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COVID-19 ripple effects: Uncertain economic times for human service nonprofits

“A lot of smaller to medium nonprofits are going to go out of business relatively soon without the help of public awareness,” said Pete Caldwell, executive director of Concord-based We Care, which provides mental health services for children on a contract basis with Contra Costa County. (Photo courtesy of We Care)

We all know the coronavirus pandemic currently has a chokehold on the world’s economy. But that doesn’t mean children with behavioral issues in low-income families stop needing regular therapy sessions, or frail seniors can go without delivered meals, or research into other diseases can be put on hold.

And the nonprofits that meet many of these demands are not immune to the impending financial crisis caused by the spread of the virus and the stay-at-home restrictions.

“Things are heading toward disaster on the nonprofit front,” said Pete Caldwell, executive director of We Care, (www.wecarechildren.org) a Concord-based agency that provides mental health services for children on a contract basis with Contra Costa County. He also chairs the county’s Human Services Alliance.

“A lot of smaller to medium nonprofits are going to go out of business relatively soon without the help of public awareness,” he said, as he worked solo in his office Wednesday. “Many of the human service nonprofits, which provide around 65 percent of mental health and drug-and-alcohol treatment in our county, are setting up their layoff lists.

“I’ll be laying off 10 people on Monday,” he said. “I’ve never had to lay anyone off before.”

Indeed, everything from small mental health agencies and food banks to huge international medical research groups are recalculating operations.

While not at risk of going under, JDRF, (www.jdrf.org) the Juvenile Diabetes Research Foundation — the leading global organization funding Type 1 diabetes research — is poised to lose out on millions of dollars in funding for vital ongoing research if the current curtailing of normal operations continues, said Nicole Friedland, executive director of JDRF’s Greater Bay Area Chapter.

Nicole Friedland is executive director of JDRF’s Greater Bay Area Chapter.

“Around the country, we have oodles of events every year,” Friedland said. “Here at my chapter, we have two annual major fundraising events that have been canceled or postponed. We have a large community of volunteers and supporters and they love to come together especially for our fundraising events, so we’re coming up with innovative alternatives with online auctions and other communication platforms.”

But the implications go far beyond reconfiguring social interactions.

“For us, what it really means, is the threat of losing millions of dollars of critical research funding,” she said. “It’s also deeply concerning to us that, while the shelter-in-place continues, that scientists in the middle of this kind of research — can they get in their labs to work on their cell lines and keep them alive? What if they have patients in the middle of clinical trials? Can they be put on hold? Can the results be threatened? We’re deeply concerned about these aspects.”

For smaller, local groups that provide services at the county level, the current struggle involves fee-for-service Medi-Cal contracts. Despite herculean attempts at outreach to clients through online channels, the ability for these groups to provide services — and for families to receive them properly — has been severely hindered by the stay-at-home orders. And that drop-in service delivery equates to a dramatic reduction in reimbursement, while their costs remain the same.

Caldwell urges the public to reach out to county supervisors, to call for support for nonprofits. But counties can only do so much, said Contra Costa County Supervisor John Gioia. “This is on our agenda for next week. We’re looking at options with regard to (the nonprofits’) contract payments, and also exploring what relief may exist for community-based providers in the new federal stimulus bill,” Gioia said.

Alameda County has temporarily switched to a cost-reimbursement model for March and April, which provides these groups with some breathing room. But beyond that, the future remains uncertain.

In San Francisco, the Tipping Point Community nonprofit announced it will make $1 million available to its 45 grantees to support programs for low-income families throughout the Bay Area over the next few months. And last week, S.F. city officials said the city would continue to fund nonprofits as long as possible.

Allison Staulcup Becwar, CEO of Lincoln, (www.lincolnfamilies.org) an Oakland-based nonprofit with a staff of about 250 providing youth and families in Alameda and Contra Costa counties with critical mental health services, resource connections and education programs in schools, says many nonprofits are determining if they need to lay off staff or close their doors while funding remains insecure.

Allison Staulcup Becwar is president and CEO of Oakland-based Lincoln.

“Seventy-five percent of our budget is through MediCal contracts,” she said. “We do rely on private donations and support from foundations and corporations — and they’ve really been stepping up.”

In the meantime, she her staff has had to pivot in the last week to a “telehealth” model to provide services, and she’s been highly impressed with the creativity involved.

“For instance, we have an amazing art therapy clinician who is implementing a number of innovative interventions, including the white-board feature on Zoom, so even a child who doesn’t have art supplies at home can participate in this way,” Becwar said.

Lincoln has also set up a special community-resource webpage for the crisis.

And while online tools are lifesavers in this emergency, they don’t work for everything and certainly not long term.

“Doing therapy with kids, especially with little ones where you might do a 45-minute face-to-face session in a playroom, you can’t keep a child’s attention that long on a phone call. It’s just not as effective,” Becwar said. “And in cases when we’re working with families with multi-generational trauma, it’s often hard for one member of a family to share something confidentially when other family members are sheltering in the same space.”

Plus, most of the families Lincoln serves are already teetering on the edge — working through food scarcity, financial problems — and they don’t have access to the technology to participate in online services. “We’re trying to figure out what we can do about the technology gaps such as the Wi-Fi, trying to get tablets to them, and so on,” she said.

With the added stress of COVID-19 effects — job loss, school interruption, isolation anxiety and more — many nonprofit community groups, charities, food banks and other groups expect demand for services to increase during and after this crisis.

“People will need these services more than ever, the strain of being cooped up, fear of lack, the stress on family relationships,” Caldwell said. “We have to be here when this is over,” Caldwell said. “We’re celebrating our 60th year this year, and we have to get to 61.”