UC student reveals insight into pandemic’s effects on nonprofits

During the Better Together session, Hugenberg spoke directly to local nonprofits, providing them with an exploration of the economic outlook of the sector — including a national overview, a local breakdown and a summary of economic trends — in an effort to inform their business decisions in the future.

Among these trends was a significant cash increase for local nonprofits during the pandemic due to COVID-19-related stimulations, which allowed organizations to increase cash on hand to around six months compared to four months in 2019.

Hugenberg also found that fundraising expenses decreased by nearly 45%, but fundraising income only decreased by 9%, demonstrating that while nonprofits were spending less on fundraising, they were still able to maintain significant donations.

“Annie demonstrated careful and insightful work on advancing our understanding of the region’s nonprofit sector,” Jones said. “She discovered that nearly 500 501c3s are started every year — illustrating the dynamic nature of this part of the economy — but also suggesting that more collaboration and partnership is needed among various organizations.”

Part of that dynamic nature will undoubtedly be affected by AI technology, an emerging disruptor of the labor market.

In her presentation, Hugenberg explained how AI will inevitably impact employees' responsibilities in the workplace as it replaces some of the tasks they previously completed and encouraged nonprofits to consider how they might adapt to this change.

“Annie's deep dive into the economic outlook of the nonprofit sector and the impact of AI technology was incredibly informative and provides valuable context for future planning,” said Christie Brown, CEO of OneSource Center for Nonprofit Excellence.

Sponsored by Digital Futures, a facility for interdisciplinary research, Hugenberg’s research aligns with its mission of solving problems that matter.

She found that the nonprofit sector is a significant contributor to the economy and plays a crucial role in addressing social and environmental issues — but its organizations often face financial challenges that can hinder their impact.

"The core issues that we've discussed throughout my study of economics include many social inequity issues that nonprofits fight to solve," Hugenberg said. "Nonprofits can have the power and the drive to change the world, but oftentimes, smaller-scale organizations do not have the same resources that for-profit businesses have." 

That’s where the need for economic analysis like Hugenberg’s comes in. Through her research, she has equipped local nonprofits with valuable insights that will aid them in maximizing their impact on the community and allow them to spend more time focusing on their respective missions.

Featured image at top: Annie Hugenberg, left, and Kautz-Uible Professor of Economics Michael Jones, PhD, present at the first session of the Better Together workshop series for local nonprofits. Photo/Elizabeth Benson, Leadership Council for Nonprofits