Nonprofit Relief Fund

Nonprofit Relief Fund

Overview: MCN, with key partners, is advocating for creation of a one-time Nonprofit Relief Fund providing $200 million for nonprofits statewide. Funding would support organizations facing increased service demand while experiencing financial distress from the COVID-19 pandemic.

Status: Advocacy proposal - not yet approved or funded

Geographic Scope: Minnesota statewide

Funding Source: State-level funding through state's general fund or remaining federal American Rescue Plan (ARP) dollars

Rationale for $200M: Based on:

MCN's COVID Impact Report showing 44% of nonprofits still experiencing increased service demand

Data showing 47% of nonprofits could only operate 12 months or less before financial distress

2020 IRS Masterfile data on nonprofit sector

Minnesota's positive budget forecast

Ongoing lack of COVID relief funding for nonprofits

Eligible Organizations - Prioritized Categories:

Small nonprofits

Rural nonprofits (Greater Minnesota)

Human services organizations

Culturally-specific nonprofits

Grant Structure:

Grant amounts: $50,000 - $150,000

Six grant categories

Geographic allocation: 50% for seven-county metro area; 50% for Greater Minnesota nonprofits

Distribution Process: Lottery-based system modeled on Minnesota Department of Employment and Economic Development (DEED) 2020 Small Business Relief Fund

DEED would accept applications

DEED would assess eligibility

DEED would conduct lottery selection for each of six grant categories

Key Design Features (from community feedback):

Simplified application process

No or minimal reporting from nonprofits

General operating support (flexible funding)

Prioritizes identified nonprofit categories

Why Nonprofits Need Relief:

Nonprofits largely excluded from state and federal relief programs

Increased demand for services paired with funding shortfalls

Diminished workforce capacity

Third largest employer sector in the country

Employ 14% of Minnesota's workforce

Serve as economic multipliers through essential services

Stimulate economic activity through cultural institutions

Advocacy Status: MCN is calling on nonprofits to sign support and contact legislators. In 2021, original request was $50M; increased to $200M based on updated data.

Contact: Ileana, MCN's public policy advocate