Examining Nonprofit Financial Condition and Resiliency Strategies in Response to COVID-19

Abstract

Nonprofit organizations play a vital role in the provision of services. While many turn to nonprofits for help during crisis, nonprofits often find themselves confronting various funding challenges in uncertain and turbulent circumstances. Previous studies have analyzed how financial indicators predict nonprofit vulnerability. However, very few studies have considered the influence of financial condition on nonprofit response strategies and resiliency in financial distress periods. This study examines how nonprofit financial condition influences responses to financial shocks caused by the COVID-19 pandemic. Using a convenience sample of responses from medium and small-sized nonprofits in the Midwestern area, coupled with NCCS Core-File data, this study shows that financial condition affects nonprofit response strategies as well as their ability to secure additional funding and hire more staff in the absence of volunteers. This study offers important implications for our understanding of the relationship between the financial condition of nonprofits, their response strategies and nonprofit financial resilience.

Keywords

• financial condition resilience, nonprofit, response strategies, COVID-19