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New Report Offers 4 Scenarios for How Covid and the Economy's Fall Will Reshape the Nonprofit World

Posted: 7/27/2020

Click here to read on Chronicle of Philanthropy

By Michael Anft

As organizations and foundations search for ways to eventually recover from the effects of Covid-19, they should consider how they will deal with a spectrum of consequences, according to a report issued Monday.

In the report, the Monitor Institute by Deloitte lays out four settings for the nonprofit world to anticipate. Organizations could face a society in which people cooperate as they rebuild or one marked by cascading death rates, a collapsed economy, and social chaos.

During interviews with some 75 leaders among nonprofit and grant makers, as well as other experts, Monitor — the social impact unit at Deloitte, an international professional-services firm — sought to learn how they might respond to a host of contingencies.

Early on in the pandemic, the institute decided to peer into the future after noting the divergent opinions among some of Deloitte's nonprofit and philanthropic clients.

"There are some people — a smaller set of our sample — who think that the world has weathered similar storms before and will do so again. There were a larger number who admitted they really don't know what to do right now," says Justin Marcoux, a senior manager at the Monitor Institute.

Views on how organizations might move forward differed as well.

"Some people were thinking that we could get back to normal from this. Others believe the impact could be like that of the Great Depression," adds Gabriel Kasper, managing director at the institute. "We were talking with foundations who said, 'We've already made our emergency round of funding — what do we next?' and nonprofits who were trying to figure out how to manage through all of the huge financial and programmatic uncertainty."

Cooperation or Chaos

Institute leaders hope that the scenarios offered in the report give nonprofit and foundation leaders enough context to envision their organization's recovery.

Peering 12 to 18 months into the future, Monitor researchers examined how nonprofit and foundations leaders could deal with the unprecedented budgeting, operational, and strategic challenges of Covid-19. While dismissing several meaningful factors from the study, such as climate change and the November elections, because predicting their effects is too unwieldy, the study did include racial equity in its projections because of recent social unrest and the philanthropic world's growing concerns about inequality.

The scenarios run the gamut. Two are based on cooperative societies that favor reform instead of sweeping changes or that pull together when an unrelentingly high death rate from Covid-19 forces a majority of its citizens to realize that such structural changes are necessary. On the darker side, the nation's divided nature leads to the unraveling of the social fabric or to the prevalence of fringe views and the turmoil that can come with them.

"The idea is for organizations to live in all of the scenarios, and not just plan for one," Kasper says. "Resilient organizations are the ones that have a broader array of options and are prepared to shift depending on how the future plays out."

Demand for Services

Along with the report sprinkling various projections among its four scenarios, it also offers five assumptions central to each about what nonprofit leaders will face when they dust themselves off and look ahead. These include a growing need for services during and after the pandemic that will outpace the capacity and resources of organizations, the possibility that 10 to 40 percent of groups will be forced to close or merge with other ones, and an expectation that the brunt of Covid-19 will disproportionately fall on people of color. And there will be much less government money to help pay for the services organizations deliver.

Monitor will be following up on the report with new research on what it calls "reset opportunities" for grant makers and organizations, post Covid-19, such as finding new uses for office buildings that the pandemic has helped make obsolete. Opportunities might also exist to remodel health-insurance plans for individuals, reimagine affordable-housing programs, and emphasize labor rights, Kasper adds.

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