We have heard so much about inflation, job security, high prices of groceries and how poorly investments have been doing due to the content within the election campaigns. In fact, most political experts have been publishing the fact that the economy was one of the main issues in the presidential elections.
What has been a difficult sequence of financial realities for non-profit organizations has been the post-COVID change in funding. Many non-profits, because of the level of severity of needs that they meet, stayed open during COVID when many organizations ceased operations. The funding gained from the Employee Retention Tax Credit legislation provided millions of dollars to profit and non-profit organizations that continued to operate during 2020. It took some time to file for those funds and they were delivered as late as 2023.
These funds were essential for the survival of many non-profits. I know for Lakeside there were several sources of grants from state and federal funding that compensated our organization for lost revenue that we experienced during COVID. Additionally, organizations that we provided training to were also able to use our training programs to help their staff deal with the trauma of COVID. Even our regional school districts received funding for additional mental health staff for the returning students who were demonstrating diagnosed psychological consequences of COVID. Lakeside was inundated with requests for counseling services to our regional school districts. Our counseling program expanded rapidly as well as availability of funding for this pressing mental health need.
During this interlude of time the inflation rate grew and expenses for construction, vehicle repair, health insurance, salary expense, varied types of supplies and technology rose significantly. Some of those increases were masked with the additional COVID funding. Yet for most non-profits, apart from COVID funding, typical yearly increases in revenue remained stable at best and were reduced for some. Meanwhile, the mental health needs for clients have rapidly increased which has made the financial stress even more intense.
Now that very little of the COVID funding is available, non-profits are left with higher expenses, lower revenue and more intense needs particularly in mental health. This shifted-economy has impacted our non-profit organizations negatively and has created intense financial strain on budgets, capacity and future uncertainty. The philanthropic community has shifted its emphasis and scope so that even the grants have been less available.
My point is the very non-profits who are working diligently to heal our post-COVID mental health needs find themselves in a situation of financial strain and deficits. The expenses have risen significantly, the revenue increase percentages have flattened, and many of the grant programs that were formerly funding programs have reduced significantly. The changes in our economy have put many non-profits in financial jeopardy. The state of the economy matters to all of us but has really jolted our non-profit community of caregivers. It is my hope that this reality will be recognized and that those in positions of financial resource will recognize the significant need and offer help for those non-profits who are struggling to complete their mission due to these economic factors.
Gerry Vassar
President/CEO
