Nonprofit Relief Fund

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.

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.

Application Process

Distribution Mechanism: Lottery-based system

Process:

1. Organizations submit applications
2. Minnesota Department of Employment and Economic Development (DEED) reviews applications
3. DEED assesses eligibility
4. DEED conducts lottery drawing for each of six grant categories
5. Grants awarded based on lottery selection

Key Application Features:

• Designed to be as simple as possible
• Minimal to no reporting requirements from nonprofits
• No detailed application materials specified in source documents

Note: As this is a proposed but not yet funded program, complete application details not yet developed. Contact MCN for more information.