St. Paul's Wilder Foundation looks for new ways to boost donations

One of the most well-known nonprofits in Minnesota, the Amherst H. Wilder Foundation, helps thousands of people in need each year with issues such as mental health or housing — and now needs extra support itself.

The century-old St. Paul nonprofit is seeking more donations and grants as it faces concerns over how much it draws from its endowment to offset deficits.

Wilder quietly launched a five-year $17 million campaign that's now in its second year, started consulting services last year to bring in more revenue and held a fundraising gala earlier this month — an annual event launched three years ago.

"The need for our services continues to increase," CFO Bryan Ebensteiner said. "We look at this as an opportunity to increase our donor base and increase our revenue so we are here for the long-term and continue to serve the community for another 100 years."

The organization, one of St. Paul's oldest and largest social service agencies, is different from most nonprofits because it has an endowment, which totaled $144.7 million in 2018. That year, the nonprofit would have had an $11.7 million deficit if it hadn't used its endowment to fill the gap. In a credit report in February, Moody's Investors Service said Wilder had a "high operating reliance on its endowment" to fill its operating deficits.

"Their credit rating is tenuous. The problem is they're drawing too much from their endowment," said Jay Kiedrowski, who teaches courses on nonprofit financial analysis at the University of Minnesota and is a former Wells Fargo executive and budget director for the state, adding that the public could eventually see the repercussions. "If they keep drawing it down, at some point they won't be able to provide the services they are."

Wilder leaders said their long-term goal is to decrease how much it taps from its endowment. They hope to do so by seeking more donations to help fill the financial gaps that will probably always exist for an organization that helps so many clients on Medicaid.

"That gap is why we need these incremental additional sources of revenue," Ebensteiner said.

Wilder also has a new finance team and a new board committee to review spending and use of the endowment. And officials are looking for other new ways to boost revenue, such as reaching out to clients on private insurance and selling off 2 acres of vacant land next to its headquarters.

"Drawing the amount we are [from the endowment] isn't sustainable," said Ebensteiner, who started at Wilder a year ago.

Wilder provides social services to about 8,500 people a year in the east metro through programs such as mental health counseling, supportive housing and child care.

It also has community leadership programs and a mobile food market that brings affordable, fresh foods to neighborhoods in need. Even people who don't use Wilder's services have likely heard its name in headlines because its research arm — one of the nation's largest nonprofit research groups focused on human services — addresses statewide issues such as this year's count of the record number of homeless people in Minnesota.

"We just need to get our story out more," said Michelle Morehouse, the nonprofit's vice president of advancement. "We feel really positive of where we're heading."

While she said people may have heard of Wilder, they may not know what the organization does. That's why the nonprofit boosted marketing staff to publicize how programs help clients, and started free small-group events this year that give people a behind-the-scenes look at Wilder's work. They hope that translates to more donors.

Many people may assume that Wilder doesn't need money with "foundation" in its name, Morehouse said. But unlike most foundations, Wilder doesn't give out grants but instead accepts them to fund its programs. Morehouse said the five-year $17 million operating campaign, which is in the "quiet phase," would help Wilder double the number of clients it serves.

The charity started in 1906 after self-made millionaire Amherst H. Wilder died in his Summit Avenue mansion and left his fortune in a trust to help "poor, sick and needy people" in St. Paul. It built and ran orphanages and opened one of the country's first mental health clinics in the 1920s.

A century later, carrying out the same mission across the east metro, Wilder opened a new $37 million headquarters off University Avenue in 2008. The next year, citing the recession, the organization eliminated 200 jobs. Over the years, Wilder also cut programs, selling nursing homes and closing a camp.

Then in 2017, Moody's downgraded Wilder's financial outlook on $28 million in bonds issued in 2010 for its new headquarters by the St. Paul Port Authority. The national credit-rating agency reaffirmed that in February, saying that "stricter fiscal discipline will prove difficult to fully actualize without change in the operating culture."

Nearly half the nonprofit's revenue is from government contracts, grants and fees, according to 2018 data in Wilder's annual report. About 20% comes from private grants, gifts and fees, and the remainder comes from its endowment. With a growing need for services, Ebensteiner said the nonprofit isn't planning to reduce services or staff this year, but rather to look for ways to increase its donor base and annual giving.

"Certainly it's a challenge, but we feel we have a real opportunity to increase our revenue," he said. Wilder has embraced "change and being able to adapt to what the community's needs are. We will be here for generations to come."

Staff writer Patrick Kennedy contributed to this report. Kelly Smith • 612-673-4141