Hit hard by COVID pandemic, Spartanburg County nonprofits say they need $5 million now

May 27, 2021
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SPARTANBURG, S.C. (Herald-Journal) -- Federal rescue funds that kept many Spartanburg area nonprofits afloat last year have nearly run out, and another $5 million is needed now, backers of a COVID-19 impact survey say. 

Paige Stephenson, president and CEO of the United Way of the Piedmont, recently announced the findings of a March survey conducted by Together SC, which represents more than 800 organizations statewide.

Stephenson said she's hoping that some of the $78.4 million the city and county received from the American Rescue Plan approved by Congress can be directed to nonprofits.

Not just nonprofits: Spartanburg's arts sector suffers $2M hit during pandemic, mental health service needs rise

Stephenson warned city and county leaders that without $5 million in new funds, 2% of the nonprofits already out of cash may have to close, 19% will run out of cash in one to three months, and 35% will run out within four to six months.

Stephenson said survey respondents remained anonymous, thus the identities of those in financial trouble are not known.

"You can't 'Bring Back the Burg' without bringing back your nonprofits," Stephenson said. "Nonprofits are small businesses for the most part. Just like any business on Main Street, there needs to be support of the nonprofit sector."

Mary Leven, executive director of the Spartanburg Science Center, works at the center at the Chapman Cultural Center in Spartanburg, Tuesday morning, May 25, 2021. Many nonprofits are running out of money to operate because of funding cuts and donations being down.
The United Way and the Spartanburg County Foundation, Spartanburg Regional Foundation and Mary Black Foundation underwrote the March survey. Statewide, 927 out of 3,700 nonprofits participated, and in Spartanburg County, 51 responded.

Silver lining: The Spartanburg picture is improving 
There is a silver lining, Stephenson said. The overall picture in Spartanburg has improved since last fall when 15% of 35 Together SC survey respondents said they were out of cash and 61% said they could only survive another six months without further funding.

"Considering the extreme economic disruption caused by the pandemic, the Spartanburg nonprofit organizations responding in 2021 are in reasonably good financial health," according to survey authors Bob Kahle from Kahle Strategic Insights and Madeleine McGee of Together SC. 

Both the city and county councils are developing their 2021-22 budgets right now, and officials are combing through a 150-page U.S. Treasury Department document to see how the most recent federal windfall can be used.

Spartanburg County, city of Spartanburg have $78.4 million combined in federal COVID relief funds
Spartanburg County has received $62 million and the city of Spartanburg $16.4 million in federal COVID relief funds.

Both governments must demonstrate by August how funds will be used.

County Administrator Cole Alverson said in general, the funds can be used for infrastructure projects, expenses related to the public health emergency and costs related to the financial impact on COVID-19 on small businesses and residents.

"ARP funds are intended broadly to support recovery from COVID and its effects," Alverson said. "Based on our early understanding of the guidelines, if nonprofits are supporting recovery from COVID and there are direct costs attributable to this that have not otherwise been reimbursed from other sources, they would likely be eligible, given our current understanding.

"The bigger question would be whether a reduction in revenue, reduced private support for nonprofits would be reimbursed. Given the early stages of this process and depth of federal regulations on the ARP funds, I do not think I could confidently answer that question yet."

Most nonprofits are small
The March survey said more than half of Spartanburg's respondents are operating with annual budgets of less than $500,000 and have staffs of five or fewer full-time employees.

Those most at risk are nonprofits that provide food, utility and child care costs; education, mental health needs and rental assistance. In addition, the Chapman Cultural Center needs an estimated $2 million more in funds to continue its programs without interruption, she said.

"If we're not providing those services, government is who's going to be stepping in, and it's usually at a much higher social cost and financial cost," she said.

Kathryn Harvey of Neue South Collective, a Spartanburg-based marketing firm that worked with Together SC, said many companies were forced to cut costs during the pandemic, and many people were laid off.

"Corporate dollars and individual giving have waned, and many grants have restricted funding -- they aren't covering the areas in need," she said. "Poverty has shifted during the pandemic. (Nonprofits) are now seeing middle-class folks."

"Overall, we're seeing that organizations need a significant cash injection just to make it to the end of June," Harvey said. "And while federal funding has helped bridge a gap, it's already running out."

COVID impact survey findings
Among the survey's findings for Spartanburg nonprofits:

► Mental health services saw the greatest increase in demand among 44% of respondents, compared to 21% statewide. Other areas in the state reported food and shelter assistance needs increased the most.

► 62% said they intentionally serve communities of Black, indigenous and people of color. That compares to 59% statewide.

► 89% that applied received federal Paycheck Protection Program funds, and 74% received CARES Act funds. 

"This governmental support is likely a reason for the relative financial health of nonprofits in Spartanburg," the survey states.

► 36% said the fund application process was too complicated.

► 75% said they witnessed a silver lining, or positive impact, from managing through the pandemic. That is an increase from 68% from the fall survey.
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