Target Foundation announces new funding focus for Twin Cities nonprofits

The Target Foundation is shifting its focus on how it gives nonprofit grants, joining a growing number of Twin Cities philanthropies in zeroing in on equity issues.

The Minneapolis-based corporate foundation, which donates about $9 million annually to Twin Cities nonprofits, announced on Thursday a new mission to promote equity in the metro area through four areas: entrepreneurship, workforce development, housing, and "asset building" to marginalized communities.

The news comes after the foundation notified nonprofits earlier this year that it would be revamping its funding, cutting longtime support to some arts and social services ­organizations.

Target, which ranked seventh among corporate foundations for giving in Minnesota in 2015, declined an interview request on Thursday. But in a blog post about the changes to its "Hometown Grants," Tracey Burton, the senior director of the foundation, said that it will "help to strengthen the systems and organizations that drive shared prosperity for all, investing in partners that help reshape economic and social structures in our communities."

Target's change reflects a broader trend of funders retooling how they give money and nonprofits starting equity initiatives.

Earlier this year, Wells Fargo announced it was narrowing its focus for philanthropic giving, funding programs that work on affordable housing, financial health and growing small businesses instead of a broader set of goals. Last year, after years of declining revenue, the Greater Twin Cities United Way said it was narrowing its focus, eliminating some grant-making categories as it shifted to focus on equity.

Equity has emerged as a hot issue for nonprofits — from the Science Museum of Minnesota in St. Paul launching an equity initiative to increase access to the museum to the YMCA of the Greater Twin Cities starting an exhibit in Minneapolis this year on equity, diversity and inclusion issues.

Target's new focus on equity means supporting organizations that serve marginalized communities and are "catalyzing economic development in the Twin Cities' poorest neighborhoods."

"As the demographics of our region continue to shift, the costs of inequality will grow," the Target Foundation said online in its explanation of its new grant priorities.

Minnesota has become increasingly diverse, yet the state has major racial disparities, such as in the achievement gap, with the lowest graduation rates of any state for black and Hispanic students.

"This focus on equity and shared prosperity and opportunity seems like it makes a lot of sense in the Twin Cities," said Susie Brown, president of the Minnesota Council on Foundations. "They're trying to address well-documented disparities."

Earlier this year, the Target Foundation notified about 150 nonprofits that had received funding that it was revamping its funding priorities. Minnesota nonprofits have to submit an initial inquiry by Sept. 30 before a full application will be accepted; the foundation said it will notify nonprofits about decisions on grants ranging from $25,000 to $200,000 by Dec. 31.

Some nonprofit leaders worry their organizations will no longer fit Target's priorities.

Target decreased funding to Metro Meals on Wheels, a Minneapolis nonprofit that delivers meals to seniors and individuals with disabilities that had gotten about $35,000 a year from the foundation for two decades. Patrick Rowan, who runs the nonprofit, said he wasn't surprised by Target's new priorities and said he will apply for a grant but it's unlikely Meals on Wheels will fit Target's guidelines.

"We're disappointed," he said, adding that it comes as philanthropic funding for senior services has declined despite a growing need. "It's unfortunate; elders deal with very complex issues."

The Bridge for Youth in Minneapolis, which works with youth homelessness, also saw its funding from Target decline by $36,000 this year, but Executive Director Michelle Basham hopes the nonprofit will still qualify for Target's new grants.

Target's new focus on equity is "exactly spot on with making a measurable difference," Basham said. "Minnesota does continue to be a standout in the country in terms of racial disparities."

The Target Foundation said it's offering up to three years of grants to nonprofits to help bridge the transition. The foundation is also paying for training offered free through next year on how to "navigate through change" with storytelling nonprofit Pollen; GiveMN, which is best known for the annual Give to the Max Day fundraiser; and Propel Nonprofits, which helps nonprofits on finances and obtaining loans.

"It illustrates their genuine commitment to their grantees," said Jake Blumberg, executive director of GiveMN.

Target has long been a major charitable donor in the Twin Cities since the corporation was founded in Minneapolis a century ago by the Dayton family. The corporation, separate from the foundation, said it also gives about $5 million a year to arts programs in the Twin Cities.

Kelly Smith • 612-673-4141