June 20, 2011

Minnesota Nonprofits Prepare for Worst as Government Shutdown Looms

Nonprofits that receive federal money were relieved when Washington narrowly averted a government shutdown over a budget impasse last spring.

Nonprofits in Minnesota are now sweating out their own version of a budget showdown.

Minnesota's state government could close if the Democratic governor, Mark Dayton, and Republican-led Legislature fail to reach a budget deal before July 1.

The two sides are so far apart that nonprofits are preparing for the worst. The Minnesota Council of Nonprofits has been holding a series of workshops across the state to give charities advice on issues like financial planning, emergency loans, and crisis communications in case their government money dries up.

The group is also pressing government officials to contain the damage.

Jon Pratt, the council's executive director, sent a letter on Monday to a state district court judge who is considering a request by the governor to ensure that certain key services continue if the government shuts down.

"We strongly urge that any services deemed essential that are delivered by a nonprofit under contract with the State of Minnesota ... be included in continued funding, as if they were delivered by the state itself," the letter said.

The council said many of its members receive government money to "deliver essential health, social services, and support to vulnerable adults and children," and they should be considered "critical core services."

Meanwhile, the Nonprofits Assistance Fund, a group in Minneapolis that gives financial help and training to nonprofits, has offered to give emergency loans to help charities manage cash-flow problems if they lose state money. It is also urging nonprofits to immediately set up "worst-case contingency plans," even if they don't get government contracts or grants.

"You may see a ripple effect in new requests for service, higher demand, or service disruptions elsewhere," it says.

Tell us what's going on in your state. Contact Suzanne Perry to share your story.