The Minnesota Historical Society is rebuilding both its revenue stream and staffing following closure of its 26 museums and historic sites at the start of the COVID-19 pandemic, when it lost critical admission dollars and laid off more than a third of its employees.

Now the St. Paul-based nonprofit, which manages some of the state's most popular historic sites from Split Rock Lighthouse on the North Shore to Historic Fort Snelling in the Twin Cities, is embarking on a "reinvestment year," officials say.

The Historical Society — which is unlike most nonprofits because it's largely supported by state taxpayers — is down nearly 20% from pre-pandemic staffing levels and struggling to fill jobs while confronting significantly higher turnover than before the pandemic, said CEO Kent Whitworth, who has led the organization since 2018.

Some current and former employees say, however, that staffing issues existed long before the pandemic — and that poor retention, low salaries and understaffing are part of the reason employees voted to unionize last year.

Whitworth said leaders are addressing those issues with a compensation and benefits study and that they plan to hire about 75 workers by summer 2023, especially in areas that are understaffed — which is partly why the Historical Society is running a deficit this year, he said.

"We've made it a high priority to invest in human resources. Now, it's going to take us some time to do that," Whitworth said. "We clearly acknowledge that this is a real opportunity for us to strengthen our organization."

About two-thirds of the Historical Society's $37 million budget is funded by the state, while about 20% is earned revenue, including admission fees. COVID closures cost the organization $3 million, spurring furloughs of roughly half of the workforce and then layoffs of more than 200 employees.

By summer 2021 the organization had 324 full-time employees, down from 432 full-time workers in June 2020. As of April, the Historical Society staff had grown back to 350 full-time workers. Officials say they expect to have 427 full-time employees by next summer.

The Historical Society received federal COVID relief of $800,000 last year and expects to get $3.5 million this fiscal year or next under the Employee Retention Credit program. Memberships, which had plummeted from 23,000 in 2019 to 14,300, are rising and now stand at about 16,800.

A long rebuild

One of the nation's largest state historical societies, the Minnesota Historical Society isn't alone in its financial struggles. No cultural organization in the state has recovered fully from the pandemic, said Alison Rempel Brown, CEO of the Science Museum of Minnesota. The Science Museum has about 267 employees, about two-thirds of its pre-pandemic staffing levels.

"I haven't heard of anybody being back" to pre-pandemic staffing and revenue levels, she said. "Everybody has challenges financially."

In 2020, more than 100 museums, theaters and other cultural nonprofits formed an informal group — the Minnesota Arts & Cultural Coalition — to share ideas. It's planning a marketing campaign to drum up support for cultural organizations.

"This is an evergreen process: Rebuilding [and] reminding people that we are there," Rempel Brown said.

The Science Museum lost about $15 million from closures and laid off 158 staffers in 2020, nearly 40% of its workforce. Visitors are slowly returning — but donations and revenue are still below 2019 levels, federal COVID relief has ended and the St. Paul nonprofit is taking the unprecedented step of drawing $3 million from its reserves to invest in staffing, she said.

Across Minnesota's nonprofit sector, more than a third of workers filed for unemployment in 2020 — a higher percentage of unemployment claims than in the private or public sectors, according to the Minnesota Council of Nonprofits. Museums and arts organizations that rely on admission dollars were among the hardest hit.

By 2021, the state's nonprofit workforce had shrunk by 7% from the year before, a loss of nearly 30,000 employees. While that was partly due to layoffs, nonprofits also began to see more employees choosing to leave for better pay and hours in what's been dubbed the "Great Resignation."

'State of instability'

After five years as a reference librarian at the Historical Society, Jennifer Kleinjung quit her job in December 2020. She cited low morale, low salaries, short-staffing and mandates requiring some employees to work in person rather than continuing at home.

"I had come to the conclusion that I could not trust the leadership ... to do the right things for the workers, especially frontline staff workers during a pandemic," said Kleinjung, now an independent researcher and small business consultant.

Before she left, she and other employees talked about forming a union. She said they were motivated not just by COVID cuts but by ongoing concerns such as the lack of transparency in pay, and job titles and salaries not keeping pace with the pay at public libraries.

Historical Society employees, citing several issues including low wages, uncompensated work and unfulfilled promises related to diversity and inclusion efforts, organized the union like many other museums and arts organizations nationwide. Leaders of the union, which was certified last year, declined to comment, citing ongoing contract negotiations.

Laura Weber, who was editor of the Historical Society's Minnesota History journal, retired in April 2021 — earlier than she had planned — because she felt overworked and exhausted after seven years there. She and three former employees, who declined to speak publicly, said there seemed to be widespread discontent and turnover, especially among employees of color.

"It's always in a constant state of reorganization ... it was just this constant state of instability," she said.

The Historical Society has been embroiled in public controversy in recent years, particularly as it seeks to broaden its stories to be more inclusive of all Minnesotans. That's sparked funding threats from some legislators and a debate over whether to rename Historic Fort Snelling to reflect its significance for the Dakota.

Whitworth said 12% of current employees are people of color, the highest percentage ever. He said leaders are committed to addressing diversity and inclusion both in its programs and staffing.

"Not only should the stories we tell reflect all of Minnesota, but our workforce should," he said. "As we all know, that's not a flip of a switch, that's a turn of a dial. I think our commitment is clear."