The coronavirus crisis is hammering Boston’s nonprofit sector, upending its most crucial financial period, the spring season of annual galas and fund-raisers.
The disruption couldn’t have come at a worse time.
With unemployment skyrocketing, nonprofits are seeing demand for their services increase at the same time they are being hit with a drop-off in support; corporate checkbooks have tightened up as businesses lay off and furlough employees.
There’s no road map for navigating this unprecedented turn. But the decisions of two nonprofits with similar missions in education show the difficult tradeoffs that donors and benefactors have to weigh as they try to funnel help to people in need.
The Greater Boston Real Estate Board and nonprofit uAspire elected to postpone their annual celebration, which awards college scholarships to between 30 and 50 students, until June 2021.
Donations — which last year totaled about $500,000 — come mainly from people in the residential real estate business, such as developers, owners, and managers, who are not collecting rent from some tenants for now.
“It’s not fair for us to go forward and try to promise kids something when we are not sure what we can promise them,” said Greg Vasil, the chief executive of the GBREB. “You feel awkward asking for money right now because you know they are struggling. We know if we are respectful, they will come back next year, and we don’t want to burn a bridge.”
The groups will still help a few students this year through a newly created scholarship sponsored by Rockport Mortgage Corp.
Meanwhile, Bottom Line, a nonprofit that helps first-generation students get into college, elected to move forward with a virtual fund-raiser, expecting that it would raise less money than its traditional event that usually nets more than $1 million. Bottom Line serves about 3,000 students a year, and its spring fund-raiser alone accounts for about 20 percent of its annual budget.
“Not having a fund-raising season is really challenging, because I think needs are even more amplified with everything that is happening right now,” said Elizabeth Foster, Bottom Line’s managing director of development.
The virtual fund-raiser on May 5 was more sophisticated than the average video conference, and the original emcees of the gala — the New England Patriots’ Jason and Devin McCourty — still hosted online from their homes in Massachusetts and New York respectively. The event was produced by media group Malka Sports, which coordinated camera feeds and prerecorded elements, similar to a live event.
“Some people who have been to our dinner for the past 15 years said they liked that event better. Go figure,” Foster said. “You have an opportunity to connect with your viewer in a much more intimate way than you get at a room of 700 or 800 people at a sit-down dinner, since everyone gets a front-row seat.”
Even so, Bottom Line still ended up raising less money via the online event, collecting around $500,000. The nonprofit expects to help its typical number of students this year, but next year’s numbers have not been determined, Foster said.
Paul Grogan, president of The Boston Foundation, said COVID-19’s impact on the spring fund-raising season will be devastating to nonprofits which rely on unrestricted donations that they can use for any purpose.
Noting the Boston area has one of the highest rates of nonprofits per capita, Grogan said the Boston Foundation will be studying how these organizations fare.
“It speaks to the unusual reliance on nonprofits that the community has,” he said. “If you think about the colleges and universities, the teaching hospitals, the cultural institutions ... without philanthropy, they would be so much less than what they are.”
City Year, a nonprofit that works with children in the Boston Public Schools, is planning a 20-minute virtual event for May 21. Organizers said they know they might not raise the $750,000 that their annual gala normally brings in, but they expect the need for their services to increase in coming months.
Massachusetts College of Art and Design, which held its largest annual fund-raiser MassArt Auction as a virtual event on April 25, raised more than $1 million, on par with previous years.
“We talked about canceling or postponing to the summer or the fall, but one of the things we kept coming back to was that our fiscal year ends on June 30, pandemic or no pandemic,” said Kathy Calnan, director of advancement at the college. “We have fund-raising goals that are directly related to making sure we have scholarship money available.”
MassArt offered suggestions for how attendees could replicate the 700-person, party-like atmosphere of the annual event at home, such as making a signature cocktail called “The Auction Concoction” and listening to the event’s music playlist on Spotify.
Hosting entertaining online fund-raisers could become a useful tool for nonprofits even as the pandemic ebbs and business life begins to return to normal.
“If you can create an accessible and engaging experience that integrates modern fund-raising capabilities, you’re going to have a lot of organizations making this a permanent part of their business plan,” said Pat Capra, chief executive of Malka Sports.
But some fund-raisers are harder to replicate online than others.
Steven Perrin, president and chief executive officer of ALS Therapy Development Institute, said he expected donations to the Cambridge nonprofit biotech research group to plunge by 60 percent in the next few months because the organization had to cancel fund-raising events.
Among those canceled were a 5-kilometer road race in April and a 300-mile bike ride in June from Boston to Greenwich, Conn., which was expected to attract 400 riders and generate $1 million.
“The impact of this is indescribable,” said Perrin, whose organization is trying to develop new medicines for Lou Gehrig’s disease. “This is like an acute shutdown of a fire hose during a fire.”
His group relies entirely on donations for its annual budget of about $12 million and is scrambling to convert some fund-raising events to virtual ones, he said.
Dusty Rhodes, who specializes in planning large-scale events such as the Boston Marathon Expo and Boston Harborfest, said it is critical that nonprofits get some type of fund-raising in the books this year.
“If you postpone and only bring in 50 percent of what you did last year, that is still better than canceling,” said Rhodes, president of Coventures. “They should go virtual before they abandon. You at least are still engaging your constituency, previous donors, and hopefully some new donors.”
She said she was working with about 20 major nonprofits who had events this spring, and most have postponed to the fall. Rhodes said that could bring a host of other problems in a few months, as the fall philanthropy season becomes saturated.
“First and foremost, we say ‘adjust your binoculars and bring your expectations down,’ and I mean down by maybe even half,” Rhodes said.
With the absence of galas and fund-raisers, The Boston Foundation’s Grogan suspects there could be consolidation across Boston’s nonprofit sector, which is something his foundation has pushed for in the past.
“There is a finite pot of money out there,,” he said. “You want groups to be effective, not so thinly capitalized that they really can’t do anything.”
Jonathan Saltzman of the Globe staff contributed to this report.