Clients, $1B in services up in air

What's an essential state service? Minnesota's nonprofits are smack in the middle of the shutdown debate.

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Ed and Kay Loy prepared to pay Jim Osweiler, of Store to Door, for groceries he delivered to their senior living apartment in Bloomington. The Loys, who have been married 54 years, say they depend heavily on the service.

Photo: Elizabeth Flores, Star Tribune

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Check out the agendas for the state shutdown's "special master" and it's hard to miss the petitions of nearly 30 nonprofits seeking funds for everything from welfare-to-work programs to housing for the homeless.

Minnesota grants about $1 billion a year to nearly 1,900 nonprofit groups to deliver health, human services, jobs programs and more. Most are continuing to do the work required by their state contracts, but have no idea if or when they'll get paid. And they worry about their clients.

Parents receiving welfare, for example, are required by law to look for work, to work, or go to school. But funding for those services ended last week.

"Parents get sanctioned from the program if they don't do that,'' said Judy Halper, CEO of Jewish Family and Children's Service of Minneapolis, which worries how long it can offer those services with payments.

"We're holding our breaths to see what happens.''

The nonprofits' petitions shed light on the fine line between what is considered an essential and nonessential state service. Is it a child abuse prevention program? Housing assistance for the mentally ill?

From the start, nonprofit hospitals, nursing homes and certain health services were among the "core" services approved for state funding, said Jon Pratt, executive director of the Minnesota Council of Nonprofits.

On Thursday, Ramsey County Chief Judge Kathleen Gearin added some more, including a request from Blind Inc., a Minneapolis blindness adjustment training center, and requests from several nonprofits for continued criminal background checks for new hires.

But countless others remain in limbo, he said. Even nonprofits that get no state funding, but rely on federal grants routed through the state, can't get their grants unless the service is deemed essential.

"They [nonprofits] are saying, 'It's not your money, so why not just pass it along?'" said Pratt.

Essential or not?

The Minnesota Indian Women Resource Center petitioned for continued funding for four state contracts, and received mixed news, said Suzanne Koepplinger, executive director.

Three programs were deemed essential: a sexual assault advocate for urban Indian women, a "healing journey" program for traumatized women, and a coordinator for a program to preserve and reunify Indian families. The funding request for its community learning center was denied.

While the decision was a "huge relief," Koepplinger said, she remains upset about the shutdown's impact. Her agency spent the past few months making contingency plans for budget cuts, halting hiring, checking reserves.

"We have so many better things to do than respond to our elected officials' inability to get their jobs done," Koepplinger said.

The St. Paul-based nonprofit Store to Door, meanwhile, had just one request of the special master -- funding for its grocery shopping and delivery service for homebound seniors.

Without its $37,000 quarterly check, dozens of seniors would start losing their grocery services, said executive director Mary Jo Schifsky.

"If we didn't get the funding we petitioned for, we'd have to start reducing 60 to 70 grocery trips a week," she said.

Schifsky said she's now learned that her funding will continue.

Some nonprofits that are not appealing to the special master are looking at ways to trim their budgets, in particular with staff layoffs. Others are looking for short-term loans.

More than 40 have applied to tap a $2 million loan fund created by the Nonprofit Assistance Fund to help nonprofits meet their payrolls for six weeks, said Janet Ogden-Brackett, associate director of the fund.

The Conservation Corps of Minnesota and Iowa is among the nonprofits considering tapping it. Until last week, it had 200 AmeriCorps volunteers working in state parks doing everything from tree removal to trail maintenance.

With state parks closed, it suddenly needed to find camping places for about 100 volunteers, hundreds of new jobs for volunteers and a place to store equipment.

"We all want to know: How long will this go on?" said Len Price, executive director of the corps. "The uncertainty drives you crazy."

Jean Hopfensperger • 612-673-4511

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