State government depends on community-based nonprofits to provide efficient and effective services that would be more costly if provided directly by the state or by others.
Each year, Minnesota’s state government invests hundreds of millions of dollars in the nonprofit sector. The nonprofit sector, as a whole, earns about a third of its total revenue by providing services under contracts and agreements with governments. For some areas of the nonprofit sector- the financial implications of the partnership with government are even more dramatic. On average, human service nonprofit budgets are made up of about 70% government funds- these are called “grants” in Minnesota- but the majority of which really behave as contracts.
Many eligible nonprofits currently face significant barriers in accessing state funding.
Rural-based, small, and/or BIPOC-serving nonprofits tend to receive disproportionately less state funding than larger, established, and/or Twin Cities-based nonprofits. We also know that state agencies face their own obstacles such as limited funding for grants administration, lack of technology to support grants management, and more.
We recognize that many of these reforms could potentially be beneficial for state agencies and their staff- reducing administrative burden while strengthening our mutual capability to focus on improving outcomes and strengthening our communities’ well-being across the state.
If policy provisions are developed without input from nonprofits or without consideration of how nonprofits will be impacted, it’s likely the provisions will be at best ineffective and at worst harmful.
We need you to advocate with us for positive reform! Complete our Interest Form to receive updates on state grant reform efforts and opportunities for nonprofits to get involved.