Minnesota nonprofits slash staff, budgets

Barb LaValleur was desperate. The block nurse program she oversees in St. Paul had just lost two-thirds of its funding and five of seven staff members -- but still needed to assist 400 senior citizens in the neighborhood.

Things got so bad, LaValleur didn't even get paid this month. So last Sunday, she placed advertisements in church bulletins on St. Paul's East Side recruiting "saints" and "angels," volunteers who would answer phones or drive elderly residents to doctors appointments.

"My first saint is coming at 1 o'clock today," LaValleur jokingly told a crowd of several hundred at a Tuesday forum sponsored by the Minnesota Council of Nonprofits. "You've got to be creative and keep a sense of humor during times like this."

"Times like this" is the polite way to describe the economic downturn that is hitting Minnesota's $21 billion nonprofit community, which delivers a significant portion of the state's health and human services, environmental and arts programs.

At the forum in St. Paul, the council released the results of a new survey of 600 nonprofit groups around the state, showing LaValleur's situation is not unique.

One in four Minnesota nonprofit agencies has cut staffing this year, according to the survey, and nearly half have slashed their budgets in response to the growing economic crisis. At the same time, 42 percent said more people are coming to their agencies asking for help.

Funding from both government and individual donors appears to be spiralling down: 47 percent of those surveyed report fewer individual donations.

And the survey was taken before Gov. Tim Pawlenty begins the process of "unallotting" funding already committed by the state, Pratt said. Plus, the prospects for stable or increased funding for nonprofits at the Legislature this session are not good.

"I'm very anxious," said Len Price, executive director of the Minnesota Conservation Corps, a Maplewood-based agency that sends hundreds of volunteers across the state to help with conservation projects. "We just don't know what's on the horizon."

The conservation corps is among the nonprofits that have lost federal funding. This year, the corps had to pick up the tab for 85 AmeriCorps volunteers normally funded by Washington. Next year, it's slated to receive about a third of its original federal payment, Price said.

Agencies that rely heavily on individual donations are among those hardest hit, the survey indicated, because fewer individuals are donating and those that do often are donating less money.

Of the employment agencies surveyed, 27 percent said they didn't expect to meet individual fundraising goals, as did roughly 23 percent of those agencies involved with arts, culture and education.

Nonprofits reported they're considering everything from mergers to increased volunteer staffing. But cutting staff is particularly common.

The popular Neighborhood House in St. Paul, for example, cut $1 million (just under 20 percent) from its budget this month, said President Armando Camacho. Ten staff were laid off and another eight were assigned fewer hours, he said, adding, "It's been very difficult."

As for the block nurse program on St. Paul's Payne-Phalen area, LaValleur has just one part-time worker left. But she's recruited three additional volunteer nurses for the program, and is boldly soliciting help in the neighborhood.

Recently, Arlington Hills Presbyterian Church gave the program a $1,000 unsolicited donation, she said. She then asked nearby St. Casimir's Catholic Church to match it, and it did. Now she's asking Gustavus Adolphus Lutheran Church for a match, and is awaiting for a response.

"Other churches should expect to hear from me!" she proclaimed.