won't," she said.
At Los Angeles First United Methodist Church, which serves a
low-income population downtown, most of the congregation's revenue
comes from its parking. Located near the Staples Center, where the
Lakers play, it normally brings in $49,000 a month. This month, it
will be closer to zero, said Mandy Sloan McDow, the senior minister
at the congregation.
"I am so, so concerned, because we have some reserves, but not
much," said Rev. McDow. The congregation opened briefly on Sunday
to make sure homeless members got a meal.
Latino Leadership, a small nonprofit in Florida, laid off all 33
of its employees this week and shut its center for children with
autism.]
Marucci Guzman, the executive director, said they didn't have
reserve funds to stay closed for multiple months.
A no-interest federal loan would help the organization pay rent
and keep the lights on, Ms. Guzman said, but wouldn't allow her to
bring back many of the therapists she employs, who aren't allowed
to offer telemedicine under Florida law.
"We would have been celebrating five years of our autism center
in April, " Ms. Guzman said, choking up. "Instead of having
cupcakes, we're giving out furlough letters."
--Vipal Monga in Toronto contributed to this article.
Write to Ian Lovett at Ian.Lovett@wsj.com and Alejandro Lazo at
alejandro.lazo@wsj.com
(END) Dow Jones Newswires
March 30, 2020 07:20 ET (11:20 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.