COVID-19 impact on Indian nonprofits

Centre for Social Impact and Philanthropy report

During the ongoing pandemic after the doctors and healthcare staff, Nonprofit organizations(NPOs) are the changemakers.

“Across the country, individuals, teams, and organizations have provided millions of meals, dry ration kits, and personal protective equipment; amplified health and policy announcements; directed cash transfers and other forms of temporary income support; secured transportation for stranded workers; forged partnerships and coalitions of donors, nonprofits, volunteers, and government agencies; developed research, healthcare, and technology solutions to track, treat, and combat the coronavirus; and advocated on behalf of our democratic rights and freedoms,” says Ingrid Srinath Director Centre for Social Impact and Philanthropy, Ashoka University.

At the same time, the nonprofit world has been hit hard, unlike any business due to COVID-19.

In March 2020, thousands of NPOs that engage with low-income and vulnerable communities on critical issues — i.e., health, education, women’s empowerment, livelihood creation, and more — had to halt their programs due to the nationwide lockdown. Yet as this public health mandate triggered an economic, social, and humanitarian crisis, nonprofits were among the first to respond with relief efforts. 

Over the last few months, NPOs despite resource limitations, and virus fear still have to undertake an array of activities to provide immediate relief and help communities. This involved distribution of relief material, generating awareness, supporting the migrants and the ultra-poor, and counseling for mental health. 

“We have been informed that the incidents of domestic violence in this lockdown have considerably gone up. With the victim being locked in with the perpetrator, there is limited scope for breaking free.” - Organisation working on gender-based violence.

The list is endless and at a time when the NPOs themselves have been hit hard.

So how are India’s nonprofit organisations themselves coping?

The Impact of COVID-19 on India’s Nonprofit Organizations - a snapshot report tries to find the answer. The Centre for Social Impact and Philanthropy conducted 50 interviews with nonprofit leaders, in the months of April and May 2020, to assess their engagement in relief work, operational and financial status, and coping strategies during the pandemic.

During the lockdown’s suspension of their regular on-the-ground programs, some NPOs have shifted their focus to research and knowledge creation, building a social media presence and completing administrative tasks. The lockdown has made it evident to NPOs that their limited digital skills and capacities pose a major operational challenge. Realising the critical need for digital technology adoption in the post-COVID-19 world, a few NPOs have started investing in digital skills. 

Top concerns expressed by NPOs

A majority of the organisations covered in the study work directly with beneficiaries and most of them have had to suspend their on-ground programme activities temporarily. Meanwhile, team members have been advised to work remotely. 

Remote working has shown the challenges and especially for working women. “I have to take care of my kids who are now at home, my husband is working from home and then I am also working from home. Work from home has no work-life balance because the work keeps on going just because you are at home and have nowhere to go,” shared a female NPO professional.

Some organisations shared that they have advanced activities that can more easily be undertaken while working remotely. According to the report: “These include research and knowledge creation efforts that had been planned for later in the year. Others are for example working on updating their websites and social media presence, and a few are using this time to complete pending documentation work.”

Funding concerns

A majority of NPOs are in a ‘wait and watch’ mode as they say it is the start of the financial year and typically the programmatic funding comes in the third and fourth fiscal quarters. 

The report adds a handful of large NPOs, with a projected budget for FY 2020-21 over 50 crores, have revised budgets downward for the financial year 2020-21 to the tune of 25%, as they feel that their international funding will likely be impacted considering the global nature of the pandemic. 

When asked how long they could cover their organisation’s fixed costs with existing funds, 30% of respondents said they have funds to help them sustain themselves for less than six months and 54% have funds which will last for 12 months. Only 16% have funds for longer than a year.

NPOs primarily depend on CSR funding and are grappling with the highest order of anxiety. A third depend primarily on international funders, and one-fifth of the NPOs receive most of their funding from Indian philanthropic foundations or high net-worth individuals.

The challenge is that the majority of CSR funds are being diverted to the immediate relief work, including the PM CARES Fund. Additionally, with a shrinking economy, it is obvious that the CSR budgets will be on the radar by the corporates. NPOs dependent on Indian philanthropists noted that bureaucratic structures and slow approval processes are bottlenecks. 

NPOs with a primary dependence on international funders reported receiving great support including proactive engagement with NPOs and offering a flexible approach to funding. However, nonprofit organisations worry that funding from international funders may reduce in the future in light of the global impact of the pandemic. 

This is where NPOs have to broaden their horizon of funding and look at individual giving.

“For the last five years, we have completely survived on the crowdfunding model. But the pandemic has forced us to look at other mediums and digital is one of the ways,” added a young entrepreneur who is running an NPO in the education space.

Embracing the digital revolution

The COVID-19 crisis has further highlighted that NPOs are significantly lagging behind when it comes to the digital revolution. The report further added:

“Most organisations shared that they had been procrastinating on digital technology adoption in their operations and the sudden lockdown caught them completely unprepared to handle the crisis. Organisations are lamenting that due to the lack of skills of the program team, they are struggling to work remotely.”

Adopting remote work and embracing digital happened both at the same time. Organizations that had invested in digital capabilities could save themselves. But that number has been quite low. Not just adopting but NPOs severely lack in digital skills. 

According to the benchmark study carried out by Target Internet and The Chartered Institute of Marketing the charity sector scored below average in 10 out of 12 core digital marketing competencies, and when comparing skill sets across professions, the sector was also behind industries in the private sector.

The report in its section - Good practices for NPOs highlights:

  • Use social media to build and strengthen narratives

  • Embrace digital technology

  • Communicate (better) with funders

All three good practices are subsets of Online Fundraising. It is strange the report has no mention of Online Fundraising. I will park my concerns at bay and stress the fact that before using social media to spread the word about your work and the impact stories. Sit down and think from a user point of view why someone would be interested to consume your content.

Communication is the basis of any relationship. A funder or a donor and NPO have to communicate better in any situation. The report gives an example of an organisation working on environment and ecological security is sending out weekly/biweekly pamphlets with ground-up stories from communities. 

Can we move further from monthly reports and pamphlets? Can we adopt Email Marketing? And can we slightly be more active in communications with donors rather than going silent for months and then suddenly waking up?

Embracing email is a part of adopting digital technology. Having an online donation page on the website is Digital Transformation. Also one needs to educate or hire the people with the desired skills. 

Definitely invest in digital capacity and technology. Just don’t buy technology and live it in a corner since no one knows how to use it.

For further reading download the report (link).