Minnesota nonprofits lost an estimated $1 billion in revenue in April because the COVID-19 pandemic forced the cancellation of fundraising events and reductions or closures of other revenue-generating programs.
The Minnesota Council of Nonprofits has released the results of a survey of the state's nonprofits, part of a national survey conducted in partnership with the Federal Reserve Bank on how the coronavirus outbreak and economic downturn are affecting the sector.
Arts and health nonprofits took the biggest hits, but the entire sector is facing a financial crisis, with nearly all nonprofits facing some level of disruption.
"It's going to be substantial impact for an unknown period of time," said Jon Pratt, executive director of the statewide council. "We're going to have to do things differently because the needs will have shifted dramatically, but also the resource base."
Minnesota has more than 9,000 nonprofits, with a record 385,000 workers who make up 13.3% of the state's workforce. In late March, Gov. Tim Walz ordered nonessential businesses to close and residents to stay home in an effort to stem the coronavirus contagion.
Many nonprofits don't have much of a financial cushion and have seen critical revenue evaporate — from program fees to charitable giving. Of 528 nonprofits that responded to the survey, nearly half have three months of cash or less on hand, expecting to be in financial distress within a matter of months.
As a result, some nonprofits may not survive the crisis. Others will shrink in size or change how they deliver their services, Pratt said.
To compensate for lost revenue, nearly half the nonprofits either decreased staffing or expect to do so. As of early April, the most recent data available, nonprofits accounted for 6% of unemployment claims in Minnesota. Some nonprofits, such as the Minnesota Children's Museum, Science Museum of Minnesota and Minnesota Historical Society, have issued furloughs or temporary layoffs.
