A new report by Deloitte’s Monitor Institute estimates that, as a consequence of the economic crisis generated by the pandemic and the shrinkage of available capacity and resources, around 10% and 40% of nonprofits could consolidate or close their doors during the next 12 to 18 months.
This impact would be disproportionately greater in community organizations of marginalized groups as they have less access to capital. Furthermore, NGOs that depend on income from work and / or government contracts will likely be the most affected. At the same time, the existing power imbalance between donors and NGOs could be exacerbated, as the former would be the last financial backing for many organizations.
The report, titled “An event or an era? Resources for social service decision-making in the context of COVID-19,” outlines future scenario planning. These scenarios vary depending on the levels of continued severity of the crisis and on the levels of social cooperation, however, even the most optimistic future scenario presents significant difficulties.
With this in mind, the Deloitte Monitoring Institute launched a national effort with pro-bono investment, with the aim of applying future scenario planning and thus helping funders and NGOs prepare for the post-COVID-19 landscape.
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