Nonprofits ask for $60B in federal aid as they brace for decline in donations during COVID-19

Nonprofits in Minnesota and across the U.S. are asking for $60 billion in federal aid as they brace for a decline in donations due to the economic downturn during the COVID-19 outbreak.

Dozens of nonprofits said in a letter that they expect a drop in revenue and contributions just like during the 2008 recession, despite being on the front lines of helping people in need during the pandemic. In a letter to Minnesota's congressional delegation on Thursday, the Minnesota Council of Nonprofits echoed the need for immediate federal aid.

"Nonprofits are seeing vastly increased demand and significantly decreased resources," said Marie Ellis, the public policy director at the Minnesota Council of Nonprofits, adding that the letter is to remind policymakers preparing stimulus bills to "make sure the nonprofit sector isn't forgotten."

Minnesota has more than 9,000 nonprofits, with a record 385,000 workers make up 13.3% of the state's workforce, according to the council. Nonprofits worry major donors and institutional giving will drop following the plunging stock market, despite smaller individual giving continuing.

GiveMN, which runs the online giving site and the state's largest annual giving day, Give to the Max, said that nearly 1,000 nonprofits have received donations so far in March, with giving up 77% so far compared to March 2019.

"There is a lot of fear, a lot of anxiety about what this means for the future," said Jake Blumberg, GiveMN's executive director, adding a 2018 study by Guidestar showed that half of nonprofits nationally have less than one month of operating reserves. "They do not have a lot of breathing room for there to be a significant crisis like this," Blumberg said.

A new statewide Disaster Recovery Fund started last week has drawn about $2,800 in donations so far on top of $4.4 million from local foundations to help nonprofits, small businesses and residents.

New COVID-19 funds also launched last week at the Otto Bremer Trust in St. Paul, the Headwaters Foundation for Justice and Greater Twin Cities United Way in Minneapolis. Second Harvest Heartland started a $10 million initiative to support 10,000 emergency food boxes and its new Minnesota's Central Kitchen effort, which has cooks from shuttered dining companies preparing takeout meals for people in need.

"This is the time to take a deep breath and tell your story to donors," Blumberg said.

As a rebate to nonprofits, GiveMN announced it would return proceeds from its processing fee from online donations made to nonprofits in March and April. GiveMN also runs a consulting service, RaiseMN, and is offering nonprofits free 45-minute virtual coaching sessions on fundraising.

Propel Nonprofits, which helps nonprofits with finances and obtaining loans, also is offering free help. And 500 spots for a free webinar Monday by the Minnesota Council of Nonprofits on grantmaking during the outbreak quickly filled up.

The council also sent a letter to Gov. Tim Walz and legislative leaders asking them to pass legislation that says nonprofits with state contracts can't be penalized if they can't meet their duties during the pandemic. Nonprofits expect a spike in demand for services as they suffer financial losses from canceled fundraisers and shuttered programs.

Some nonprofits are shifting in-person galas to online fundraisers while foundations are extending grant deadlines or shifting dollars to help nonprofits during the outbreak.

Humane Society closes

For many Minnesota nonprofits, the pandemic is drastically changing how they operate — or if they operate at all.

The Ronald McDonald House Charities, Upper Midwest, which houses and feeds families seeking help from Twin Cities hospitals for life-threatening illnesses, has barred visitors and volunteers. Staff are preparing meals previously made by volunteers. The Ronald McDonald House in Rochester also halted volunteers and visitors, ordering boxed or catered meals instead.

Other organizations, though, are still looking for volunteers, such as food shelves which rely on the help. The nonprofit, HandsOn Twin Cities, has compiled a list of volunteer opportunities during the pandemic at handsontwincities.org.

The Animal Humane Society, the largest nonprofit animal shelter in the Twin Cities, closed its doors through May 2 to prevent its staff from interacting with the public or one another because of the need for social distancing.

"We've never had to close the shelter," CEO Janelle Dixon said.

Of nearly 300 animals, most were moved into foster homes. Any animals not adopted or fostered will stay at its Golden Valley location, which has a limited number of staff working. Most of the 400 employees will now take a pay cut, with 60% of them furloughed without pay from April 5 to May 2.

At Wilderness Inquiry, which plans trips in Minnesota and across the globe, all programs have been canceled through May 10 and some travel guides were laid off.

"We're in the bringing-people-together business," said Greg Lais, the executive director.

He said the nonprofit has lost revenue and expects more drastic shortfalls if the pandemic lasts through the summer.

"It's all a matter of time," he said. "If this continues on ... then it's going to be hard."

Kelly Smith • 612-673-4141