Home Posts tagged Challenges
Coronavirus

Coping with a Changed Landscape

Kate Phelon says she misses her members.

Claudia Pazmany recalls the early days of this crisis, when she was bought to tears on an almost daily basis by the stories related to her by devastated business owners.

Nancy Creed says it’s become her mission to provide members with comprehensive and reliable information as they try to navigate their way through a crisis the likes of which they’ve never seen before.

Collectively, these chamber of commerce directors — Phelon in Westfield, Pazmany in Amherst, and Creed with the Springfield Regional Chamber — spoke not only for each other, but for colleagues across the country as chambers confront COVID-19.

And ‘confront’ is certainly the right word.

Indeed, as individual chambers work to keep members informed and assist them with the task of keeping the doors to their businesses open (figuratively if not literally — many of them have been ordered closed), they are in what amounts to survival mode themselves, especially since they are not at present eligible for federal stimulus money, though they’re lobbying to be included in the next stage of funding. And some of them may not, in fact, survive.

“I was on a call recently with our national association,” Creed recalled. “And they were saying that they expect 25% of the chambers not to survive this.”

The reasons for such dire predictions are obvious. Indeed, to serve their members, chambers rely on revenue from two primary sources — membership fees and events. And both are imperiled in some ways, the latter far more than the former, although overall membership and simply collecting fees that are due are certain to be impacted by this crisis.

Nancy Creed

Nancy Creed

“I was on a call recently with our national association. And they were saying that they expect 25% of the chambers not to survive this.”

As for those events, they range from the small — monthly after-5s, for example — to the large — the annual golf tournament in Westfield or Amherst’s Margarita Madness are in that category — to those in between, like regular breakfasts and legislative luncheons. Some events have been rescheduled for later in the year, but others have simply been lost, like Westfield’s popular St. Patrick’s Day breakfast — the first time it hasn’t been held in 40 years.

“At the same time as we’re worried about our members, we’re also worried about our chambers,” Phelon said. “There’s a huge concern for the chambers — we’re not having our events, which generate much of our revenue, and many of our members are really struggling.”

On March 6, the Springfield Regional Chamber staged its annual Outlook lunch at the MassMutual Center in downtown Springfield. For many business leaders in the Pioneer Valley, that was the last large gathering they attended. Everything since has been wiped off the calendar; BusinessWest has no need to publish its Chamber Corners section dedicated to listing upcoming chamber events because there are none for at least several more weeks.

But while chambers work to maintain their own bottom lines, their primary function of late has been a conduit of information to members who desperately need it.

They’re doing it through their websites and webinars, through polls — the Springfield Regional Chamber has conducted a number of them — and through conference calls with state and national leaders, during which they relay questions from their members, such as a Tele-Town Hall with U.S. Rep. Richard Neal, staged by the Springfield Regional Chamber on April 7.

Kate Phelon

Kate Phelon

“At the same time as we’re worried about our members, we’re also worried about our chambers. There’s a huge concern for the chambers — we’re not having our events, which generate much of our revenue, and many of our members are really struggling.”

Phelon said she and other chamber leaders have taken part in regular conference calls with Lt. Gov. Karyn Polito; Mike Kennealy, secretary of Housing and Economic Development; and a host of other officials. It started with one call a week, and now there are two, she noted, adding that such sessions have not only provided information to the chamber leaders, but provided them a chance to convey what’s on their members’ minds.

“They want to hear from us — they want to know what the issues are,” she said. “They take all our questions, and it’s been very helpful for us.”

Meanwhile, chamber leaders have been doing a lot of listening — and that in itself has been hard.

Pazmany said Amherst, a college town with no college students and restaurants, taverns, and museums that can’t open, has been particularly hard hit.

“It’s like summer here — only it’s far, far worse than summer,” she said. “No one needed for summer to arrive this soon; many businesses in this community have been just devastated by this.”

Overall, most chambers are experiencing what their members are experiencing — an ultra-challenging time dominated by questions that are often difficult to answer.

Plain Speaking

Since the pandemic fully arrived in Western Mass., and especially since the governor ordered all non-essential businesses to close, the primary function for area chambers has been to act as a combination sounding board and conduit for information.

And the emphasis has always been on providing information that is accurate and reliable, said those we spoke with, adding that there is plenty of news, if it can be called that, which does not fall into that category.

Claudia Pazmany

Claudia Pazmany

“It’s like summer here — only it’s far, far worse than summer. No one needed for summer to arrive this soon; many businesses in this community have been just devastated by this.”

“We’re trying, on a daily basis, to grab credible sources, and we really rely on the administration, because that takes rumor out of it — it comes straight from the horse’s mouth,” said Creed. “Our polls are just to get a pulse of the community so we can see what’s going on and pivot as we need to and gauge the sentiment of the business community — so it’s by no means scientific.”

Elaborating, she said her chamber has been partnering with other groups, such as the Employers Assoc. of the NorthEast, in an effort to inform business owners, but without overwhelming them.

“If there are other subject-matter experts out there, we want to partner with them instead of recreating the wheel,” she explained, “because there’s so much information, so much activity, that we certainly don’t want to overwhelm members — they already have enough on their plates.”

Pazmany said her chamber has created a ‘Resources for Business’ page on its website that is updated daily in an effort to help keep members informed at a time when they cannot gather in a room for a breakfast or educational seminar.

Phelon said her chamber, like all others, has been focused on providing information and connecting members to resources, which is what it has always done, except now it’s doing more of it, and that role has perhaps never been more important.

“Some chambers are putting information out daily, and we’re doing it at least weekly,” she said, adding that chambers are doing all this under unique circumstances.

“Most of us are dealing with reduced staff, some of us are working at home, some of us are in the office,” Phelon went on, noting that chambers are considered ‘essential.’ She does go into the office, but remains at least six feet away from her assistant and sanitizes the space on a daily basis.

Pazmany said her chamber, located on Main Street in downtown Amherst, has closed that office and has staffers working at home, in a nod to edicts concerning social distancing.

“We have a very small space, and we’re used to getting a lot of people in the door, and we thought that keeping the office open wasn’t the right thing to do given the circumstances,” she explained. “We like to say that, while the door may be locked, we’re open for business.”

While life has changed for chambers, it has for their members as well, certainly, and chambers are adjusting as these members struggle to keep their own doors open.

“We’re giving our members options on payments, and we’re even deferring it for 60 days,” Phelon explained, noting that many chambers are doing the same. “We understand the impact this is having on their business, and we want to be sympathetic.”

She noted that one additional challenge for chambers is that the needs of the members vary, generally with the size of the venture, and there isn’t a one-size-fits-all formula for providing assistance.

“We’ve got our very small micro-businesses that really need the help — it’s overwhelming for them; they’re struggling, and they don’t know if they’re going to make it,” she explained. “We also have major corporations that have an HR department and have significant resources, and everything in between. So it’s challenging.”

Lost Days

Beyond providing information, the other major role for chambers, historically, has been to provide networking opportunities for members. And it is this role that has been most impacted by the pandemic.

Indeed, gatherings of more than 10 people have been banned, which effectively eliminates after-5s, breakfasts, tabletop events, golf tournaments, annual meetings, legislative luncheons, and more — events staged to inform, bring members together, and generate revenue.

While some events have been pushed back or canceled altogether (like the St. Patrick’s Day breakfast in Westfield), chambers are looking to create what are being called ‘virtual networking events.’

They’re not exactly like the real thing, said those we spoke with, but they do enable people to see one another and interact, even if it’s on a computer screen, rather than in a local restaurant, golf course, banquet hall, or the showroom at Mercedes-Benz of Springfield. That was the site of a large after-5 involving a number of chambers early in March, said Pazmany, adding that, in a number of ways, that seems like a long time ago.

“We had 300 people there — it was a great event,” she recalled. “Who could believe that we’re now all sequestered in our homes?”

While looking to stage some events virtually, chambers are pushing their spring events further back into the calendar year. Phelon had a legislative luncheon slated for later this month and is now eyeing June. Meanwhile, her golf tournament, that chamber’s largest fundraiser, slated for East Mountain Country Club, was set for May, but it’s now rescheduled for June 22, with the hope that this is far enough out.

Pazmany said all of her chamber’s events into June have been canceled or moved back. Margarita Madness has been rescheduled for Sept. 24, but she’s not sure if that will work.

“We thought it was a safe date, but you just don’t know,” she said. “Every day I look at all the statistics, and I can’t tell you that date is safe.”

Creed told BusinessWest that the Springfield Regional Chamber is fortunate in several respects. For starters, it was able to stage perhaps its largest fundraiser of the year, the Outlook event, before the ban on large gatherings was put in place. Also, the chamber has reserves that it has not had to tap into as yet, and it has been able to “repurpose” staff members — its events coordinator has been shifted to member-engagement duties, for example — rather than lay them off, as some chambers have.

While the Outlook lunch went on as scheduled, the Springfield Regional Chamber has been forced to move its Fire & Ice signature cocktail event, which gave area bars and restaurants a chance to shine, said Creed, noting that it was scheduled for March. The next large fundraiser is the Super 60 event, which is scheduled for mid-fall and thus has not been impacted yet.

“Our events are so diversified that, if we lost one, we would still be in good shape,” she noted.

It remains to be seen if other chambers can say the same.

Spreading the Word

Summing up the situation for the business community and the chambers serving it, Phelon again spoke for all her colleagues.

“We’re all feeling … I wish I knew the right word; we’re all feeling the pressure and the concern,” she told BusinessWest. “We’re trying to stay positive, too, thinking ‘this will pass.’ But there are so many unknowns. This is unprecedented.”

It is, and for chambers, it’s an extreme challenge that comes when they already had their full share of challenges.

Like their members, to come out on the other side, they’re going to have to be resourceful, persistent, and willing and able to find new ways to do business.

George O’Brien can be reached at [email protected]

Coronavirus Cover Story

On the Home Front

On one hand, it’s good to be working — many people during the COVID-19 crisis have lost their jobs. However, those who continue to clock in every day, only from home, often face challenges they never had to contend with before, from balancing work with their kids’ education to the anxiety and loneliness that can accompany a lack of face-to-face contact. But that’s today’s new normal, and no one can predict for sure when people might start heading back to the office.

As the office manager at Architecture EL in East Longmeadow, Allison Lapierre-Houle has plenty to do, but enough time to do it. Usually.

“I handle all the administrative tasks — anything HR-related, financial-related, pretty much everything outside what the architects do,” she said, adding that she’s never had to work outside her set hours — until recently.

“Now, I’ve been working on weekends a little bit, at night a little bit, because I have to take constant breaks in between for homeschooling, and all of the distractions that come with running a house and doing my job at the same time.”

Like so many others right now, Lapierre-Houle is still doing that job, only she’s doing it from home — as a single mother of a first-grader and a third-grader, ages 6 and 9.

While the school provides a remote learning plan that students are expected to follow, and daily assignments to complete every day using Chromebooks and Google software — as well as Zoom meetings with classmates — children that young aren’t exactly self-directed, she noted.

“If they were in high school, it would be completely different. In first grade, she literally just learned to read, and now she’s expected to go on the Chromebook and complete assignments. So I do lot of side-by-side work with the kids, while also trying to manage the eight employees for the company, who are all working remotely as well. That’s been the biggest challenge.”

Allison Lapierre-Houle to balance working at home

It’s challenging for Allison Lapierre-Houle to balance working at home with two young kids — but at least they can help take a photo for BusinessWest.

David Griffin Jr., vice president of the Dowd Insurance Agencies in Holyoke, is able to split the child-tending duties with his wife, who works for Travelers in Hartford. They’re both home these days, juggling their jobs and home responsibilities as parents of two young ones, ages 2 and 3.

“We’re making the most of it,” Griffin said. “She has a more set schedule than me. Obviously, I have clients calling me, and I can’t plan when the client calls me with questions I have to go through. I get as much done as I can in the morning and late at night, and answer calls and help customers throughout the day. Right now is their greatest time of need, so I have to make myself available and be there for them to lend an ear and give some advice.”

Jim Martin knows that feeling — of working from home at a time when customers have more pressing needs than perhaps ever before. As a partner at Robinson Donovan specializing in corporate law and commercial real estate, he’s been working with clients on their submissions for the Paycheck Protection Program, deciphering the regulations and grappling with an ongoing series of often-confounding changes to them. “My clients need straightforward legal advice on what needs to be included,” he told BusinessWest.

“I do lot of side-by-side work with the kids, while also trying to manage the eight employees for the company, who are all working remotely as well. That’s been the biggest challenge.”

He’s providing that advice — and much more — largely from home, as the firm’s Springfield office is maintaining the core minimum of personnel needed to connect everyone else during a trying time.

“We were well-prepared for this; we had anticipated this may be necessary, so we had a network in place that allowed people to remotely access their desktops from home,” he explained. We got everyone equipped, so when someone comes in with mail, it’s scanned and distributed to every lawyer and the support staff. And we have remote dictation, so I can dictate right to my adminstrative assistant from home. We feel we were pretty well-prepared to make the transition to working remotely.”

While Martin doesn’t have children at home, he empathizes with those who do, as day cares are closed and people generally can’t come by to babysit.

He does, however, sometimes have to vie for the landline with his wife, a clinical doctor of psychology who continues to see patients, who are dealing with all sorts of issues, from depression to anxiety to domestic violence, all of which can be exacerbated by the current health and economic crises.

“People who need therapy, they need it more now,” he said. “She fortunately has access to certified confidential means of communication, video communication and things, but sometimes it’s over the phone if folks don’t have technology. So, I’m in one room, she’s in another, and sometimes it’s stressful in the house.”

Workers from most sectors are dealing with the same situation — doing their part to keep their companies afloat while often keeping a household together. But they’re recognizing something else as well — a general patience and understanding among those they deal with, and a recognition that we’re all in this together, even as people grow more anxious to get back to their old routines.

Alone Time

Before COVID-19, Seth Kaye, a Chicopee-based photographer, would get up each morning and go to his office to work and have meetings with clients.

“For me, that’s the biggest difference right now, just not being around people at all,” he said. “I would routinely have coffee breaks or lunch with friends and colleagues; that’s how meetings would be done, face to face. Right now, everything’s over Zoom, which has been fantastic, but nothing face to face.”

Seth Kaye

Seth Kaye is among many professionals who miss face-to-face interaction with clients.

He brought his entire workstation home, so he’s able to stay in contact with clients and even book new work.

“In terms of contracts, there’s nothing for me to photograph right now, as the commercial events have all been canceled for the foreseeable future. Weddings are the lion’s share of what I do, and people are postponing those to later this year or 2021. But business is still going on. People are still getting engaged. I’m still booking new couples to 2021. The world hasn’t stopped, and people are still planning for the future. That gives me an enormous amount of optimism.”

And also a chance to pivot to other business needs, Kaye added. “I’m trying to take the to work on my marketing and work on personal projects and try new things.”

Griffin said the team at Dowd is pivoting in other ways. “We have five offices and 47 employees, and we’ve been able to get everyone up and running from home; we’re still at full capacity. Of course, the insurance industry is considered an essential business.

“Everyone wants to make this work, but it’s been tricky to say the least,” he added, noting that technology has been a huge help. Because the company uses an internet-based telephone system, everyone was able to take their phones home and plug them into their computers.

“Our receptionist is working from home, and she answers live and transfers the calls,” he said. “And most of the staff have two computer screens in the office, and they brought one of the screens home. So it’s funny — if you go into the office and see all the desks with nothing on them, it looks like we’ve been robbed, but that’s not the case.”

Lawyers are as busy as insurance agents these days, and Martin is a good example, whether it’s helping small businesses with federal stimulus programs or assisting companies scrambling to prepare for all contingencies during the pandemic.

“I spent some time over the last two weeks dealing with transfer ownership issues between shareholders and and/or partners, so if people own a company, either shares or in a partnership, they are now feeling it’s important to establish and confirm in writing how the shares will be transferred … and what the conditions are,” he explained.

Meanwhile, employment laywers are dealing with unemployment and leave issues, while real-estate attorneys grapple with pending projects held up by wholesale postponements of meetings with planning and zoning officials, and estate planners see an uptick in business from families getting their affairs in order (see story on page 24).

The list goes on — and most of the work is being done remotely.

“It is a challenge, if you haven’t worked from home before,” Martin said. “I know some people work from home regularly, but for those of us who haven’t, it’s a big adjustment period. At least it is for me.”

It certainly has been for Lapierre-Houle, and also her kids.

“I definitely find myself, especially in the evening, saying to them, ‘it’s a school night,’” she said. “For them, it doesn’t feel like a school night. They think they can get up whenever they want and stay up as late as they want, but I’m trying to keep us on schedule — they get up like for school, and I sign on to work at 8.”

Convincing students to treat these days like regular school days is undoubtedly something parents of older kids grapple with as well. And kids of all ages are likely tiring of the social isolation.

“They can’t see their friends except behind a computer screen … that’s a significant emotional challenge because they don’t understand the social aspect. But they still have to learn and do their schoolwork,” Lapierre-Houle noted, adding that the warmer weather gives a reprieve in that they can go outside — but also provides an additional distraction because they want to be outside, rather than inside doing schoolwork.

She does appreciate her boss, company president Kevin Rothschild-Shea, who, she says, has always emphasized work-life balance, which has made this transition a little easier for employees. “He’s always been very flexible with families or children, but there’s still pressure to get work done, not to mention all the distractions at home.”

New Routine

Clients have been equally understanding of the current situation, Griffin said. “They’re not giving us a hard time — ‘I need this in two hours.’ Again, turnaround times are out the window, and people have been very accommodating and very understanding of that.”

On a personal level, he does miss meeting clients in person. “There’s nothing like going out and seeing clients face to face and talking with them, trying to see what their energy level is, how business is going … I do miss that. I’ll be excited to get that aspect of things back because it is missed. Now we have to make do with what we have, and everyone is in the same boat together — it’s not like we’re at a competitive disadvantage because of it.”

“It’s funny — if you go into the office and see all the desks with nothing on them, it looks like we’ve been robbed, but that’s not the case.”

Kaye told BusinessWest that’s been a challenge for him as well.

“I would see people regularly, just in passing or at the coffee shop — the day-to-day stuff we take for granted, now that we’re not able to have that routine. The routine now is different,” he said. “Hopefully, it’s a temporary new normal, but that human contact is gone right now.

“I’m taking the quarantine thing seriously, aside from pharmacy drives and having people put food into the trunk of my car when I order it from local farms,” he added. “I haven’t had any face-to-face contact in about three weeks. Some of my friends are doing the same. Some of our parents are not, which is interesting. But the social aspect being gone is definitely challenging.”

As the virus has still not peaked, the next couple weeks will bring more of the same, and though people he talks to are starting to go a bit stir crazy, they’re adapting as best they can, Kaye said.

“The people I’ve been speaking with, whether it’s clients not sure what their plans are going to be for 2020 or talking about postponements, they’ve been really nice about it. They have their needs as business owners, and I have my needs and concerns, and so far everyone has been really great.”

That first coffee-shop meeting will still be pretty satisfying, though — whenever that might be.

Joseph Bednar can be reached at [email protected]

Cover Story

A Strained Safety Net

Joan Kagan, president and CEO of Square One

Joan Kagan, president and CEO of Square One

Managing a nonprofit agency has never been easy, but a number of factors, from low unemployment rates and rising employment costs to new labor regulations and immense competition for donor dollars, are making it much more difficult for organizations to carry out their missions.

Joan Kagan compares the effects that unfunded mandates and rising costs have on a nonprofit to a bad tomato season. Well, sort of.

To make that point, she told a story. On a summer day a few years ago, she was informed by the waitress at the restaurant she was patronizing that, if she wanted tomatoes on her sandwich, she would have to pay a surcharge.

“There was a lack of good tomatoes around, so that restaurant owner had to pay a higher price for his tomatoes, and he was passing that cost onto the customer,” said Kagan, president and CEO of early-education provider Square One, adding quickly that the analogy doesn’t exactly work.

That’s because nonprofits are not like restaurants offering tomatoes. They provide vital services, the rates for which are set by the state or federal government, and they can’t simply be raised because the cost of paying employees, providing health insurance, or simply paying the rent, continues to escalate.

And this is the situation that nonprofits, a large and important cog in the regional economy, are facing right now.

Indeed, in June 2018, Massachusetts Gov. Charlie Baker signed a bill that is set to increase the minimum wage gradually every year, until it reaches $15 an hour in 2023. In addition, a payroll tax increase was issued for the new paid family and medical leave program, upping the rate from 0.63% to 0.75%. The state originally planned to begin collecting these taxes on July 1, but due to many companies and organizations expressing confusion on the specifics, the start of the required contributions has been delayed by three months.

“If there is a 5% increase in our health insurance in a year, we have to figure out where that comes from. We can’t just turn around and raise our rates by 5%.”

But the tax hike is coming, and it is one of myriad factors contributing to what are becoming ultra-challenging times for nonprofits, said Kagan.

Katherine Wilson, president and CEO of Behavioral Health Network Inc., which provides a variety of services to individuals with mental health issues, concurred.

“What’s more challenging now for my type of business is that so much of our revenue is established as a rate by somebody else,” said Wilson, who speaks from decades of experience when she says that while running a nonprofit has never been easy, it has perhaps never been more difficult than it is now. “If there is a 5%  increase in our health insurance in a year, we have to figure out where that comes from. We can’t just turn around and raise our rates by 5%.”

Gina Kos, executive director of Sunshine Village in Chicopee, a provider of day services for adults with disabilities, agreed. She told BusinessWest that while demand for the services provided by her agency is increasing, a point she would stress many times, the funding awarded to it for those services has either remained stagnant or decreased, at the same as costs, especially labor costs, are skyrocketing.

And, as noted, matters are about to get a whole lot worse.

“The state tells us how much they’re going to give us for a service, and we figure out how we can create a high-quality, desirable service with the money that they’re giving us,” said Kos, adding that Sunshine Village, along with many other nonprofit organizations, have been able to do this successfully in the past. “Unfortunately, now, it’s getting harder and harder… the regulations are becoming too burdensome.”

Gina Kos

Gina Kos says the measures contained in the so-called ‘grand bargain’ will present a stern test for all nonprofits.

She was referring, of course, to measures contained in the so-called Grand Bargain, the compromise struck between elected officials and the state’s business leaders. They include the minimum-wage increases and paid family leave, the latter of which will bring its own challenges to nonprofits used to running lean.

And these additional expenses come at a time when nonprofits are locked into rates that they can charge for services, with some of these rates badly out of date, said Wilson.

“When the state looks at an organization to come up with its rate, they look at the cost it took to fulfill the service two years ago,” she explained. “They don’t look at the market rate, they look at data that’s two years old … so the rates that they establish are extremely low and keep us as employers of individuals with low hourly rates.

“That makes it very difficult to find a quality staff person to fill our jobs and do good work that we need to be doing for the people that we serve,” she went on, adding that, in this climate, she and all nonprofit managers must be imaginative and persistent as they seek ways to bring more revenue and donations to their organizations.

For this issue and its focus on nonprofits, BusinessWest talked with area industry leaders about the forces contributing to these challenging times and the ways they’re responding to them.

Making Ends Meet

Kos, like other business and nonprofit leaders, said she has real doubts about whether the pending minimum-wage increases will significantly improve quality of life for the employees who receive them.

She believes many businesses and nonprofits will respond to the increases by cutting staffers’ hours, thus keeping payroll levels stagnant. Meanwhile, the minimum-wage hikes may actually hurt some employees because their higher annual salaries will push them over the so-called benefit cliff, meaning they will lose forms of assistance — for housing, food, and other items — previously provided by state and federal agencies because they no longer qualify, income-wise.

“Unfortunately, now, it’s getting harder and harder… the regulations are becoming too burdensome.”

“The goodness of what people want to do to give people a better quality of life through income is not going to be achieved,” said Kos. “And, quite honestly, it might even be reversed.”

Meanwhile, she doesn’t have any doubts that these measures will make it much more difficult for agencies like Sunshine Village, where 75% of the budget goes to wages, to carry out their missions, because they will make it more difficult to properly fund and staff their programs and also attract and retain talent.

Indeed, Kos said Sunshine Village, which has 280 employees, likes to tout itself as an employer of choice, paying employees $2 to $4 over the minimum wage in the past, a practice it will find considerably more challenging in the years to come.

That’s due in part to the compression effect that minimum-wage hikes have on salaries across the board. If an employer raises wages at entry-level positions from $13 to $15, it needs to then move its second-tier employees higher in order to differentiate the positions, and so on, up the ladder.

In short, minimum-wage hikes impact wages throughout an organization, said those we spoke with — and, again, unlike businesses selling sandwiches with tomatoes on them, they can’t simply raise rates to cover them.

Katherine Wilson says nonprofits are being challenged by set rates for services that are often out of step with the cost of providing those services.

Katherine Wilson says nonprofits are being challenged by set rates for services that are often out of step with the cost of providing those services.

Meanwhile, the paid-family-leave measure brings challenges of its own, said Kos. In addition to the tax burden, agencies must be able to provide services and run the organization if people are on leave, a real burden for smaller agencies, especially with programs that require minimum staffing ratios.

“We’ve always been able to find ways that we can do more with less,” said Kos. “And we’ve done that through innovation, through increasing efficiencies, through cost-cutting initiatives, but today, it’s just getting harder.”

Kagan agreed, and noted that, with historically low unemployment rates nationally and even in this region, simply finding staff is difficult, especially when nonprofits are competing with a host of industry sectors, including retail and hospitality, for individuals earning entry-level wages.

Kos concurred, and said payroll is just one of the line items on the budget where the numbers are growing.

“Other costs are rising at a level that our funding levels are not keeping up with,” she said. “And because of that, we’re losing really good staff.”

Mission Control

These new challenges for nonprofits are compounded by growing need within the community for many of the services they provide and demand for greater services, said those we spoke with, making this an even more difficult time for this sector.

“Not only are we dealing with the same type of funding level as we have had five or 10 years ago,” said Kos, “the expectation for the service from the customers that we’re seeing is that they want a better service, and we’re not getting better funding for that service.”

She noted that her agency, like Square One and BHN, is one of the many organizations in what’s known as the ‘safety net’ for Western Mass., and if they are not getting the necessary funding to provide their services to members of the community, the entire business community will be negatively affected.

“If Sunshine Village can’t serve more people coming out of the school system, if Square One isn’t able to serve more kids who need daycare, if Behavioral Health Network isn’t able to provide services for people with substance-abuse issues, their family members aren’t going to be able to go to work, and the business community is going to be hurt,” said Kos. “If their employees don’t have the safety net, their employees aren’t going to be able to go to work.”

In response to these many challenges, nonprofit managers are forced to be more creative with ways to raise additional revenues and become leaner, more efficient organizations, both of which are necessary if they are to continue to carry out their respective missions.

“The vast majority of folks, certainly in the business community, don’t understand that we’re businesses too.”

But most don’t have much flexibility when it comes to their budgets. At BHN, for example, 80% to 83% of the organization’s revenue is related to compensation.

“That doesn’t leave a lot of room to find money when there is something that represents an increase in the cost of paying our employees or supporting them,” Wilson told BusinessWest, adding, as others did, that agencies must think outside the box when it comes to bringing in more revenue in order to keep up with rising regulation costs.

This includes advocating with state representatives, looking for grants, and cutting costs within the organization.

This isn’t easy, said Kagan, adding that another challenge facing nonprofits is that people don’t understand that the same problems facing businesses today — finding and retaining talent, paying for ever-rising health insurance, coping with new state labor and employment laws, and many others — apply to them as well.

“The vast majority of folks, certainly in the business community, don’t understand that we’re businesses too,” said Kagan, adding that this makes it more difficult to generate more donations or other forms of support.

Kos agreed, but noted that, as businesses struggle with the same cost issues, there might be growing awareness of what nonprofits are confronting.

“I think what’s interesting today is that the for-profit business community is starting to struggle with the same things that we as the nonprofit community have been struggling with for decades,” she said.

Kagan agreed, and noted that it’s important for nonprofits to educate the business community — and all their supporters — about just how challenging the current climate is, and will be for years to come.

“You’re not advocating just to bring money into your own organization,” she explained. “You need it so that you can pay fair equitable salaries to your staff and provide a high-quality service to the people that you’re serving.”

Climate Change

All those we spoke with stressed that managing a nonprofit has never been as easy as it might look.

But over the years, said Kos, organizations like Sunshine Village have “managed.”

Indeed, they’ve managed to continuously raise funds vital to their organizations, cope with rising costs and changes in labor and employment laws, and, yes, carry out their important missions.

But it’s a fact that simply ‘managing’ is becoming ever-more difficult.

These new regulations are making it increasingly difficult for nonprofits to keep their heads above water, but that doesn’t stop them from trying.

Kayla Ebner can be reached at [email protected]

In these times, many people will be working remotely. In addition to accessing BusinessWest online, readers may wish to add their home address. To do this, e-mail [email protected], visit  https://businesswest.com/contact-us/subscribe/, or call 413.781.8600.