Minnesota nonprofits brace for a challenging fundraising year

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A sign outside the Minnesota Children's Museum
A sign outside the Minnesota Children's Museum in downtown St. Paul on March 14, 2020, tells visitors the museum is closed.
Andrew Krueger | MPR News file

Workers in many industries are already feeling the pinch, as bars and restaurants close to dine-in customers, and professionals from hair stylists to dentists are forced to stop working.

Another industry that could take a hit: nonprofit organizations. They employ more than 385,000 people, or 13 percent of Minnesota's workforce. And many are cancelling the fundraisers they rely on.

Jon Pratt, the executive director of the Minnesota Council of Nonprofits, joined MPR News host Tom Crann to talk about what’s at stake and what help is available during the COVID-19 outbreak.

The below conversation has been lightly edited.

Tom Crann: What are you hearing about how the coronavirus outbreak is affecting nonprofits in general?

Jon Pratt: I think it's probably similar to many employers — people trying to work remotely, if they can. You know, a huge number of canceled events, canceled services, classes. And then there's some financial implications. Most nonprofits have less than three months cash [on hand], so there are real questions of how they survive this economically.

Crann: A lot of the canceled events are actually revenue-generating events. How important are fundraising events to the bottom line?

Pratt: Well, it varies. Often it is a spring fundraising gala or event. Some [organizations] are converting them to remote events so you can still contribute, try to sort of have ways to interact online. But it's not easy to turn that corner if you’re a smaller nonprofit, especially with how quickly this hit.

Crann: Do you expect government grants and even individual donations to shift for a while away from cultural nonprofits and directly into COVID-19 response?

Pratt: No. Arts organizations compete for arts funding. Human services compete for human services funding. But we're also looking at a questionable economy, and when people have uncertainty, that is when charitable contributions tend to go down.

Crann: Can you look back to 2008, 2009, when a lot of nonprofits took a hit and people tightened up on giving? Are there lessons learned there that maybe can be applied here, or is it just a totally different thing?

Pratt: It's that time seven probably. But interestingly, if you look at employment statistics, nonprofits actually did not drop in total employment during the ‘08-’09 recession. So, their diversified revenue streams carried them through. I think this could be a very different situation.

Crann: What kind of help is being made available for nonprofits to get through this?

Pratt: One of the encouraging things is there is an accelerated development of a disaster recovery fund by the Minnesota Council on Foundations. They announced that two days ago. They raised $4.4 million in 48 hours from foundations. The Otto Bremer Trust has also committed $50 million. And then the Minneapolis Foundation and the Greater Twin Cities United Way are also planning funds and responses. Also, Duluth's foundations have formed a consortium.

Crann: Do you think the money will continue to come in? I imagine that that $4.4 million can be disbursed pretty quickly, right?

Pratt: Yes. And individuals certainly can contribute to a fund or foundations. The Council on Foundations and the Council of Nonprofits are sponsoring a briefing on Monday about grant making and we had the limit of 500 people to participate in that call. It filled up within an hour. So it'll be recorded. It'll be available online at both of our websites. But it just shows the magnitude of concern within nonprofits of how do we weather this financially and then how do we continue being an essential resource to the community?

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