Long known for its remarkable number of locally based nonprofit organizations per capita, Pasadena — with a reputation for showing its big heart and sharing charitable assets — may soon also be recognized for something else: resilience.
Resilience among nonprofit-sector dynamos and the donors who support their causes, and in the optimism that, together, they can make a difference in the lives of those less fortunate, who’ve been especially battered by the cascading effects of the coronavirus pandemic.
“Nonprofit organizations are the pillars of Pasadena. Although it’s been a tremendously difficult year and will continue to be a complicated picture ahead, I remain optimistic that this community is very dedicated to its nonprofit sector,” said Pasadena Community Foundation President/CEO Jennifer DeVoll. “The great thing about people here is that they are very generous. They give because it’s in their DNA and deeply feel the Pasadena value of giving back.”
Job losses and reduced wages, particularly among the already underemployed, have widened the divide between the thriving and the disadvantaged even more, and nonprofits have responded in force, tripling food distribution and delivering to homebound seniors and those who are medically fragile or in quarantine. Other agencies have deftly modified operations to better serve their communities: Educational support services have morphed into multipronged virtual programs that include phone calls, texts and technical support with hot spots and data plans; health-services nonprofits have embraced the age of telehealth and outdoor and virtual therapy, while others have thrown everything they practiced out the window as they simply strive to keep clients from eviction.
“I feel proud of our community and all the collaborations that I’ve witnessed take place, as well as the innovation our nonprofit leaders have shown under tense circumstances,” said DeVoll, noting that PCF had long planned for a rainy-day disaster relief fund.
PCF, which is dedicated to managing charitable assets and earmarking money to nonprofit organizations of all kinds, was at the ready earlier this year to distribute emergency grant funds. Initially, it focused on bolstering organizations that serve seniors, distribute food and supplies to the homeless, low-income individuals and families, and provide other essential services.
“Unfortunately, California has had a lot of other kinds of disasters over the years — fires, mass shootings, earthquakes — we always thought the next one would be an earthquake. So we’ve learned from other community associations over the years, and we had emergency disaster planning in place already,” DeVoll noted, adding that PCF has leveraged all of its grant-making resources to support Pasadena’s nonprofits during the pandemic.
“We are mobilizing our resources and relationships,” DeVoll said. “We are balancing the immediate needs with the knowledge that this crisis will have a long tail.”
After launching its COVID-19 Response Fund in March, PCF doubled down on its mission to provide relief to those at risk by “addressing current needs unmet and future needs unforeseen in Pasadena.” PCF ultimately directed $2.6 million in grants to organizations on the front lines of the pandemic and to provide local relief and support. It also teamed with the city to allocate $500,000 for numerous $10,000 grants to small businesses struggling to stay afloat.
“There has been so much good news out there in the face of the pandemic,” DeVoll said. “In the wake of all this, the city has stepped up to do its part, and the adaptability of the nonprofits to change course, work from home, reorganize offices — all of that in addition to managing their clients and the people they employ who also were suddenly affected. These nonprofit workers are all people who’ve had their own trials and tribulations, like home schooling or caring for an elderly relative. They’re truly amazing people. They are our first responders too.”
NONPROFITS AS AN INDUSTRY
Pasadena’s nonprofit sector had been strengthening since the economic crisis of 2008 — during which there was some consolidation, mergers and shuttering — and there have been a lot of lessons learned since then, according to the California Association of Nonprofits, a statewide policy alliance of more than 10,000 organizations. Nonprofits have made concerted efforts to streamline services, operate efficiently and spend money wisely, as well as increase their advocacy work among local government agencies, which can lead to additional funds or collaborative programming, said CalNonprofits outreach and communications director Christina Dragonetti.
The coronavirus crisis, in particular, has kicked advocacy into high gear, she said, adding that CalNonprofits works “in the intersection of where the public, nonprofits and legislation meet.”
“The pandemic has been an awakening for many nonprofit folks. They’re directly seeing the impacts, seeing and feeling the crisis deeply in their communities as well as in their own organizations,” she said. “Some may be on the brink of closing; some have extreme need and they cannot meet that demand, others need funding just to pivot operations, which is tough when funding streams dry up or are put on pause. A lot of nonprofits are dipping into reserve funds. Everybody is very concerned and worried about not knowing how long they can continue in this climate.”
Prior to the crisis in March, CalNonprofits released its 2019 Causes Count report, a comprehensive economic impact study of California’s nonprofit sector, which follows its first-ever such report in 2014 — providing baseline data on nonprofits as an influential industry in a state whose economy is now ranked the fifth largest in the world (up from eighth in 2012).
Among many things, the 2019 study found that nonprofits continue to grow as an economic power: One in every 14 California jobs is at a nonprofit organization, and more than 1.2 million people are employed by nonprofits across the state, accounting for 7% of all employment. The nonprofit sector’s workforce is more diverse by gender and race/ethnicity compared with the adult civilian workforce as a whole. Volunteers contribute about $16.6 billion in unpaid labor each year, the equivalent of 331,058 full-time jobs, most of it in direct work with people, animals and the land. Meanwhile, nonprofits bring more than $40 billion into California each year from out-of-state sources — including the federal government, out-of-state foundations and individual donations from around the world — generate $273.7 billion in annual revenue and hold $436.7 billion in assets.
In Los Angeles County, including Pasadena, there are 22,626 active nonprofits, the report said, with 425,714 employees overall and 1.609 million volunteers. The nonprofit community as a whole generates $2,839 per resident, making it 12th in the state in nonprofit revenue per capita.
Above all, CalNonprofits noted, it found through its multiple surveys that Californians trust nonprofits to a “much greater degree than for-profit and government sectors.” More than 80% of Californians surveyed for the study said they “are confident that nonprofits act ethically, help people in poverty, and protect the earth, animals, and environment.”
Despite such organizations’ good standing going into the crisis, Dragonetti said her agency saw an intense surge of requests for help by nonprofits throughout the state. Suddenly, agencies were faced with operational emergencies, including how to find funding for personal protective equipment for staff members, how to apply for the Paycheck Protection Program, who could be classified as employees, and how to leverage insurance provisions if they had to furlough staff. That last quandary turned out to be a tough one, Dragonetti recalled: “Unfortunately, insurance policies don’t have provisions for if there’s a pandemic.”
NONPROFIT STAFFS ARE OVERWHELMED
The dramatic increase in need has been felt collectively among the staffs of nonprofits across the state, Dragonetti emphasized. Some are feeling the squeeze of not being able to build any earned income through revenue-based services (widely called “fees for service”), which account for about 37% of an average nonprofit’s total revenue stream. This leads to reduced hours and furloughs.
Meanwhile, other nonprofits facing a surge in need are struggling to make do with their current staffs amid a dive in the number of volunteers due to the restrictiveness of safe practices needed to combat COVID-19.
“Some nonprofits are sitting idle, and that is hard, while others are slammed by double, triple demand,” Dragonetti said. “One of the hallmarks of the nonprofits is that the work tends to be emotionally draining, and when you’re facing this kind of increase in demand plus personal hardships caused by the crisis, and increased isolation, it’s hitting everybody much harder. Some organizations can stagger work schedules, but that’s not a luxury everyone can afford.
“There is a ton of pressure on our nonprofit workers. One of the quotes from our August survey was ‘Our staff is exhausted and physically and emotionally drained.’ And there is no relief in sight for them.”
Nonprofit consultant Tisa Blackmore of Netzel Grigsby Associates has worked for years with Pasadena and Southern California nonprofits, helping to run capital campaigns and create professional development. One of her local client organizations, a retirement community, has seen increased costs of $11,000 per week just due to COVID-19 and the rippling requirements to provide weekly testing and PPE for staff and clients, as well as costs related to creating more space for social distancing and intensified cleaning.
Another nonprofit client, one that provides services for developmentally disabled children and adults, is facing permanent layoffs after temporarily furloughing staff — a move that in the long run will prove costly, as the organization has to begin hiring processes from scratch. There have also been costs for professional development among staff members who will be lost, she noted.
“It’s really sad that they’ve not been able to rehire the people they’ve furloughed because they’ve been so limited in providing their direct services,” Blackmore said. “Legally, they’ve had to let staff go by Dec. 31. It’s incredibly distressing to the executive staff as well, many of whom took pay cuts early on in the pandemic.”
A BOOST TO RALLY YEAR-END GIVING
There may be a light at the end of the tunnel, at least for 2020, Blackmore said.
She is letting supporters know that a special tax credit offers great incentives to Pasadenans to give before year’s end, and give generously.
As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the $2.2 trillion economic stimulus bill that was passed this year in response to the economic fallout of the pandemic, a one-time tax credit on charitable giving is helping incentivize donors.
According to certified public accountant Ted L. Ritchie, who works with many Pasadena-based clients and helps manage their trusts, a new $300 deduction (any donation of up to that amount can be deducted 100%) is expected to help charities rake in $100 million nationwide. There is also the bonus that charitable contributions in 2020 are allowed to be made on up to 100% of adjusted annual growth income, instead of the usual 60%.
“Even if you don’t itemize your deductions, you can take that $300 write off on your return on donations made in cash. Supposedly this will help stimulate some additional gifts, although I don’t see my wealthy clients being particularly impacted by it,” said Ritchie. “However, that $300 donation might help people who don’t regularly give; I don’t know why you wouldn’t give it if you can turn around and deduct it. The people in Pasadena are always very generous through the foundations there.”
Blackmore, meanwhile, is encouraged that giving across all of California was up by 5% in the first six months of the year, according to Giving USA, a public service initiative that measures charitable giving. It’s anticipated that there will be another 5% increase in giving in the second half of the year, she added.
Although tax incentives don’t typically drive giving, this one could make a difference, she noted, especially to those who’ve designated a certain gift spread out over several years: “People are seeing that there’s a really good reason to do something significant this year, before the end of 2020. They want to have an impact and here’s a good reason for them to accelerate their pledge payments.”
Pasadena should fare well within the big picture of contributions, Blackmore added. Over the years, she has observed donors here to be more than generous, albeit with their own particularities.
“From what I’ve witnessed in Pasadena, we are so blessed that the philanthropists have stayed philanthropists. They are giving to organizations that they trust, that they’ve been committed to for years, and they are giving above and beyond what they did before,” she said, noting that local donors here tend to stay out of the spotlight. “One thing I’ve noticed over the years is that philanthropists in Pasadena are not highly recognition driven — they don’t give because they want their name on a wall. The city is filled with quiet leaders and quiet donors, and there’s a strong desire to pass that tradition of philanthropy down to their kids and grandkids.”
She said she would love for more people to explore the current tax environment with their accountants before the end of the year, especially those who might have an IRA or other asset on which they now can draw for charitable giving without facing penalties.
“I would love to see people who didn’t know about that tax deduction turn around in the next week and give it to a cause they love,” she said. “I’m so grateful for the philanthropy I have already seen, the courage among nonprofits to move forward and keep finding new ways to serve their constituents and people in need. And the courage it takes to be a leader and give back. … There is such an instinct to hunker down and protect what you have in a crisis, but I’ve seen great courage among donors to step up and give more.”