Contributions of the Paycheck Protection Program to Nonprofit Short-Term Sustainability
Abstract
This article draws on literature on nonprofit resilience to hazards to explore the impact of federal Paycheck Protection Program (PPP) loans on nonprofits’ staffing, services, and financial health during the COVID-19 pandemic’s first year. Through propensity score matching with survey data collected in spring 2020 and winter 2021 from the New Orleans area, linked to publicly available PPP data, nonprofits that did and did not receive a PPP loan were matched on covariates representing critical resilience capacities pre-pandemic, allowing calculation of effect sizes for short-term outcomes. Results suggest that PPP tentatively supported nonprofit liquidity in the form of reserves, but had at best mixed results in promoting service maintenance, and did not support hiring or staff retention in excess of the non-treatment group. Despite the small sample size, these preliminary findings inform how PPP may have supported short-term sustainability and help guide future federal policy to support nonprofits during crises.
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Biographies
Steven W. Mumford studies and supports nonprofit capacity-building programs in New Orleans, particularly in the areas of equitable program evaluation and data use. He teaches program evaluation and public and nonprofit management in the University of New Orleans’ Master of Public Administration (MPA) program.
Nicole S. Hutton studies the role of agency connections in community resilience building. Her research engages nonprofit organizations across hazard types and emergency stages to identify and address contributors to vulnerability.
Stephanie M. Riegel has spent more than 30 years as a journalist in south Louisiana in addition to serving as a nonprofit leader, advocating for equitable tax policies for a New Orleans–based grassroots community organizer. She is a graduate of the University of New Orleans’ MPA program.
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Article first published online: April 20, 2023
Issue published: February 2024
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- Tracing the effect of the paycheck protection program on nonprofit capacity to sustain payroll and services during COVID‐19
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