Year-End Appeal FAQ
How did we get here?
Over the last two decades, from our inception as an organization to weathering the unprecedented challenges of COVID, our phenomenal staff and board leadership have kept NECC focused on serving members and the community at large. However, over the last several years, the following factors have placed a strain on our organization and have led to our current financial position:
- COVID-19 Pandemic: Like organizations throughout the country, the COVID pandemic had a detrimental impact on our long-term financial sustainability. In the spring of 2020, we closed the facility to protect the safety and well-being of our community staff.
While our facility was closed, our primary focus was to continue to be a resource for our community and continue to support our dedicated staff. For over a year our main program offerings were virtual group fitness classes that provided our members an opportunity to stay active and connect with community members during the shutdown until we were able to offer our programs in person again.
Without the ability to fully operate our high earning programming, including our swim lesson program, after school time, and personal training, we experienced a serious loss of revenue and heavily relied on emergency government funding to sustain our operational costs and continue paying our staff.
Throughout these hardships we were heartened by the consistent support from our community members. Despite financial hardships and employment uncertainty, many of our members kept their membership throughout the pandemic. Out of gratitude and acknowledgement of the financial challenges many families continued to experience as businesses and schools reopened, we did not raise our membership fees until 2024. When we were able to re-open our doors, we began using dedicated funding to provide reduced membership fees to ensure that all community members could benefit from our vital community and recreational resources, from swim lessons to our group fitness classes and after school program.
Our primary focus has been and always will be our community and staff. We survived the unprecedented times of COVID, but unfortunately experienced a long-term loss of revenue that continues to impact our yearly budgeting and programming needs.
Inflation: The country experienced some of the highest inflation rates in recent years and during the three year pause of membership fee increases. Not only has this impacted the cost of operations at NECC but it also means that our membership fees are still roughly 9% below what they would have been if consistent rate increases had kept up with inflation and market rates.
Leadership Transitions: Year over year executive, fundraising, and board leadership transitions have negatively impacted the ability of NECC to fully develop and innovate new revenue streams, deepen relationships, and advance long-term planning.
Major Facility Costs: The necessary yet unfortunate need to update and replace our HVAC and boiler, which is needed to heat the pool and building, cost over $800,000, which drastically depleted the organization’s reserves. The lack of a robust reserve severely hampers our ability to be resilient in the face of mounting deferred maintenance costs and a recessive economy.
Decreased Resources Across the Sector: The recent decrease of federal funding for nonprofits across the country has created a tidal wave of scarcity that is now threatening Northeast Community Center. A lack of access to federal funding has led to organizations previously reliant on federal funds to explore other options to keep themselves afloat. Consequently, organizations like ours, have had to face an exponential increase in competition for non-federal grant funding. The Northeast Community Center relies on grants and sponsorships to help cover our operating costs. The fallout from federal cuts has created a daunting fundraising environment and led to a significant shortfall in our projected grants and sponsorships, threatening the very programs and services that our community relies on.
Insurance Membership Program Reimbursements: These programs reimburse the center on a per-visit basis through qualified insurance wellness programs. These visits are capped at 4-6 visits each month, depending on the program. Unfortunately, even if a member comes in enough times for us to reach the cap, the reimbursement rates from these programs remain lower than our regular membership dues.
Over the last 12 years, we’ve successfully negotiated a rate increase only twice, and our most recent attempt this summer was unsuccessful. As more members join through these plans, it has become increasingly difficult to generate the revenue needed to maintain our services and our aging building.
Not only have insurance reimbursement rates not kept up with inflation but they have actually decreased. Despite the generous support of many members who make contributions to cover the insurance/membership fee gap, the disparity between the annual difference between the reimbursement rate and cost of membership is an astounding $400,000 per year. The board will be revisiting the feasibility of continuing this program in the coming months.
Why do we need to raise $250,000?
The aforementioned contributing factors have depleted our reserves. This amount will help to build back some of our reserves and allow us to mitigate any unexpected building repairs and programming revenue shortfalls due to the economy and uncertainty at the federal level while we build a path toward true sustainability.
How will funding needs impact NECC staff?
Like any organization, staff wages are the single highest expense for NECC. Robust revenue streams mean that we’re able to give cost-of-living increases, hire staff at wages that match their experience levels, and make the most of sudden opportunities. However, due to our depleted reserves and an uncertain landscape next year, should anything go awry in terms of continued major funding shortfalls or major facility costs, like the roof needing to be replaced, we may have to layoff staff and reduce services.
To ensure that we are good stewards of financial resources, the board, led by our Executive Director, conducted an analysis of staff wages earlier this year and unfortunately found that none of the full-time staff, currently nine, met the 50th percentile threshold as defined by the 2024 regional salary survey conducted by the Nonprofit Association of Oregon. A truly sustainable organization is one that offers competitive wages and benefits. NECC leadership is committed to finding ways to provide thriving wages to our incredible staff. However, in order for us to get to the point to make those changes, we have to stabilize.
Were any recent staff departures due to this budget shortfall?
No. We have not had to make any staffing changes based on the budget deficit at this time.
The Path Forward: Sustainability
Despite these sobering challenges, we share a vision where NECC is buzzing with member and community socials, that has a robust volunteer engagement program with community members leading with their expertise and life experiences with the greater community, where our community program is reinitialized and breathes new life into our programming and neighborhoods, and where our mission of creating a thriving and resilient intergenerational community becomes known throughout the Portland metro area. Towards that end, below are some highlights of how we are planning to create and maintain sustainable programming and operations:
Programming:
Partner with fellow nonprofits and neighbors to introduce new programming without having to “recreate the wheel.”
Celebrating our members’ time, talents, and resource sharing by developing a new, robust volunteer program.
Sustainability:
Cost Savings: Justin, with the help of staff, has reduced annual operating expenses by over $30,000 and will continue to streamline systems with an eye towards member service and efficiency.
Continue to implement energy conservation practices.
Expand successful programming like offering an additional basketball league in spring, continue to advertise facility rentals for private events, and the addition of more swim lessons during weekend hours.
Update our strategic plan.
Fundraising Efforts:
Continue to apply for grant funding.
Relaunch the sponsorship program beginning with this year-end appeal.
Continue efforts like the Oregon Bottledrop collection program. We have seen an exponential increase in the revenue from the Bottledrop program. In 2022, we saw a total of $208 in donations. In 2023, there was a total of $80, while in 2024, there was a total of $375. But this year, once we made a few changes to how we engaged members, we have already received $1,700 just since June. Thank you to everyone who brings in their Bottledrop donations!
Ways you can help secure NECC’s future:
Join our new sponsorship program as a Partner in Resilience or spread the word to connections you have in the community
Celebrate with us on Friday, November 14, from 5:30-7:30pm at our 20th Anniversary Fundraiser and Social with light appetizers, with a program and appeal at 6:30pm
Apply to be a volunteer, join a board committee, or become a board member
Share our donation link with friends and family: https://tinyurl.com/SaveNECC
Leave us a positive review on Google or Yelp
Encourage your friends and family to join and become a member, use up your guest passes, and spread the word about our membership options!
Please don’t hesitate to reach out with questions to Justin Pabalate, Executive Director, at jpabalate@necommunitycenter.org or Tay Stone, Board President, at tays@neccpdx.org.