The Post-Covid Nonprofit: Burnout, Chaos, and the Grinding Hunt for Staff and New Revenue

The following is a story published by The Chronicle of Philanthropy.

By: Drew Lindsay
April 4, 2023

Rarely a day goes by that Peter Smerud’s wife, Sue, doesn’t suggest he retire. “Just get out,” she says. Smerud, 59, is an environmental educator with degrees in biology, chemistry, and German and a deep knowledge of the peregrine falcon, which he helped reintroduce to northern Minnesota. For more than 35 years, he has shared a love of the wilderness born of his time in the Boy Scouts — he was an Eagle Scout —and hunting and camping trips in the state’s woods and Boundary Waters area.

Since the mid-1980s, Smerud has worked at Wolf Ridge Environmental Learning Center. It’s the largest facility of its kind, with a 400-bed residential program and 2,000 acres of woods and lakes in northeast Minnesota. Kids make sunrise hikes to Marshall Mountain, a ridge named for philanthropists who donated
much of the land for the center, and watch the day break over Lake Superior.

Smerud, who has an open, kind face and the build of an ex-linebacker, knows hardship. A cancer survivor and former member of rock-climbing and river rescue teams, he shrugs off the subzero temperatures that can grip Wolf Ridge for weeks. And he has helped the center weather economic storms spun up from 9/11, the Great Recession, and most recently, the pandemic. “We’re very proud that we run a good business,” says Smerud, executive director since 2011. The organization entered its 15-month Covid-19 shutdown with more than $500,000 in reserves and emerged debt-free.

Despite this triumph, however, optimism is in short supply at Wolf Ridge. Government and private pandemic-relief funds are gone, and with the stock market’s decline, grant makers are warning they will cut support. The summer program, which drew as many as 2,500 adults and children annually, hasn’t rebounded. School visits are down. Wolf Ridge’s operating budget, which stood at $3.8 million before the pandemic, dropped to $2.4 million last year.

Worse, perhaps, are Smerud’s labor woes. He’s turned away business because he can’t staff programs. Administrators and instructors are hard to come by, and a booming tourist industry is luring away custodial, maintenance, and kitchen staff.

“I’m one cook’s resignation from shutting down a $38 million facility,” Smerud says.

Dream Funds Disappear
Three years ago, as America locked down in the face of a mysterious disease known as a “novel coronavirus,” it was easy to imagine catastrophe for nonprofits. Researchers with Candid described a worst-case scenario in which nearly four out of 10 organizations might shutter. Emergency aid from government and grant makers forestalled that nightmare, along with a surge in giving by individuals. The no-strings-attached money — effectively bushels of the general operating support that charities dream about — left some groups stronger than before. (See the article on Page 9.) Nearly a fifth of organizations in a survey in late 2022 by the Forvis consultancy reported that they are “very pleased” with their financial position.

For groups like Wolf Ridge, however, the red alerts triggered at Covid’s start continue to flash. The pandemic, it turns out, has a long tail that’s wreaking havoc on budgets, mission, and peace of mind. Adrenaline-fueled fears about staff safety, moving operations online, and navigating Covid surges have eased, but in their place is a grinding pressure to make ends meet amid inflation, labor shortages, and a “new normal” that’s eroding business models. Many nonprofit leaders are responding with promising innovation. Still, each day they confront unexpected chaos and an unknowable future. The job, they say, feels a lot harder, a crisis that never ends.

Consider organizations that rely on money from membership dues or foot traffic — ticket sales, entrance fees, tuition, and the like. Their numbers generally haven’t bounced back to pre-pandemic levels, and there’s no telling when — or if — they will.

For instance:

• YMCAs nationwide lost half of their 22 million gym-and-swim members during the pandemic, and the
  number has inched up to just 13 million.
• Box-office ticket sales over the past two years are down 20 percent to 30 percent from 2018 and 2019 for large performing-arts groups, according to surveys of more than 100 groups by SMU DataArts, a research group at the Texas university. Giving is off a similar amount.
• Undergraduate enrollment has dropped 7.5 percent from 2019, according to the National Student Clearinghouse Research Center, with community colleges down a kick-in-the-stomach 16 percent.
• The share of Americans who say they never attend worship services of any faith grew from 25 percent to 33 percent. Churches have lost an average 36 percent of in-person worship attendance, according to surveys of nearly 4,000 congregations from more than 40 Christian denominations by the Hartford Institute for Religion Research.

Inflation and labor costs, meanwhile, are squeezing budgets at all nonprofits just as pandemic aid is coming off the books for many. Nearly half of nonprofits saw a decrease in net income in 2022, thanks to growing expenses and decreases in government appropriations.

At the nonprofit Mother Jones magazine, paper costs are up 56 percent while revenue is down as its advertisers — mostly fellow nonprofits — slash marketing budgets. Maryhaven, which runs seven treatment centers in central Ohio for addiction and mental illness, is battling for-profit counterparts for a pool of workers that shrank during the pandemic as remote work and other new career opportunities emerged. The organization is paying three and four times what it did for labor at all levels, says its CEO, Oyauma Garrison.

Maryhaven addiction-treatment centers face competition for staff from for-profits offering bonuses and big salaries, says Oyauma Garrison, CEO of the Ohio group.

“Whereas once $15 an hour was considered a livable wage, now you have people who are very new to their roles — I’m talking about frontline, entry-level staff — demanding $25 an hour or more,” Garrison says. “Where do we get revenue for that?”

Staff shortages are forcing some organizations to cancel programs. The Fan Fox & Leslie R. Samuels Foundation in New York City, which supports programs for the aging, had to cancel four grants when organizations couldn’t hire staff to do the work. “There was a good bit of turnover before [in the aging field], but this is crazy,” says Julio Urbina, director of the foundation’s healthy-aging program. Layoffs Ahead?

The short-term outlook offers uncertainty, not respite. Many foundations that chose to rethink their priorities in the wake of the pandemic and 2020’s racial reckoning have yet to articulate a new focus, says Monika Bauerlein, CEO of Mother Jones.

“The post-pandemic normal is not like the pre-pandemic normal. The whole playbook is being rewritten.”

This summer marks the third anniversary of the police murder of George Floyd — and the end of many foundation grants awarded afterward. Racial-equity groups worry that donors will lose interest, as they often do, after the first grant cycle.

“Everyone’s looking to see who’s going to deepen work and who’s going to pull back,” says Sidney Hargro, executive director of LeadersTrust, which works with grassroots justice groups.

Inflation’s retreat has been slow, and the specter of recession looms — all the more so given the crisis roiling regional banks, often key grant makers and lenders to local nonprofits, following last month’s failures of Silicon Valley Bank and Signature Bank. YMCAs made small cuts in staff and programs at the pandemic’s
start but likely had contingency plans for laying off as many as 25 percent of employees, says Shawn Borzelleri, an executive vice president at the Y’s national office.

“The question will be: Coming out of this, will they have to go back to those plans at any point? Hopefully not.”

Nature-center and outdoor-learning nonprofits like Wolf Ridge sit on a knife’s edge, according to Jen Levy, executive director of the Association of Nature Center Administrators. In the pandemic’s first days, Levy thought, “We’re going to lose so many centers.”

“Those fears are back — or they never left, I guess,” she says now.

Read the rest of the article online here.