Effects of COVID-19 on the Nonprofit Sector

This paper studies the effects of the coronavirus pandemic on the US nonprofit sector. Using a difference-in-differences framework, we leverage variation in the timing of charities’ fiscal years, finding that government intervention helped keep charities afloat during the pandemic. On average, government grants increased 66 percent in the first year of the pandemic and 82 percent in the second. Despite the net increase in their contributions, charities lost employees and made fewer program expenditures in fiscal year 2019. Although the decline in program services proved to be temporary, the pandemic has had a lasting impact on the nonprofit labor market.