🔒As COVID-era aid and giving wane, nonprofits seek new revenue streams for survival

The COVID-19 pandemic changed the landscape for many organizations, especially nonprofits.

Some charitable organizations stayed afloat with the help of government assistance programs, like the Paycheck Protection Program or CARES Act loans. Others saw a burst of new revenues from donors looking to help at a time of greater need for social and other services, industry experts said.

But as COVID-relief funding expires and annual giving returns to normal levels, many nonprofits are seeking to diversify and tap new revenue sources to sustain their future long term.

Camp Courant, the oldest and largest free day camp in the country, is celebrating its 130th anniversary this year. Like many nonprofits, it has had to adapt and find new ways to generate revenue.

“The pandemic really forced us to look inward and ask — what resources do we have that we can monetize,” said Camp Courant Executive Director and CEO Corrianne Gagliardi Chipello.

The organization’s solution? Turning its 36-acre Farmington property, which sits vacant except when summer camp is in season, into a year-round events venue that can be rented for corporate retreats, family gatherings and even weddings.

Camp Courant, which is no longer affiliated with the Hartford Courant newspaper, is now taking bookings and has some events planned, with rates that vary based on usage.

“Every dollar raised through rentals goes right back into funding our core mission of providing a free summer camp experience for Hartford kids,” Chipello said.

The camp daily serves 750 Hartford children ages five to 12 — providing free transportation to and from the property, as well as two meals and a snack per day — offering more than 50 educational programs and activities, ranging from swimming and yoga to lessons on personal finance, gardening and how to make healthy choices, Chipello said.

It costs about $100 per day, per camper. “So, with 750 campers, we have to raise a lot of money,” Chipello said.

Camp Courant — which reported $1.67 million in revenue and a $101,748 deficit in fiscal 2022, according to a 990 tax filing — isn’t alone in its efforts to diversify revenue streams. Other nonprofits are launching social enterprises or business ventures that generate earned income.

The Hartford Foundation’s Social Enterprise Accelerator program has helped 24 nonprofits like Camp Courant develop and implement new revenue-generating business ventures over the past few years.

“Nonprofits are realizing they can’t rely solely on donations and grants anymore,” said Meher Shulman, associate director of the nonprofit support program for the Hartford Foundation, the state’s largest community chest with more than $1 billion in assets. “Social enterprises allow them to diversify their revenue streams in a more sustainable way.”

The accelerator includes an intense, months-long training that helps nonprofits develop and implement business plans to boost revenue and heighten their mission impact, with guidance from national consulting firm No Margin, No Mission.

Since the launch of the Hartford Foundation’s accelerator program, participating nonprofits have collectively generated more than $8 million in revenue from their social enterprise projects, Shulman said.

For example, Glastonbury-based nonprofit the Connecticut Data Collaborative in 2022 launched its CT Data Strategic Planning venture, which offers coaching and education services to organizations looking to improve their data infrastructure and analysis. The service has generated $1.2 million in revenue to date, according to the Hartford Foundation.

Also, Hartford-based nonprofit Health Equity Solutions established a new consulting firm that offers health equity training to agencies, healthcare systems and others. Since launching in 2022, the venture has generated more than $1.3 million in revenue.

Unionville-based New Horizons Inc. in 2019 launched its Sunshine Wheels Transportation program, providing non-emergency medical transportation to individuals with mobility issues, bringing in almost $1.75 million in revenue.

Chipello, of Camp Courant, said finding new revenue sources is the only way to survive the current climate.

“Inflation has affected everybody, we are no exception, and that has made the scope of fundraising quite difficult,” Chipello said. In tough economic times, charitable giving is often the first item cut from budgets, she said. “And being that we are totally donor-driven, we are seeing the effects of that for sure.”

She added: “And beyond that, finding stability and sustainability within your organization, where you’re not just counting on outside funds that may or may not come,” is key.

Charitable challenges

Charitable giving has been challenged coming out of the pandemic.

In 2023, giving by individuals, bequests, foundations and corporations declined by 2.1% when adjusted for inflation, according to the Giving USA Foundation’s annual report on philanthropy.

Overall, U.S. charities raised $557.2 billion in 2023, which was up 1.9% from a year earlier, thanks to stronger-than-expected stock market and GDP growth. But that increase didn’t outpace the U.S.’ higher-than-average 4.1% inflation rate, the report found.

In 2022, there was a rare decline in total giving, according to Giving USA.

“Americans increased their giving (in 2023) over the previous year despite the elevated cost of living and headlines warning of a possible recession,” said Josh Birkholz, chair of the Giving USA Foundation. “We’re not yet back to the highs of pandemic-era giving, but there are some signs of stability.”

One key nonprofit revenue stream — fundraising events — has rebounded from the pandemic, but they have a different look and feel, said Lisa Wills, an audit partner specializing in nonprofits for Hartford-based accounting firm Whittlesey.

“Your traditional galas and big gatherings have perhaps gone by the wayside because of COVID, but we’ve been seeing some different types of events,” like smaller and more casual gatherings such as bingo nights, online auctions, and wine, beer or spirits tastings with food trucks, she said.

These types of fundraisers aim to attract a new generation of givers, Wills said.

“Ten, 20 years ago you had high-level donors — you knew who your big community donors were, but that population has aged out,” so attracting younger donors is also a key focus for foundations and nonprofits, she said.

Whittlesey has roughly 400 nonprofit clients in Connecticut and western Massachusetts, with revenues ranging from $1 million to $100 million, Wills said.

Another trend is toward donor-advised funds, which are designated for a certain group or cause, instead of unrestricted funds, which can be used at a nonprofit’s or foundation’s discretion.

Arming nonprofits with the tools to launch and run a business allows them to generate their own unrestricted funds, said Shulman, of the Hartford Foundation.

Nonprofits are also using social media and smartphones more frequently not only for capital campaigns, but to highlight their organizations and the community services they provide, Shulman said.