The COVID-19 pandemic and the following economic crisis has significantly impacted small businesses, including making and manufacturing firms, but also the nonprofit sector that supports them. Often overlooked in recovery conversations, most nonprofit organizations are experiencing a decline in revenues and an exponential increase in demand for services, forcing them to change their operations. The financial challenges are also responsible for the shortage of labor and technological infrastructure, limiting nonprofits’ ability to work remotely and ensure that they serve the at-risk populations.
In a webinar hosted by the Urban Manufacturing Alliance (UMA) and the Initiative for Competitive Inner City (ICIC) welcomed nonprofit partners and alumni of the Goldman Sachs 10,000 Small Businesses (10KSB) program, and other manufacturing service providers, to address the challenges and shifting needs of the nonprofit sector due to COVID-19. The panel discussed issues like: How can nonprofits build organizational resilience to support small businesses? How can nonprofits adjust their business and revenue models in times of crisis? How can nonprofits ensure that the communities they serve have access to market resources? The panelists also talked about the benefits of programs such as 10KSB and investments from Community Development Financial Institutions (CDFIs) to support nonprofits during recovery.
This event featured Steve Heath from FabNewport in Newport, RI; Robin Haynes, Business Advisor for the 10KSB program in Baltimore; Shawn Thomas from Bridgeway Capital in Pittsburgh; and Lee Wellington and Katy Stanton from the Urban Manufacturing Alliance; and was facilitated by Sonia Moin from the Initiative for Competitive Inner City.
KEY TAKEAWAYS
Aligning nonprofit services with the changing needs of the businesses due to COVID-19. During the COVID-19 pandemic, manufacturers that produced medical supplies, personal technology devices, home improvement products, and others experienced a sharp increase in their sales.
Meanwhile, other manufacturers — both those deemed less “essential” and those with existing vulnerabilities — had to restructure their business models due to the sudden change in the market. These adjustments called for a matching shift in the role of nonprofit practitioners that served these businesses. Lee Wellington, Founding Executive Director of the Urban Manufacturing Alliance (UMA), called out that nonprofit practitioners are in a “chaotic place” because they need to explore new ways to support businesses while maintaining their own resilience in an increasingly uncertain world. Lee added that nonprofits need to offer all types of entrepreneurial support services, perhaps fundamentally changing the way they operated before COVID-19.
FabNewport’s adjustments lend a clear example: Steve Heath, Founding Executive Director of FabNewport, a community-based, nonprofit makerspace and learning studio, stated that their organization created a rapid response team, distributed electronic kits to teach coding to students, and set up a 3D printing farm to produce face shields.
“Nonprofits need to get out of their lane” – Robin Haynes. As nonprofits continue to adapt to a new reality, they need to build unlikely partnerships and change old practices and processes to get new results. Lee pointed out that most nonprofits tend to play it safe to mitigate their own risk. However, at the time of a crisis where the United States is facing twin pandemics in the form of COVID-19 and systemic racism, nonprofits need to work with communities they have never worked before and develop new ecosystems. For example, UMA helped to organize a workshop series led by the National Academies of Sciences, Engineering, and Medicine (NASEM) to address the STEMM workforce changing needs due to the pandemic. This was a brand new partnership, and the workshop gave an opportunity to broaden the manufacturing and entrepreneurship sector by bringing together workforce training organizations, educational institutions, and policymakers. Similarly, a makerspace from Detroit called Pony Ride now partners with their local Boys and Girls Club, creating a pathway between the makers and community-based organizations, and stimulating new local economic development potential.
Adding to the challenges, Robin Haynes, Business Advisor for the 10KSB program, stated there is a severe shortage of funding in the nonprofit sector, making it difficult to attract and engage donors. She urged nonprofits to rethink why they exist and stay consistent with their efforts to stand out in a pool of organizations going after the same funding but echoed that these unlikely partnerships can fill the gaps between nonprofits and businesses while adding capacity and creativity to solve complex problems. Lee confirmed, adding that “the scarcity of development dollars is a silver-lining because nonprofits are forming coalitions to work collaboratively.”
Nonprofits should leverage existing economic development services to build their own resilience.
It’s well-documented that while the federal government has released economic relief and stimulus packages, many reports indicate that nonprofits and small businesses (particularly those owned by people of color) missed out on these opportunities due to inequitable lending practices or because they are disconnected from traditional lending partners. In this case, nonprofits can play a connecting role between the communities they serve (i.e. small businesses) and lending institutions. But further, as they reach out to CDFIs and leverage existing programs like 10KSB to help small businesses with operational challenges — they themselves should consider relying on these partners to build their own organizational resiliency. For example, Shawn Thomas from Bridgeway Capital in Pittsburgh recalled that Bridgeway engaged other partners to create funding solutions and technical assistance resources to specifically help nonprofits – not just small businesses. Shawn also encouraged nonprofits to “not be afraid to take risks,” citing that many lenders offer hands-on TA to reduce risk for borrowers. Steve from FabNewport also related that he was able to rely on his 10KSB alumni peers for support and morale boosting — not to mention the skills he learned during the program. These are the kinds of solutions that are often marketed towards small businesses, but can be just as effective for nonprofit organizations. Overall, nonprofits are well-positioned to keep their communities well-informed about the available resources, but should not exclude themselves from taking advantage of those same resources they connect communities to. This way, nonprofits can work to ensure that they remain present and reliable to the businesses and communities they serve, even during disruptions.