State Shutdown Affects MN Nonprofits

As the Legislature and Governor Dayton continue their work toward finding a state budget compromise, Minnesota’s nonprofits face a combined uncertainty about future funding and looming shutdown of government services. During these difficult times, the Minnesota Council of Nonprofits is working diligently to gather resources, influence policymakers, provide training to nonprofit managers, offer strategies for financial planning and crisis communications, and create opportunities for community dialogue. We hope that as a member of MCN, you find us to be a valuable partner as the state’s budget situation unfolds, and that you will both take advantage of the resources we offer, and share with us what you are learning and experiencing.

What We Know

Minnesota is on a path to experience a rare government shutdown on July 1 if a budget deal is not struck by that date, the start of the 2012 fiscal year. We experienced something similar in 2005 — although on a smaller scale, and in a different political and economic environment. Nonprofit organizations will be affected — whether as recipients of government grants or providers of service to populations that count on state resources. While the details remain uncertain, Minnesota’s communities, including nonprofit organizations and those they serve, will feel the impact. MCN has created a central resource webpage, 2011 Nonprofit Budget/Shutdown Crisis, to continue to update nonprofits and others with resources as we learn them.

For more information about how the shutdown might affect Minnesota, here are several recent articles and websites:

What Can Your Nonprofit Do Now?

  1. Financial Planning: Now is the time for staff and boards to engage in contingency planning in case there is a reduction or delays in your government funding. The Nonprofits Assistance Fund is urging all nonprofits that rely on payments from the state to develop a worst case contingency plan as soon as possible, with an emphasis on their cash flow projections.
  2. Communications Planning: If you have a loss or delay of government funding, how will you communicate that to various audiences such as your clients, your donors, the public and possibly the media?
  3. Talk with your state grants manager: We strongly urge organizations to contact your grants manager at the state to ask if an advance payment in June is possible.Your grants manager may be able to give you information about your specific grant and the likelihood of ongoing payments.

MCN and the Nonprofits Assistance Fund are sponsoring five free Government Shutdown Emergency Briefings that will cover the context for the shutdown, crisis communications techniques, financial planning and how organizations can access emergency bridge loans, and open discussion. Click on the following links to register.

In addition, MCN and the Minnesota Council on Foundations have already scheduled a free Coffee with Commissioners: Spencer Cronk, Dept. of Administration on June 24, where you can get more information and ask questions directly to Commissioner Cronk. In this session, you will hear first-hand from Department of Administration Commissioner, Spencer Cronk, how the executive agencies are preparing to move forward in light of no agreed-upon budget between the legislature and the Governor, as well as a potentially looming government shutdown.

What's Next?
The likelihood and details of a government shutdown remains uncertain. MCN will follow the situation closely and will continue to provide information and guidance to nonprofits throughout the month of June. If the Legislature and Governor come to budget agreement, a shutdown won’t occur, but substantial state budget cuts will most certainly impact many nonprofit organizations.

During the last week of June, should a shutdown be imminent, state agencies and the courts will determine a list of “essential services” that will continue during shutdown. This list is likely to include some services delivered by nonprofit organizations and may be a critical time for nonprofit engagement. MCN will be advocating for the sector and may look to MCN members to articulate the essential nature of some services. During a shutdown MCN will continue to offer assistance, information about funding sources and opportunities to tell your story throughout. We hope you will stay actively engaged in this time.

How to Stay Involved

MCN will continue to keep you informed via email at critical junctures and continue to update our 2011 Nonprofit Budget/Shutdown Crisis webpage. If you would like to receive more frequent updates delivered to you, please let Christine Durand know. I encourage you to attend the trainings and briefings we'll be offering to help organizations prepare and cope.

If you or your organization is on Twitter, help share the story of the impact of a shutdown by tweeting with the hashtag #MNshutdown. See what others are saying already.

MCN pledges to be a voice for the critical role that nonprofits play in society and their essential role as partners to government.Despite the uncertain times, we look forward to our close partnership with our members organizations throughout the state as we navigate the state’s economic challenges and make smart, strategic choices for the ongoing strength of our communities.

 
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