This article considers the role CPAs take in nongovernmental nonprofit organizations and explores the opportunities for CPAs to help nonprofit food relief organizations face the challenges presented by the coronavirus (COVID-19) pandemic. These nonprofits have a significant economic and social importance to both the economy and society; but the pandemic has made it difficult for them to provide services they had provided in the past.

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CPAs, and CPA firms, are embedded in the financial and cultural lives of nonprofit organizations in a variety of ways: CPAs who audit or review nonprofits’ financial statements have direct, historical, and intimate knowledge of the workings of these organizations. Although remaining independent, CPAs are in an excellent position to provide advice and counsel during times of need and prospective growth. CPAs often serve as managers, top-level executives, and consultants to nonprofits. As managers, CPAs are tasked with balancing their responsibilities to the organization with their professional licensures’ requirements.

This article examines the economic importance of the nonprofit sector; COVID-19’s impact on nonprofits, specifically those with food activities; focus group findings related to the food organization relief sector; and key areas where CPAs can assist these nonprofits in managing the challenges they face.

The Economic Importance of the Nonprofit Sector

A nonprofit’s purpose is to provide benefits to the public that governments and corporate entities may not provide. The COVID-19 pandemic highlighted the great need for nonprofits in providing for the benefit and welfare of the public. The nonprofit sector has an impact on the United States economy that is larger than any other industry, contributing approximately 5.6% of gross domestic product (National Center for Charitable Statistics (NCCS), “The Nonprofit Sector in Brief 2019,” Jun. 4, 2020, According to the National Council of Nonprofits, the sector employs approximately 12.3 million people and spends more than $826 billion on salaries, benefits, and payroll taxes annually [National Council of Nonprofits (NCN), 2021. “Economic Impact,” February 2, 2021,]. Moreover, these nonprofits create many opportunities to fuel the United States’ economic engine: nonprofits consume a wide range of goods and services, ranging from immediate needs (e.g., food, utilities, office supplies, rent) to larger expenses (e.g., computer and medical equipment). These consumptions of goods and services are estimated at approximately $1 trillion (NCN 2021).

The pandemic has left many nonprofit organizations struggling for survival.

COVID-19 has had a larger effect on the operations of nonprofits than the Great Recession of 2007–2009 (Sharon Cohen, “Millions of hungry Americans turn to food banks for 1st time.” AP, Dec. 7, 2020, The pandemic has left many nonprofit organizations struggling for survival. According to one survey (Independent Sector, “Impact of COVID-19 on Mid-Sized Nonprofits.” June 15, 2020,, 83% of nonprofit organizations observed not only a drastic reduction in their revenues, including earned revenues from in-person events, but also a drop in individual donations and grants. The Nonprofit Leadership Center reported that non-profit CEOs and executive directors expressed a fundamental concern related to their organizations’ survival [Nonprofit Leadership Center (NLC), “Survey Reveals Impact of COVID-19 and 2020 Challenges on Nonprofits at Year-End.” Nov. 16, 2020,]

Impact of COVID-19 on Hunger and on Nonprofits with Food-Related Activities

Food relief organizations are an important subset of the nonprofit world and are vital to addressing food hunger and food scarcity in the United States. COVID-19 has raised greater awareness of the role of food relief organizations and their mission. The fallout from the pandemic has resulted in a significant rise in hunger across the United States. For example, in Texas, more than 2.6 million households have said they sometimes or often do not have enough to eat; approximately 64% of those households are either Hispanic or Black (U.S. Census Bureau).

Food relief nonprofit organizations address the needs of the 37 million people who suffer from hunger in the United States (an 11.5% food insecurity rate), of which 11 million are children. A 2020 Map the Meal Gap study by Feeding America reported that $19.5 billion is needed by individuals at risk of hunger to purchase just enough food to meet their needs (Map the Meal Gap Study,

The Feeding America survey also noted the following:

  • The range of the population experiencing food insecurity in every county of the United States is 4% to 30%.
  • The majority (64%) of counties with the highest rates of food insecurity also experience persistent poverty.
  • Rural (nonmetropolitan) counties make up 63% of all United States counties, but 87% of rural counties have the highest rates of food insecurity.
  • One in three people who are food insecure may not qualify for federal food assistance.

According to the Independent Sector survey (2020), only 23% of food pantries were operational during the height of the pandemic and they struggled to survive, leading to profound adverse financial and social implications. Food relief organizations, such as food banks and pantries, strived to adapt to the increased demand for services, the decline in food donated by supermarkets and farms, the loss of staff and volunteers (especially the core group of senior citizens), and less person-to-person contact. Many had to lay off workers and cut salaries, and others had to shut down operations due to lack of volunteers (Kenzi Abou-Sabe, Christine Romo, Cynthia McFadden, and Jamie Longoria, “COVID-19 Crisis Heaps Pressure on Nation’s Food Banks.” NBC News, April 8, 2020,

Since 2020, food pantries have had to adjust to this new environment with new strategies and activities, focusing on urgent needs and direct emergency assistance. They have had to adhere to the Centers for Disease Control and Prevention (CDC) and state mandates to address health concerns. For example, some food relief organizations pivoted to low contact drive-thru food distribution, while others transitioned from serving hot meals to frozen meals.

Focus Group Findings from Around the Country

In late 2020, graduate students in the accounting program at Pace University’s Lubin School of Business conducted a focus group in 32 states, surveying leaders in food pantries about what they were experiencing.

Their key findings were as follows:

  • There was a significant shortage of volunteers and food donations in food relief organizations during the pandemic, and post-pandemic, that shortage is expected to continue.
  • The pandemic did not change the quality of food supplies for clients, and this trend is expected to continue.
  • Food insecurity for children (not knowing if, and when, their next meal will come) significantly increased during the pandemic.
  • Many 2020 pandemic clients were new to food relief organizations, but within one year those clients are expected to return to pre-pandemic conditions.
  • Before the pandemic, food relief organization clients felt safe coming into facilities; during the pandemic, they felt unsafe and post-pandemic that unsafe feeling will continue.
  • Most food relief organizations believe they will be better able to service clients after the pandemic is over.
  • State and federal support of food relief organizations before the pandemic was not sufficient; both state and federal support did increase during the pandemic and is expected to remain at that same increased level, post-pandemic.
  • Once a community has experienced food insecurity, that community’s food insecurity remains into the future.

Roles of CPAs in Food Relief Organizations after COVID-19

During the pandemic, food relief organizations had to face significant shortages in the areas of donations, food supplies, and volunteers. Now these same organizations face an extraordinary range of new challenges as food insecurity has become more pervasive. These challenges include a reduction in donations and food supplies, an increasing need to address child hunger, a decline in volunteers, and increasing client safety concerns.

COVID-19 Challenges to Nonprofits

  • 71% decline in operations,
  • 67% furloughed employees,
  • 55% closed offices,
  • 51% laid off employees,
  • 30% reduced employees pay and benefits.

(Source: Independent Sector 2020)

Historically, a CPA’s role with nonprofits has been to assist with budget planning, working capital, inventory and cash flow management, taxation issues, and ASC 958 disclosures. The uncertain postpandemic risk environment, however, offers many opportunities for CPAs to assist the nonprofit sector.

  • CPAs can provide more frequent and, at times, ad hoc assistance as nonprofits struggle to respond to changes. Such advice can expand to strategic planning, risk assessment, logistics help with inventory and physical space requirements, addressing unrestricted asset reductions, consultations on staff management, adjusting policies and procedures, and management controls.
  • Many nonprofits do not have a CPA on their board of directors and may turn to CPAs for assistance navigating new legislation, such as the American Rescue Plan Act of 2021, and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This need has been greatest during the various waves of the CARES Act and will continue to be relevant to nonprofits in the foreseeable future.
  • Finally, when the solution to the financial straits of a nonprofit requires a merger or an acquisition, CPAs are versed with the due-diligence process, as well as IRS requirements for transferring of assets when nonprofits cease operations.

Help Provided by Outside Parties to Nonprofits

  • 92% additional loan options such as forgivable loans,
  • 61% additional payroll tax relief,
  • 48% help with employee healthcare costs,
  • 45% additional program grants.

(Source: Independent Sector 2020)

A New Environment

The COVID-19 pandemic has negatively affected the nonprofit sector and has unleashed a new era of change for nonprofit organizations, especially those that provide food relief. Nonprofits need to re-strategize their objectives. With the support of CPAs, food relief organizations can reimagine their operations and organizational strategies to align more effectively with stakeholders and communities in the current environment. CPAs can help nonprofits be more resilient and better able to cope with the uncertainties of the post–COVID-19 landscape.

Susanne O’Callaghan, CPA, PhD, is a professor of accounting in the Lubin School of Business at Pace University, New York, N.Y.
Raymond J. Elson, CPA, DBA, is a professor of accounting in the Harley Langdale Jr. College of Business Administration at Valdosta State University, Valdosta, Ga.
Salma Boumediene, PhD, is a faculty associate–research at the Naval Postgraduate School, Monterey, Calif.
Salem Boumediene, PhD, is an associate professor of accounting at the University of Illinois, Springfield, Ill.
John P. Walker, PhD, CPA, is a professor emeritus at Queens College CUNY, Flushing, N.Y.

The authors would like to thank Yigal M. Rechtman, CPA, partner at RSZ Forensic Associates, for providing valuable input on this article, as well as the students at Pace University.