Building Adaptive Capacities: Lessons from Wisconsin Nonprofits' Responses to COVID-19

• In Event: NGOs’ Resilience Strategies During Crisis

Abstract

While numerous studies have documented the importance of adaptive capacities in enabling nonprofits to respond to unexpected crises and maintain service provision (Mosley et al., 2012), there is a handful of studies explaining nonprofit responses to the disruptions triggered by COVID-19 and factors influencing nonprofit capacity to effectively adapt to changes in their working environments during the pandemic.

The literature on nonprofit responses to external pressures suggests that effective adaptation to changes in the operating context requires financial reserves and flexible funding (Searing et al., 2021). Nonprofits with slack resources are more likely to continue delivering their services after the initial impact of the crisis. However, the availability of slack resources alone is insufficient for sustaining nonprofit services during an extended revenue shock, as nonprofits may need to adapt their programs, services, or organizational structure to the crisis context (Herrero & Kraemer, 2022; Hutton et al., 2021). Research has shown that various factors, including resource availability, leadership, and strategic planning, influence adaptive capacity in nonprofit organizations. Some studies have found that nonprofit organizations with more diverse revenue streams and a greater capacity for financial management can better adapt to changes in their external environment (Bowman, 2011). Other studies have highlighted the importance of leadership experience and skills in promoting adaptive capacity in nonprofit organizations (Vito et al., 2023).

This study aims to contribute to a better understanding of nonprofit adaptive capacities by examining whether a lack of knowledge in technology, crisis planning, and HR management intensified sustainability concerns among nonprofit leaders regarding keeping employees and providing services to vulnerable populations. The study also assesses how sustainability concerns are influenced by financial capacity, board preparedness, and nonprofit dependence on government funding.

The study findings are derived from the analysis of survey data collected from 220 Wisconsin nonprofits in April 2020. The regression results show that fiscal capacity, board preparedness, and dependence on government funding were positively associated with the ability of nonprofits to adapt to the crisis conditions. In contrast, a lack of knowledge in crisis planning, HR management, and the use of technology incited concerns among nonprofit leadership about their inability to sustain employees and reach vulnerable populations. These findings have several implications for nonprofit practice, suggesting that nonprofits should prioritize building their fiscal capacity and developing boards prepared to lead through crises. Nonprofits should also invest in building their knowledge in crisis management, HR management, and the use of technology. Doing so will enable nonprofits to better adapt to unexpected crises, maintain service provision, and serve their communities over the long term.

The study makes a threefold contribution to the field. First, it provides empirical evidence on the factors that influence the adaptive capacities of nonprofit organizations in response to the COVID-19 pandemic. Second, the study’s results emphasize the effective strategies for fostering nonprofit sustainability in the face of unexpected challenges. Third, the study findings provide insights for policymakers and donors to develop policies and programs that will support nonprofits in building their adaptive capacities and ensuring nonprofit sustainability.

References

Bowman, W. (2011). Financial capacity and sustainability of ordinary nonprofits. Nonprofit Management and Leadership, 22(1), 37-51.

Herrero, M., & Kraemer, S. (2022). Beyond survival mode: Organizational resilience capabilities in nonprofit arts and culture fundraising during the Covid‐19 pandemic. Nonprofit Management and Leadership, 33(2), 279-295.

Hutton, N. S., Mumford, S. W., Saitgalina, M., Yusuf, J. E., Behr, J. G., Diaz, R., & Kiefer, J. J. (2021). Nonprofit capacity to manage hurricane-pandemic threat: Local and national perspectives on resilience during COVID-19. International Journal of Public Administration, 44(11-12), 984-993.

Mosley, J. E., Maronick, M. P., & Katz, H. (2012). How organizational characteristics affect the adaptive tactics used by human service nonprofit managers confronting financial uncertainty. Nonprofit Management and Leadership, 22(3), 281-303.

Searing, E., Wiley, K., & Young, S. (2021). Resilience tactics during financial crisis: The nonprofit resilience framework. Nonprofit Management & Leadership, 32(2), 179–196.

Vito, R., Schmidt Hanbidge, A., & Brunskill, L. (2023). Leadership and organizational challenges, opportunities, resilience, and supports during the COVID-19 pandemic. Human Service Organizations: Management, Leadership & Governance, 47(2), 83-98.
 

Authors

• Erica Ceka, Governors State University

• Douglas Ihrke, University of Wisconsin - Milwaukee

• Bryce Lord, Helen Bader Institute for Nonprofit Management