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Saturday, November 26, 2022

Nonprofits see their grant funding dip back to pre-pandemic levels

Minnesota’s organizations worked incredibly hard to provide critical needs like emergency food and housing assistance when a public health crisis and accompanying government lockdowns sent thousands of workers into unemployment. Then followed George Floyd’s murder, a Black man who was cut down by a white Minneapolis Police officer.

Philanthropic groups expanded their grant giving as a result to widespread unrest and calls for fresh strategies for racial social campaigning.

The state’s NGOs were able to weather the worst of the epidemic and the turmoil with the aid of crucial government assistance initiatives including forgiving Paycheck Protection Program loans and the employee retention tax credit.

After almost three years, philanthropy has virtually reached its pre-pandemic levels, in part as a result of the recent stock market volatility. Government relief initiatives that would have helped the nonprofit sector are no longer available, although demand for nonprofit services is still high and has even risen above levels seen in 2020–2021.

Nonoko Sato, executive director of the Minnesota Council of Nonprofits, a St. Paul-based organization, stated that “the epidemic has not stopped for a lot of community members, not only for the people being helped but for a lot of frontline nonprofit employees.”

The council has recorded the health of the state’s nonprofit economy in a series of publications dating back to the early days of the epidemic. Those are among of the major conclusions from the council’s most recent 21-page study.

The most recent compilation—the sixth since May 2020—was issued on Thursday and is based on 283 survey responses gathered in July and August as well as other market data.

The needs their organizations are addressing have grown from the previous year, according to almost 60% of nonprofit managers, in part because of inflation, COVID-19, and increases in homelessness, mental health problems, and domestic violence.

Resources to satisfy those demands have increased by around 2%. Alternatively put, pretty flat.

“Some of the smaller rural NGOs stated they were finding it more difficult to get volunteers to bring elders to their medical visits while petrol prices were going up,” Sato added. Some social justice advocacy organizations “were able to hire more individuals after Floyd’s death, and now they’re asking if they’re able to sustain or retain those jobs,” according to the article.

Sato pointed out that several sizable charity organizations that get government reimbursement after offering their customers housing, mental health, and food aid have highlighted that government pay-outs have not been updated for inflation.

According to the research, there is a discrepancy between what grants and contracts will cover and the actual cost of services for nonprofits that get government financing.

According to a nonprofit featured in the study, their group spent 20% more this year than it did in 2021 to restock their food shelf. “AND for our money, we are receiving less food. Our budget is being impacted by the price of food and petrol.

The stock market’s performance may have a significant impact on foundation giving and other types of philanthropy, and recent stock market declines have reduced grant giving. Since small contributors who provide $25 to $100 to nonprofits are among those most affected by inflation, they have also reduced their donations.

According to Sato, “the donors who typically donate that amount of financing are also having trouble.” “It’s what’s known as the regressive consequences of inflation; people with middling incomes and the lowest paid staff members typically struggle more.”

The analysis compares worker trends to statewide trends and finds overlaps. Nonprofits in Minnesota have lost almost 30,000 jobs since 2019, although they still make up 14% of the state’s total employment relative to other industries, which have also suffered losses.

The kinds of lost employment are crucial. According to Sato, the commercial and public sectors are actively hiring individuals with knowledge in technology, data, and programs, making it more difficult for NGOs to keep onto key personnel who may assist them in pursuing additional grant funding or developing new sources of income.

The Minnesota Council of Nonprofits lobbied during the most recent legislative session to establish a $200 million state-backed Charity Relief Fund, which would have been the state’s first pandemic-era relief program devoted specifically to the nonprofit sector.

The idea “ultimately did not pass, with many other proposals in what many regard to be a failed 2022 legislative session,” along with most other proposed expenditures connected to the $9 billion state surplus.

However, during the epidemic, several businesses, charities, local governments, and regular citizens generously offered their support. As a result, Minnesota frequently ranks among the most charitable states in national rankings. In a survey of 130 towns conducted by a lawn care firm last year, Minneapolis came out on top and St. Paul came in eighth for overall generosity.

Give MN’s annual “Give to the Max” event collected a record $34.3 million in 2021, up 12 percent from the previous year, benefitting close to 6,500 organizations around the state. Giving Tuesday is back on November 17. On Nov. 1, GiveMN.org opened for early contributions.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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