Giving Compass' Take:

• A survey of NPOs in India conducted by The Centre for Social Impact and Philanthropy reveals how funders can help nonprofits weather the COVID-19 pandemic. 

• The interviews were conducted in India, but they reflect challenges felt by nonprofits around the world. What can you do to ensure that nonprofits in India and elsewhere are able to serve their communities?  

•  Learn about the opportunity to scale impact in India

This snapshot report presents a rapid response research project on the operational and financial implications of COVID-19 on nonprofit organizations (NPOs) in India. 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.

We found that three-fourths of the NPOs are actively engaged in ongoing relief work, using their embeddedness in communities as a particular strength. This work ranges from last-mile delivery of relief material such as dry ration and sanitation kits, community awareness and sensitization, setting up health camps and isolation facilities, rescuing stranded labor, provision of direct cash transfers, to offering rehabilitation of the distressed communities. While most of the surveyed NPOs have received additional funding specific to COVID-19, about a third have not received additional funding and are using their programmatic funding to finance relief work. NPOs raised concerns over increased costs of core operations during relief efforts, which are not adequately covered by the relief funding.

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. Realizing the critical need for digital technology adoption in the post-COVID-19 world, a few NPOs have started investing in digital skills.

We asked NPOs for how many months they can cover their fixed costs with funds they already have on hand. Of those that responded, 54 percent can cover fixed costs for a year while 16 percent can cover costs for even longer. Worryingly, 30 percent can cover only six months or less. Organizations reported considering drastic measures including suspension of core programs and trimming down team strength if funding is not forthcoming.

Implications for Funders

Encourage your partner NPOs to speak freely and be transparent about available funding and priorities.

Embrace flexible funding to help NPOs traverse current challenges. NPOs can use flexible funds as working capital, for capacity building, to rebuild their regular work, and to build resilience in the longer term. New approaches to accountability will be needed.

Extend timelines and commitments, and adjust expectations, given the disruption in operations, and work with NPOs to revisit program strategy and priorities.

Invest in digital capacity and infrastructure. Funders and ecosystem stakeholders should invest in building capacity and inadequate digital infrastructure; and co-create new ways of digitally delivering programs without excluding marginalized communities.

Increase investment in, and attention to, livelihoods creation and re-skilling at the grassroots level. With millions of former migrant laborers back in villages, new livelihood opportunities need to be created and economies of low-income communities rebuilt.

Provide non-programmatic core institutional funding. Many NPOs struggle to cover their overhead expenses, which may not be covered by programmatic grants and relief-work donations. Funders should consider ways to support these requisite administrative needs.

Strengthen NPO capacity to raise resources. Beyond funding programs, donors should actively support NPOs to build their fundraising, communications and campaigning capacities.

Create a collaborative emergency corpus of Indian philanthropists that can offer blended finance options to support immediate disaster relief, post-disaster recovery, and building resilience in the long-term.

Continue to support regular programs. Though the COVID-19 crisis has demanded an ‘all-hands-on-deck’ approach, it is critical to be mindful of the social problems that persist and may worsen during the crisis.

Encourage NPOs to build stronger, more agile and responsive networks to ensure the sector can shape the policies that affect it and the constituencies it serves. The philanthropy ecosystem should offer financial and non-financial support for such sector bodies.