Surviving the crisis: NGOs’ financial adaptation during the COVID-19 pandemic

Demand for NGO services typically increases during crises. However, a new study led by Lithuania’s Kaunas University of Technology (KTU) finds that the coronavirus pandemic has had a different impact on NGOs working in Lithuania, Croatia, Poland and the UK. . Although some NGOs were financially successful, this often meant streamlining their operations. It can disrupt their programs and harm their non-financial results.

During economic, political, or other crises, nongovernmental organizations (NGOs) often find themselves in increased need of support and assistance. However, the recent global crisis due to the COVID-19 pandemic has brought unexpected challenges to NGOs. Government restrictions on movement have hindered the implementation of activities and the provision of certain services. Additionally, despite the increased demand for NGO services, organizations are facing funding challenges as some of their usual funding methods have become impossible.

“For these reasons, some organizations have decided to ‘wait out’ the difficult period, thinking that things will soon return to ‘normal’. On the other hand, there are some companies that have managed to continue their activities and improve their financial performance,” says Dr. Šwieša Leitniene, a researcher at the KTU School of Economics and Business.

She explained that examining these success stories was the main objective of the study, carried out by an international research team from universities in Lithuania, Poland and Croatia, and published in the journal Modern Economics. Scientists believe that understanding the solutions that have helped NGOs successfully raise funds and operate during the COVID-19 pandemic will help them prepare for future crises. I think it will be very useful.

NGO uses lessons learned from COVID-19 to fundraise for Ukraine

She says NGOs work to advance the interests of society by focusing on issues and needs that cannot be addressed by government or the corporate sector. This makes the work of NGOs even more important during difficult times. However, Dr. Leitnyene added that during times of crisis, NGOs also face particular challenges, such as obtaining additional funding.

“It is important to investigate how NGOs coordinate their activities and overcome the challenges they face.Unlike most studies in this area, we focus on examining success stories. Our focus is on finding out how and what solutions NGOs have been able to use to raise funds during the COVID-19 pandemic. , activities can be carried out successfully,” explains Dr. Leitniene.

She believes the findings may help NGOs prepare for future crises. According to KTU researchers, NGOs’ flexibility, including the ability to obtain additional funding by working closely with governments, founding companies and donors, and by implementing joint projects with other NGOs, makes them resilient. It is said that this is an important indicator of the

“For example, virtual fundraising, introduced during the COVID-19 pandemic, has been successfully used to raise funds to address issues related to today’s war in Ukraine,” says Dr. Leitnyene.

Success factors include collaboration, virtual fundraising, and promotion.

The study analyzed 240 NGOs from four countries: Poland, Lithuania, Croatia and the UK. Each country contributed 60 organizations to the survey sample. This study focused on comparing revenue between two time periods (2019 and 2020) to determine the financial impact of the COVID-19 pandemic on organizations.

We used a combination of content analysis of NGO financial reports and statistical methods, including logit regression, to establish changes in funding models and critical success factors, as well as their interrelationships.

The study reveals that although some NGOs have managed to achieve better financial results, i.e. by keeping funding at the same level or even increasing it, they are still falling short of their targets. It became.

“This does not mean that NGOs did less work and received more funding. It simply means that NGOs carried out other activities or did so in a different way than planned.” A researcher at the Faculty of Economics and Management of the National Teachers Union explains.

She said many financially successful NGOs had linked their activities to social issues caused by the COVID-19 pandemic, rather than focusing on their previous objectives. Furthermore, it was not always possible to move activities online and the quality of previous services and advice could not be guaranteed.

The study found that the main factors that contributed to NGOs’ financial success during the COVID-19 pandemic were: working with the government to take on additional projects, working closely with the organization’s founders, and virtual We conduct fundraising and promotional activities, collaborate with other NGOs, and combine resources to implement joint projects.

Being transparent helps build public trust

KTU researchers found that the development of the NGO sector and the availability of its data varied widely in the countries selected for the study.

“Strong and competitive NGOs are a sign of a vibrant civil society. Public trust and engagement in NGO work is critical to the success of these organizations,” says Dr. Leitniene.

Citizenship and activism, as well as NGOs, are slowly gaining ground in Lithuania. In the World Giving Index Rankings 2024 report, Lithuania is ranked 139th, Poland 142nd, Croatia 137th and the UK 22nd. Dr. Leitniene believes this may be due to differences in historical circumstances, funding opportunities, and cooperation between NGOs and the governments of the selected countries.

“One thing we can learn from British organizations is to increase the transparency of NGOs by encouraging them to make financial and non-financial information publicly available,” the KTU researchers said, adding that in Lithuania they found that There is no information even on the number of NGOs operating in the country, and many NGOs do not provide sufficient information about their activities.

“By increasing transparency, NGOs will contribute to increasing public trust and engagement in their work,” says Dr. Leitnien.