When people find themselves without food, water or shelter, they turn to the nonprofit sector to help meet their basic needs.

After-school providers keep children academically and socially engaged. Mental health agencies help people deal with issues that feel too hard to handle, and cultural and arts programs provide a break for those seeking respite from daily routines or struggles in life.

Anything that might be a resource for people during the pandemic (and before it) likely touches a nonprofit, said Kelley Kuhn, vice president of the Michigan Nonprofit Association. But because of COVID-19, there are no guarantees those organizations will always be around.

The sector is in unprecedented territory, facing significant change and contraction as it grapples with revenue losses, ballooning demand for services, operational shifts needed to keep people safe and the possibility of recession, according to industry leaders.

COVID-19 has fundamentally changed how nonprofits operate, from logistics like incorporating safety measures into in-person service and program delivery to shifting programs and fundraisers online and nonstop contingency planning to adapt to changing revenue streams and human resource capacities, Kuhn said.

All of those shifts have taken a toll not only on nonprofit finances but also on nonprofit leaders and employees, many of whom have worked nonstop during the pandemic.

"If an economic downturn happens to an already fragile sector, what will be the stress and burden when nonprofits will be continually asked to fill gaps in services to community?" Kuhn said.

"The safety net is going to need attention and support."

What we've learned: Nonprofits have collectively lost millions of dollars in earned revenue with building closures and contributed dollars with canceled fundraising events. Yet some, like food banks and rescues and shelters, ramped up their efforts with each new wave of demand, costs be damned.

To conserve cash, employees were furloughed. To help recoup lost revenue, some shifted to virtual fundraisers and innovative events like drive-in theater gatherings. Some secured federal Paycheck Protection Program loans.

Mental health agencies began telehealth visits with clients to handle increased demand for counseling, and hospitals restarted elective medical procedures. Educational and cultural groups launched new programs online. But it's become clear that among nonprofits there are disparities in the ability to access and leverage technology, Kuhn said.

Racial disparities have taken on a new importance amid the pandemic, forcing nonprofits to view their work through a racial equity lens.

How nonprofits are doing financially differs from one to the next, depending on their mix of public vs. private funding, their reliance on earned vs. contributed revenue and how much they can rely on their donors to support them right now, said Mariam Noland, president of the Community Foundation.

Unanswered questions: Leaders agree that demand for human services will continue to rise, but no one knows how much. It will depend on how quickly the economy turns around, Noland said. And several factors play into that, including the prospect of a recession and whether or not school is in session and parents can return to full-time employment.

"What happens with kids is a huge determinant of what happens with who can go back to jobs, where ... people put their priorities," she said, noting there is also a related impact on arts and cultural organizations, since people are unlikely to go to a theater performance if money and time are tight.

What's next: Leaders are watching what happens with the economy and Michigan's phased reopenings, since both factors have a ripple impact on earned and contributed revenue.

They are also monitoring the rise in the demand for human services, whether government will step up to support the increased demand, and the mental well-being, burnout and work-life balance for nonprofit employees. Whether there will be more federal relief that nonprofits can access without the same issues they encountered in securing the initial PPP loans is another question, Kuhn said.

Based on their financial models and limited cash on hand, a "shocking number" of nonprofits will not survive the pandemic, with closures most likely spread out over the next two to three years, Jeff Williams, director of the community data and research lab at Grand Valley State University's Dorothy A. Johnson Center for Philanthropy, said in June.

Leaders are seeing some indicators that nonprofits are beginning to look at consolidations, and partnerships are taking shape as those organizations navigate the pandemic and post-pandemic environment, Kuhn said.

"If you are looking to continue to do the work in a resource-stressed environment, then you're creatively looking towards consolidations and partnerships" to best meet community needs, Kuhn said.

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What's Next: Fragile nonprofit safety net facing tests that threaten survival - Crain's Detroit Business