Money runs out, and La Familia agency closes

La Familia Guidance Center, a nonprofit mental health agency launched 16 years ago to serve the unique needs of the Chicano and Latino communities of St. Paul's West Side, has shut its doors in the face of insurmountable financial difficulties.

"It comes to a point where you know you're not going to be able to survive," said Jose Santos Jr., executive director of the agency he co-founded with Roberto Aviña to provide services with mental health professionals who were bilingual and had a deep understanding of bicultural issues.

It was a sad and difficult decision by the agency's board, Santos said.

"It all came down to funding -- nobody put a gun to our head," he said. "When you have a hand and you cut off three fingers, you don't have a hand any more. The one thing we looked at, we didn't want to do a disservice to our community. But there was just no more money.

"I'm a realist. You can't spend what you don't have."

The agency's closure is another blow to the Hispanic community in the Twin Cities and, at the same time, is emblematic of struggles facing smaller nonprofits, which are seeing both government contracts and private support shrivel.

Centro Legal, which provided low-cost legal service for Hispanic immigrants, closed in 2009. The City Inc., a once-prominent Minneapolis advocacy agency, closed last month. La Escuelita, a Latino youth development nonprofit started in 1991 as collaboration between Chicanos Latinos Unidos en Servicio (CLUES) and Minneapolis teachers, is in trouble (its phones are disconnected).

In the case of La Familia Guidance Center, he said, it was also a case of funding for mental health services becoming a lower priority. Demand for the services, especially for those his agency provided, has never been higher.

Medical Assistance and other government programs no longer cover the costs, and foundations have refocused their priorities, Santos said.

"Mental health is not a No. 1 issue," he said. "Foundations now are more into education, and how can you fight that? We're all for education."

Ramsey County Commissioner Rafael Ortega, whose district includes the West Side, said he was saddened and surprised by the closing.

"It's going to be a big loss for the community," he said. "It's just making the gap in the services for the Latino community that much more profound."

La Familia contracted for services with Ramsey, Hennepin, Dakota and Anoka counties, along with providing services in schools and offering private counseling. It also created a scholarship program that has aided more than 50 college students.

Santos said the organization's budget has been close to the bone for the past three years. The staff of about two dozen took 10 percent pay cuts in 2009 and 2010, and some were laid off last year.

Internal Revenue Service records show La Familia's assets in 2008 -- the most recent available data available -- were $915,000, a steady decline since from 2002, when they totaled $1.9 million. The 2008 records also show that more than 1,300 individuals and families were helped by the agency.

Financial records filed with the Minnesota attorney general's office also bear out that La Familia was working on a thin margin. While it had revenues of $4.5 million in 2009, it spent $4.3 million and had other liabilities, leaving a year-end balance of $86,000 -- about half what it had been the year before.

Many nonprofits of a size and budget similar to La Familia's are struggling, said Jon Pratt, executive director of the Minnesota Council of Nonprofits. "I would say that's a tough size."

But organizations like La Familia fill an important service niche, he said, and it represents a significant loss.