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Two-thirds of SC nonprofits say they'll run out of cash within 6 months. Some already have.

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Donated food is loaded into the back of a car at a drive-thru distribution site hosted by the Lowcountry Food Bank in July. File/Lauren Petracca/Staff

The majority of South Carolina's nonprofits may have only months left before they run out of funds as the economic downturn brought on by the coronavirus pandemic continues to eat away at revenue and creates an increased demand for some of their services. 

Almost two-thirds of the nonprofits expect to survive for six months or fewer without additional aid, according to a survey from Together SC, a statewide organization for nonprofits, and the College of Charleston's Riley Center for Livable Communities. 

About 5 percent of the respondents said they are out of cash now, and 29 percent said they have enough for another three months. 

A total of 566 nonprofits responded to the survey, which was sent out on Sept. 1. The groups represented span the state and have operating budgets that range from less than $50,000 to more than $10.1 million. All nonprofit sectors participated. 

Comparing two of those sectors — arts organizations and human services groups, like food banks and homeless shelters — shows major differences in how the pandemic is affecting specific types of charities. 

Almost 85 percent of arts and culture organizations said they've seen funding decrease since the pandemic hit South Carolina. Of human services organizations, more than a third have seen their funding increase. 

Bob Kahle, associate director at the Riley Center, described that as a "hierarchy of needs effect": Groups that meet a community's basic necessities, like food and shelter, are getting more financial support, but the need for their services has also increased. 

Of the human services organizations surveyed, 66 percent said they have seen demand for their services go up during the pandemic. 

The "single greatest need" among the state's nonprofits right now, per the report, is cash to meet operating needs due to lost revenue.

Of the 287 groups that said they need cash to survive through the end of the year, 209 were able to provide usable estimates of how much money they need. Combined, the total was more than $61 million, or nearly $300,000 per organization.

That's specific just to the portion of the survey sample that could provide a dollar amount, Kahle noted, meaning a far greater sum would be needed to save most of the nonprofits at risk of closing. 

One respondent, which was not identified since participants were promised anonymity, wrote about concerns for the long-term effect this period will have on the organization's viability. 

"We can use loans to get through this year but going into next fiscal year with significant debt and anticipating that we will continue to be restricted in our capacity to earn income is concerning," the group wrote. 

Questions about sustainability "are on the minds of all of our nonprofit leaders," Kahle said.

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While some human services organizations, such as food banks, are seeing higher levels of donations now than they did before the pandemic, allowing them to meet the greater demand for their services, it's not clear how long that can be sustained — or if the donations bump will fade faster than the heightened need for their services.

Philanthropy will help, but it's "not going to be enough," said Madeline McGee, president of Together SC. Nonprofits are going to need support from the state and federal government to stay afloat, she said. 

McGee pointed to places like the Children's Museum of the Lowcountry — the executive director there, Nichole Myles, has said the pandemic has "broken" its funding model — as an organization that would require a lot of resources to bring back if it's lost now.

Communities need to think about the costs of keeping a nonprofit around now compared to the time and funds it would take to revive it if it has to shut down mid-pandemic, said McGee, who was raising alarm bells months ago about the financial risks for the often short-staffed and tight-on-cash sector.

Kahle added that the "depth of desperation" nonprofit leaders are experiencing came through in their survey responses, and it's clear that the pressures of the uncertain times are weighing heavily on the state's charitable groups. 

"It's hard to read all at one time," he said of their answers. 

Hoping to end on a positive note, the survey also asked nonprofit leaders if they could identify a silver lining they've experienced during the pandemic. About 40 percent drew a blank, saying they couldn't come up with one.

But for those that did, a common theme was the ability by their staffs to adapt and be flexible. 

One said their organization realized it was well-positioned to go virtual and is  preparing to move to a smaller office that will save them "tens of thousands of dollars annually." 

The Riley Center's work with the data isn't finished, Kahle said. It plans to to take a closer look at nonprofits in rural versus urban areas, dig into more detail with each of the subsectors and figure out which organizations have adequate access to the internet. 

There was a "sense of urgency" in getting this initial report out, Kahle said, for several reasons. Nonprofits, now six months into the pandemic, are facing "cumulative uncertainty," he said. Those that received Paycheck Protection Program funding  — the federal source of COVID-19 relief most often cited by the surveyed nonprofits — have already exhausted those funds.

Based on the data, Kahle said, some of South Carolina's nonprofits will have to fold, likely "sooner than later." 

Reach Emily Williams at 843-607-0894. Follow her on Twitter @emilye_williams.

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