ST. PAUL — It appears the coronavirus pandemic had a lasting impact on Minnesota’s nonprofits.
During a 12-month period from April 2020 to March 2021, 186 nonprofits ceased operations, according to information from the Minnesota Attorney General’s Office.
Organizations representing causes ranging from religion, disease, poverty, climate change and education were among those that ended operations.
“We are seeing the shaking out of the smaller organizations,” said Troy Linck, marketing manager for the arts advocacy group COMPAS in St. Paul. “We are at a crossroads.”
Dawne Brown White, director of COMPAS, said the tally of nonprofits that closed disguise a deeper problem. She said that hundreds of other nonprofits have slashed services to almost nothing.
Typical is Martha’s Closet in St. Paul, which closed in February. It is now open — barely — 2.5 hours a week to provide clothing for an average of three low-income women.
“We are getting tons of donated clothes. People clean out their closets,” said Martha’s Closet director Sandy White. “But no one is coming in to take them.”
Intent to dissolve
Officials cite a number of factors during the pandemic — increased need, fewer volunteers, difficulty holding fundraisers — as reasons nonprofits were vulnerable during the pandemic.
Nationally, more than one-third of nonprofits are in danger of closing in the next two years because of the pandemic, according to the website Candid, a philanthropy advocacy nonprofit.
The sectors hit hardest have been education, human services, and arts, culture and humanities. Each of those categories lost more than 10 percent of their nonprofits in one year.
In Minnesota, the pandemic’s toll is not yet known, because the official count of the Minnesota Secretary of State’s Office is more than one year behind. But the state attorney general’s office provided an early look at the damage. Nonprofits must fill out an “intent to disband” form when they dissolve, and 186 did so in the 12-month period ending in March 2021.
Here’s a sampling of some of the 186 that closed:
- 23 churches or religious organizations, including Light of the World Lutheran Church, Medo Evangelical Lutheran Church and Maranatha Church.
- Six related to youth sports, including the Woodbury Sports Foundation.
- Two United Ways, in Faribault and Redwood County.
- 17 involving health, including the St. Valentine Epilepsy Foundation and With One Breath for cystic fibrosis.
- Six involving the arts, including Imagined Theater, Soap Factory and Johnny B. Goode to promote Native American paintings.
- Eight connected to education.
Officials at the Minnesota Council of Nonprofits said the state’s casualties won’t be nearly as high as the national projection of one-third of nonprofits. The situation is grim, but there are signs it may be improving: In a March survey, 30 percent predicted “financial stress” in six months, an improvement over May 2020 when 61 percent reported such distress.
In Minnesota, there were 31,528 nonprofits in 2016, the most recent year available, according to the website independentsector.org. The pandemic took a toll on them in several ways, according to nonprofit officials. It forced some into a spiraling crisis with greater demand but fewer fundraisers and volunteers and less money.
The nonprofits hit hardest tended to be smaller and with minimal cash reserves, said John Wurm, spokesman for the Minnesota Council of Nonprofits. “Arts organizations were hit very hard,” he said.
Hard to let go
Many have not formally closed but are on the brink of extinction. COMPAS’ White said that’s because the smallest nonprofits — consisting of a single founder — find it difficult to let go of their dream.
White knows from personal experience. She had what she thought was a great idea — a mobile dental clinic — which she finally was forced to shut down in 2012.
“I could not say goodbye to my baby,” she said.
One bright spot for nonprofits last year was the area of racial justice. George Floyd’s May 2020 murder by a Minneapolis police officer sparked a commitment from many to those issues.
The Council of Nonprofits recognized this when it gave advice to its 2,200 members: Shift focus to racial justice. That was the only change of mission recommended in its “Strategies for Recovery” report from March.
To follow that advice, many nonprofits have shut down to rethink their missions.
“Many have at least been mothballed. They are refocusing toward the equity issue,” said COMPAS’ Linck. “This is the way the world’s going to look going forward.”
Martha’s Closet does have a component of racial equity — it serves low-income women, many of them women of color.
To serve them, director White has a steely determination to stay open. “Women still need those things,” she said.