Legislators fail to deliver on Minnesota nonprofits' pitch for $200M in COVID-19 funding

Minnesota's nonprofits failed to win special COVID-19 aid from the Legislature this session, despite their appeal for $200 million in one-time pandemic relief.

The Minnesota Council of Nonprofits, which led the lobbying effort, said that the state's nonprofits — which make up about 14% of Minnesota's workforce — continue to battle rising costs while getting less government support than the public and private sectors.

Following the end of the regular session last week, Gov. Tim Walz hasn't announced a special session to wrap up legislative work. Despite the state's projected nearly $9.3 billion budget surplus, the lack of funding for nonprofits is among many issues left unresolved by legislators.

"I'm extremely frustrated by the lack of COVID relief for nonprofits," said Marie Ellis, public policy director at the nonprofits council. "There's a real human cost to that legislative work not getting done."

Hunger Solutions Minnesota pushed for $8 million for food shelves, food banks and meal programs and $15 million for capital investments, such as expanding food shelves. Neither proposal passed, leaving Minnesota's 350-plus food shelves and seven food banks without additional state aid despite inflation driving up both food costs and new clients.

"It's going to feel like a [funding] cut," said Leah Gardner, policy director at Hunger Solutions. "It's kind of a perfect storm. ... The need is real. It can't wait."

More Minnesotans visited food shelves in 2020 than in any other year on record. The number of food shelf visitors dropped 5% in 2021, edging closer to pre-pandemic levels. But a survey by Hunger Solutions found that 70% of food shelves are seeing or expect to see an increase in visits this year as special federal COVID aid ends.

"It's a roller coaster, and we're trending up," said Jason Viana, executive director of the Open Door Pantry, an Eagan-based food shelf. "I anticipate every food shelf that relies on this funding will feel the pinch."

In Burnsville, more than 500 households use Open Door's drive-through food distribution every week. The nonprofit is serving twice the number of people it helped before the pandemic. Plus, its food costs have doubled in the last year. With pandemic-inspired generosity fading and no extra state funding in sight, Viana is scrambling to find other donations — and considering buying less food.

"It really feels like our Legislature is devaluing our community," he said. "Usually in a world of partisan bickering, providing basic needs should be a safe thing to agree on."

Brooklyn Center's CAPI food shelf is serving triple the number of people it did before the pandemic, including many Asian and Hispanic families. It provides culturally specific food, but that means it has to buy more expensive items instead of relying on free food donated by grocery stores, said Ekta Prakash, CAPI's CEO.

Nonprofits have been on the front lines of providing resources to people in need throughout the pandemic and the unrest after police killed George Floyd and Daunte Wright, Prakash said.

"Nonprofits play a vital role supporting the community," she said. "You need to invest in these organizations."

Other nonprofit-specific legislation failed to pass, such as GOP-backed restrictions to bolster oversight of nonprofits — including barring newly formed nonprofits from getting state money, a measure opposed by the Council of Nonprofits.

But so did the $200 million one-time nonprofit relief fund, which would've prioritized funding for culturally specific nonprofits, human services and small nonprofits, especially those outside the Twin Cities. Ellis said nonprofits have been largely left out of state and federal aid, with only about 4% of all federal forgivable Paycheck Protection Program loans going to nonprofits.

Any extra federal aid received by the Phyllis Wheatley Community Center in Minneapolis is ending, and executive director Suzanne Fuller Burks is hunting for foundation grants and other funding that could help support her growing operational costs.

"I don't know if the Legislature really understands the impact COVID has had on our entire organization," she said. "We're talking about people's basic needs."

No universal school meals

Nonprofits also lobbied at the Capitol for funding free school breakfasts and lunches for all Minnesota kids, which proponents said would eliminate racial gaps, reduce the stigma of seeking help and ensure all students have access to food. Gardner was hopeful when Walz included more than $180 million in his budget for universal school breakfasts and lunches. But that also failed at the Legislature.

During the pandemic, federal aid paid for free school meals for all students. But that program is set to expire at the end of June, leaving more than half a million kids at risk of losing access to meals, according to Hunger Solutions. Families must qualify for free or reduced-price school meals, but many families that are struggling paycheck to paycheck narrowly miss qualifying for the meals, Gardner said.

"This was just a very difficult legislative session to get bipartisan agreement on anything," Gardner said. "It is super disappointing."