Calling for a $200M Nonprofit Relief Fund

Thursday, January 27, 2022

The Minnesota Council on Foundations, Minnesota Council of Nonprofits, Greater Twin Cities United Way, United Ways of Minnesota, and Metropolitan Alliance of Connected Communities are leading advocacy on creation of a one‐time Nonprofit Relief Fund, which would provide $200 million for nonprofits statewide.

Funding shortfalls and a diminished workforce, paired with an increased demand for services, is making it difficult for Minnesota nonprofits to continue operating at the level our communities need to recover and rebuild from COVID-19. Data shows that 44 percent of nonprofits are still seeing an increase in demand for services, but 47 percent of nonprofits said they could only operate for 12 months or less before exhibiting financial distress. This is not sustainable.

To continue providing the support our communities need during COVID‐19 and to accelerate a more equitable recovery, Minnesota needs to invest in our nonprofits.

To date, nonprofits have been largely left out of state and federal relief programs. While many industries and sectors had access to one or more programs with dollars specific to meet their needs, the nonprofit sector has had no designated relief dollars for recovery.

That is why we are proposing the creation of a Nonprofit Relief Fund, leveraging $200 million in federal relief dollars for nonprofits statewide.
 

What nonprofits would be eligible for Relief Fund grants?

Grants would range between $50,000‐$150,000 and prioritize small, rural, human services, and culturally-specific nonprofits. Half of the funds would be for organizations in the seven-county metro area, and the other half reserved for Greater MN nonprofits. (More on eligibility in the full Nonprofit Relief Fund Proposal, page 6.)
 

How would Relief Fund grants be distributed?

We are basing the Relief Fund on the Minnesota Department of Employment and Economic Development’s (DEED) 2020 Small Business Relief Fund, which was a lottery process. DEED will accept applications, access eligibility, and determine which organizations ‘win’ the lottery for each of the six grant categories. (Read more about the distribution process and grant categories in the full Nonprofit Relief Fund Proposal, page 7.)
 

Where does funding for the Relief Fund come from?

The funding would be at the state level, either through the state’s general fund or remaining money from the federal American Rescue Plan (ARP).
 

Why $200 million?

You may recall that we had a similar request at the end of the 2021 legislative session, for $50 million. The increase to $200 million is due to new data from the Minnesota Council of Nonprofits' COVID Impact Report detailing the continuing financial needs of nonprofits to serve our communities, new data from the IRS Masterfile of nonprofits, the ongoing lack of COVID relief funding for nonprofits, and the state’s positive budget forecast.
 

Ensuring accessibility

We are working to ensure these features would be included in a Nonprofit Relief Fund:

  • Make the application as simple as possible, including a requirement that the organization attests to financial hardship rather than document it;
  • Require no or very minimal reporting from individual nonprofits;
  • Provide general operating support; and
  • Prioritize the categories noted above (small, in Greater MN, human services, and culturally-specific nonprofits).


Why relief funds for nonprofits?

Nonprofits are key to economic expansion in Minnesota. The nonprofit sector is the third largest sector of employers in the country, and employs 14% of Minnesota’s workforce. In addition to people they employ directly, nonprofits serve as economic multipliers by providing needed services, like after school programs, elder care, and job training that allow others to find employment and make it possible to work outside the home. Nonprofits also stimulate economic activity through attractions like cultural centers and museums that lead visitors to spend money at nearby businesses like parking, eating out, shopping, and more.

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Your support of this $200M Relief Fund ensures essential general operating grants are available to nonprofits most in need.

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