Habitat for Humanity International is facing its biggest financial challenge ever as part of the fallout from the COVID-19 pandemic.
As a result, the Atlanta-based nonprofit, which builds affordable housing and makes home repairs for those in need, recently announced plans to lay off 10% of its staff worldwide and cut the hours of some other employees.
The move is a reaction to short- and long-term financial forecasts and impacts on operations.
The announced cuts affect only Habitat for Humanity International, the umbrella organization.
Corporate and individual giving is projected to be down significantly over the course of the next year.
“It’s heartbreaking,” said CEO Jonathan Reckford. “It’s a giant challenge for us and the longer it goes on, the scarier it becomes for most of the business and nonprofit communities.”
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The action will immediately impact its U.S.-based staff, and its regional offices throughout the world in the weeks to come. Among other cuts , senior leaders at the organization have elected to take a pay reduction, according to a press release about the changes.
Reckford said the nonprofit is not currently disclosing how many people in Georgia would be affected by the cuts and reduction in hours.
Of the 1,100 Habitat for Humanity affiliates in the United States, about 56 are located in Georgia. Affiliates are locally operated and have their own lines of funding.
However, affiliates are not escaping the pandemic’s economic punches.
Related: Churches find giving is down because of COVID-19 One of the biggest financial blows for Habitat, said Reckford, was the nonprofit having to temporarily close its 1,000 Habitat for Humanity ReStore retail operations, which accounted for $527 million in revenue in 2019 and are operated by affiliates.
So far, the network is losing about $43 million in revenue every month that the ReStores are closed.
Additionally, many of the people in Habitat homes work in the service sector, which is seeing a huge loss in business and, consequently, jobs. Those who have lost jobs or seen cuts in hours have received extensions on their mortgage payments through mortgage forbearance agreements, which also affect the bottom line. Mortgages are obtained through Habitat.
Habitat for Humanity is certainly not the only nonprofit feeling the pinch, according to Una Osili, associate dean for research at the Lilly Family School of Philanthropy at Indiana University.
“This is certainly an unprecedented time because we’re facing both a health crisis and an economic crisis.”
Nonprofits such as food banks are seeing an outpouring of generosity. The biggest challenge for organizations like Habitat, she said, is they are not at the “forefront of the crisis and so some of them are not seeing the same level of support.”
Habitat, she said, also relies on much face-to-face interaction. “A lot of work they do is in-person building of houses. Without that, it’s harder to get the message out.”
In fiscal year 2019, which ended June 30, 2019, Habitat for Humanity affiliates in Georgia built or rehabilitated 180 homes, and provided 258 repairs.
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