In summary

California’s nonprofits need the state to institute policies for contract flexibility, relief programs and access to COVID-19 funding.

By Jan Masaoka, Special to CalMatters

Jan Masaoka is CEO of California Association of Nonprofits, janm@calnonprofits.org.

In this COVID-19 crisis and economic downturn, nonprofits have never been more visible on the front lines for our communities. Nonprofit health clinics, food banks, senior nutrition programs and other essential services are working far beyond their usual capacity. But nonprofits themselves have also been hurt badly by the current crisis. 

Like small businesses, many nonprofits are suffering economically and being forced to lay off staff. Nearly one-third of nonprofits have had to cut services below 50%, and 14% have already shut down completely. If this trend continues, it means that fewer seniors will get meals delivered, it will be harder to find services for people with disabilities, our children will have fewer opportunities, and nonprofit protections of human rights will be diminished. 

One in 14 California jobs is at a nonprofit, and California nonprofits bring in more than $40 billion each year from out of state. Government counts on nonprofits to provide Californians with essential services; for example, nonprofits deliver 32% of all Medi-Cal services. To put it simply: closed nonprofits mean loss of jobs, health care, arts programs and support for local economies. 

I am the CEO of the California Association of Nonprofits, or CalNonprofits, a policy alliance of more than 10,000 organizations and the voice for the state’s nonprofit community. From Day One of the shutdown in March, nonprofits have been telling us that to continue to provide quality services during the pandemic, they need budget flexibility in their contracts with governments, relief programs for nonprofit renters and employers comparable to relief programs for for-profits, and access to federal COVID-19 relief funding. 

In an August survey by CalNonprofits, most of the 1,000 respondents said they continue to experience bureaucratic red tape and ongoing worries about not getting the kind of support they need from state government partners. Just last month in a meeting with nonprofit leaders, I heard a director say that he had finally gotten government approval to move $60 in their contract to purchase hand sanitizer. 

Without contract flexibility, nonprofits cannot quickly adapt their programs to meet the changing needs of their communities. Nonprofit leaders lose valuable time going through lengthy budget modification approval processes – time much better spent directing services where they are most needed.

Some governments implemented contract flexibility right out of the gate. In early March, San Francisco City and County and the federal government issued orders requiring their public agencies to exercise flexibility in their contracts and grants with nonprofits. Santa Clara and Stanislaus counties issued similar orders.

The state has proven more challenging.

In late March, more than 1,200 nonprofits, followed by 30 state legislators, conveyed directly to Gov. Gavin Newsom the imperative for contract flexibility, as well as for relief programs for nonprofit renters and employers and access to COVID-19 relief funding.  

We have followed up again and again since then, as our members continue to ask for our advocacy on their behalf. 

I’ve talked to nonprofits facing eviction because they can’t pay their rent. Some local governments have set up eviction moratoria for commercial property tenants, but most have not. And I’ve heard from nonprofits based in cities that have explicitly excluded nonprofits from receiving COVID federal relief funds.

A governor who supports “California for All” surely knows the importance of a vibrant nonprofit community that makes “for all” a priority. But despite our ongoing engagement with his team, state policies continue to fall short for nonprofits. Indeed, the governor’s Sept. 23 executive order extending permission to local governments to issue eviction moratoria fails to even mention nonprofits. 

California’s nonprofits, and the communities and clients we serve, deserve more. We need the governor and other state leaders to step up as nonprofits have done and to institute state policies – contract flexibility, comparable relief programs and access to COVID-19 funding – that explicitly support the vital work California nonprofits do. The wellbeing of Californians, our communities and our state economy depend on it.

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