Minnesota nonprofits support McCollum bill promising them a voice at the federal table

Minnesota nonprofits are urging Congress to pass legislation that would bolster federal resources for their sector and create some of the same policies and data that businesses have long enjoyed.

Democratic U.S. Rep. Betty McCollum is a co-sponsor of the Nonprofit Stakeholders Engaging and Advancing Together Act — Nonprofit SEAT for short — which was introduced Thursday. It's similar to unsuccessful legislation she authored last year, which pitched a federal office for nonprofits much like the Small Business Administration (SBA) for entrepreneurs and businesses.

"The nonprofit sector's unique ability to harness and direct the generosity, service, and volunteerism of the American people benefits all of us," McCollum said in a statement, "and just as small businesses have the SBA to facilitate access to federal resources, so too should the nonprofit sector."

The legislation, co-sponsored by Republican U.S. Rep. Nancy Mace of South Carolina, would require workforce data on nonprofits to be released quarterly, just like data on businesses.

It also would establish a new White House office to make recommendations on federal policies related to nonprofits, and an advisory board of eight presidential appointees and eight congressional appointees that would report to Congress and advise the president on issues affecting the nonprofit sector.

"This legislation would give the nonprofit sector a voice at the table where decisions are being made at the federal government level," said Marie Ellis, public policy director at the Minnesota Council of Nonprofits. "We're a really large part of the ecosystem of the state and of the country, and yet there's no formalized way for us to provide input to the federal government."

McCollum first proposed similar legislation in 2010, and Minnesota nonprofits and others urged her to reintroduce it last year, Ellis said. The state's Nonprofits Council signed a letter this week backing the legislation, along with the Minnesota Council on Foundations and 19 other Minnesota nonprofits.

"On a big-picture level, the issues that nonprofits deal with as a sector would be higher on the radar of people making our federal laws, and that is a big deal," Ellis said.

In Minnesota, nonprofit employees make up about 14% of the state's workforce. The number of workers has shrunk by nearly 30,000 since before COVID-19, thanks to pandemic-related furloughs, layoffs and staffing shortages as workers grapple with burnout or take jobs in the business or public sectors.

No federal agency collects annual nonprofit employment data, so the legislation would help detect workforce shortages and figure out future remedies, Ellis said. She added that the legislation would give nonprofits more of a voice in small or big ways.

For instance, when the federal government established the Paycheck Protection Program during the pandemic, some nonprofits were eligible for the forgivable loans. But many of them were confused by the application form, which asked for the names of owners. Nonprofits don't have owners like businesses do, Ellis said. Having a voice in federal circles would have likely led to a change on the form.

The legislation could lead to new policies or funding to support nonprofits nationwide, said Michelle Ness, executive director of PRISM, a Golden Valley social services agency.

"I think sometimes the nonprofit sector can be overlooked simply because of our tax [exempt] status," Ness said. "But we're major employers, we're major service providers and important components of our communities. So the greater and more equitable our presence can be at the federal level ... is incredibly important."

The legislation comes as many nonprofits have been on the front lines of responding to the pandemic, providing Minnesotans in need with record amounts of food assistance, housing aid or mental health support.

"This seems like a really important piece of legislation to recognize that, and to bolster the nonprofit sector," said Abigail Vavra, public policy and compliance counsel at Minneapolis-based Fraser, which provides early childhood mental health services. "I think it's really great members of Congress are recognizing the role nonprofits play in our communities, and this is an important step in strengthening our community resources."