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Nonprofits getting hit by economy, bracing for cuts

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Nonprofits getting hit by economy, bracing for cuts
Cottage Grove Minnesota 7584 80th Street South 55016

Evidence of the tightening economy lies within Stone Soup Thrift Shop's ledger.

Sales are up about $1,000 per month, but so is the number of people in need of vouchers for free goods, said Majel Carroll, board president of Basic Needs Inc. of South Washington County, the shop's parent organization.

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Competition for grant money is toughening, and the organization sent out letters two weeks ago for the first time ever seeking donations from individuals Carroll said. Last week, she'd gotten only five or six responses to the 300 letters, she said.

"I suspect that because of the economy overall everything's going to be down," Caroll said.

Basic Needs isn't alone.

Leaders at Washington County nonprofit organizations say with the availability of government and foundation money shrinking, and the need for their services increasing, they're planning for tough financial times ahead.

Human Services Inc. is no longer applying for any new state grants, because they believe that funding will be pulled back due to the state's projected $5 billion budget deficit for the next biennium, said Chief Executive Officer Mark S. Kuppe in an e-mail.

Kuppe expects Human Services Inc. will really see the impact of the state's budget problem around July. The organization gets money from the county, and gets state money for mental health and chemical health that's funneled through the county, he said.

Human Services Inc., which has an office in Cottage Grove, provides services to the elderly, such as meals on wheels, treatment programs for chemically dependent and abusive people, counseling and intervention services for people who've been abused, adult mental health services and child and family health services.

"Because we serve the most vulnerable clients who have complex and chronic mental illness or chemical dependency, it is unclear how willing the state and the county will be to not jeopardize that funding," Kuppe said. "As a safety net provider we will continue to provide as much service as we can to that population, however there is also a limit to what we can handle."

Kuppe said the organization's not seeing its client base grow yet, but he expects it to as more people lose their jobs.

"It usually takes several months for someone who has lost their job to feel the emotional impact of that event," he said. They believe they will find work in those first 30 to 90 days, but if they don't, then distress sets in, he said.

"Depression rises, alcohol use increases, domestic violence increases and then we as an agency feel the impact," he said.

Another local nonprofit, the Youth Service Bureau will also be affected by lawmakers' budget priorities.

About half of the organization's funding comes from government sources, said Executive Director Paul Weiler.

The Youth Service Bureau gets money from the county to provide court diversion services. That means juvenile offenders get sent to Youth Service Bureau programs instead of going through the court system. Weiler says intervention programs like the Youth Service Bureau's save the government money in the long run, so he's hoping elected decision makers will continue to support the bureau's programs. He cites a Wilder Research study showing that for every $1 invested in intervention, society recoups $8 through reduced adult crime and reduced need for social services. Still, Weiler says with budget deficit facing state legislators, and cuts to local government aid for cities, the organization is preparing different budget scenarios in anticipation of potential cuts.

Eighty percent of the bureau's money goes to pay personnel, he said.

Another major source of the organization's funding, the St. Croix Area United Way, has already asked the bureau to absorb a 10 percent funding cut. Other potential funding sources, such as charitable foundations have less to give too, Weiler said. 

Despite what looks to be a tough road ahead, Weiler said he expects the organization to make it to the other side of this economic downturn.

"We have been around for 30 years and we have weathered economic downturns before," he said. "We anticipate being here another 30 years but it's going to be a struggle."

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