Local nonprofits report flat or falling donations as demand rises in the face of inflation

Frederick Melo, Pioneer Press
·4 min read
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At the Catholic Charities Dorothy Day campus in downtown St. Paul, nearly 20 volunteers from Lumen Christi Catholic Church in Highland Park unpacked boxes of fudge-covered Oreo cookies and prepped spaghetti and meatballs on Friday for upward of 300 homeless visitors.

The church’s “29th of the month” volunteer squad has been a consistent presence for roughly 40 years, said church organizer Brian Dusbiber.

What’s also become consistent is the demand for food. Unseasonably warm temperatures haven’t reduced the long lines of clients, which used to ebb and flow at Dorothy Day throughout the month as benefits wore out.

That’s no longer the case. A daily wall chart shows 300 to 381 meals served at breakfast, lunch and dinner, or anywhere from 864 to 1,065 meals per day, every day.

Now, “they’re more consistent,” said Elizabeth Lyden, a spokesperson for Catholic Charities, which serves breakfast, lunch and dinner to the indigent at the Dorothy Day Opportunity Center.

”They don’t go in waves,” Lyden said. “We’ve seen those numbers across the board in terms of increased need.”

Catholic Charities has seen its budget boosted by a recent $1 million donation from the Otto Bremer Trust, which includes a $500,000 challenge grant to match public donations dollar-for-dollar through Nov. 1, 2024.

Elsewhere in the nonprofit sector, however, giving hasn’t necessarily kept pace with rising expenses or an uptick in demand.

From early 2020 into 2022, Minnesotans donated generously to charities and nonprofits throughout the pandemic as missions expanded and needs soared. Surveys and interviews show that’s slowed, a likely reflection of some post-pandemic financial exhaustion and inflationary pressures on corporate and household budgets.

Meanwhile, expenses for nonprofits are up, including in new spending areas such as personal protective equipment and technology to support remote work.

When the Minnesota Council of Nonprofits surveyed dozens of member organizations last summer, 60% of respondents said they could operate at their current funding level for another year or so before financial distress might force some hard choices about staffing and service levels.

“More people are reporting decreased giving from individuals and grants from foundations — about one-third of respondents, the highest number since (the Council of Nonprofits) began surveying nonprofits in March 2020,” reads the council’s wide-ranging report released this fall on the state of the state’s nonprofit sector.

Meanwhile, government stimulus money — including forgivable Paycheck Protection Program loans that kept many businesses afloat during state-mandated closures — is also running dry.

Demand for services rises with inflation

That’s not to say demand for services has abated. According to Hunger Solutions, Minnesotans visited food shelves across the state 5.5 million times in 2022 – a 50% increase compared to 2021 and a record high for Minnesota.

On Tuesday, the Twin Cities Salvation Army reported that their Christmas campaign — which brings in some 75% of their annual revenue — was behind last year’s fundraising pace by nearly $700,000. “We’re not going to know final numbers until a week or two into January, but when we compared this year to where we were last year, we were behind,” said Dan Furry, a spokesman for the organization.

Yet even though the pandemic has ended, requests for services remain high due to record prices for food, gas, rent and utilities, Furry noted. Meanwhile, nonprofits are buffeted at the same time by the same rising expenses. “There are economic conditions that are creating real difficulties for families who are on the bubble,” he said. “And when there’s inflation, services we have to buy are more expensive.”

The fate of nonprofits — including hospitals, theaters, charter schools, food banks and social service organizations — is closely tied to the state’s economy, according to the Council of Nonprofits. The overall number of nonprofit workers in Minnesota has doubled in the past 30 years from 171,000 to 384,000, during which time the nonprofit sector as a share of the state’s workforce grew from 8% in 1993 to 13.7% by the end of 2022.

Minnesota’s 9,000 nonprofits have shed about 5,000 workers compared to pre-pandemic staffing levels in 2019, though hiring has rebounded faster than in some government and for-profit industries. Nonprofits in the Minnesota Council of Nonprofits surveys reported difficulties keeping pace with staffing demands for higher wages at a time when giving is down or flat and expenses are up.

The council’s latest survey was conducted from June to July and drew 197 responses from nonprofit leaders, building on six previous surveys issued beginning in March 2020.

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