Already reeling from the Great Recession and a challenging fundraising climate, state nonprofits are bracing for another blow should Minnesota’s government shut down for an extended period of time and, subsequently, stop payments.

Minnetonka-based Jewish Family & Children’s Service of Minneapolis (JFCS) is one such nonprofit.

“Many of our programs are suffering the impacts of the shutdown,” JFCS Chief Executive Officer Judy Halper told Patch Friday. 

Local Impacts

Nonprofits, like JFCS, often receive government funding, whether from the local, state or federal level. In some cases, federal dollars are dispersed through state agencies and if there’s no one at the state level to receive receipts and allocate money, nonprofits are left without that funding.

Halper estimates that of the 40 community services that JFCS provides, including mental health case management and state-subsidized daycare, more than half will be affected by the government shutdown.

Friday afternoon, Halper will sit before former Chief Justice Kathleen Blatz, who was named Special Master earlier this week. Halper has been chosen to argue that the Minnesota Family Investment Program (MFIP), the state's welfare reform program for low-income families with children, is an essential government service and should continue to receive state funding in a shutdown.

Blatz also heard appeals this morning from organizations as varied as the Minnesota Aids Project, Partners for Affordable Housing and the Minnesota coalitions for battered women (MCBW) and the homeless.   

Beyond the families this shutdown is affecting today, an extended shutdown could force nonprofits statewide to discontinue programming, cut staffing or shutter altogether, either temporarily or permanently. 

“Nonprofits are businesses,” Halper said. “We are doing what we can, we can cut back staff and staff hours and do what we have to do in order to serve people for as long as we can. We’re just hoping for a short shutdown.”

And JCFS isn’t alone. Local families who depend on government assistance to cover childcare costs at the Ridgedale YMCA may also see a drastic shift in received services because of the government shutdown. 

“We’ve made decisions, and communicated those with customers impacted,” Bette Fenton, YMCA spokeswoman said.

While Fenton declined to go into the specifics of how many families would be affected or what contingency plans have been put in place for those who depend on state subsidized childcare at the local YMCA, she did acknowledge the significant impact the shutdown will have.

“Childcare would be huge,” Fenton told Patch.

There are some brighter spots on the Minnetonka nonprofit scene, however.

Cathy Maes, executive director of Minnetonka-based ICA Foodshelf, said that unlike many other local nonprofits, ICA does not depend on state money to operate. That means that this shutdown will not directly hurt the local food pantry. But Maes does expect more demand from residents who are individually hurt by the shutdown. 

“We anticipate people then coming into our locations who normally have not used us,” she said.

Wednesday’s ruling on essential services by Ramsey County Judge Kathleen Gearin also spared Minnetonka-based St. David’s Center for Child & Family Development most of the grief that a state government shutdown would have caused, mostly because medical assistance payments were ruled essential.

“It’s a tremendous relief—one for the families that we serve but also for the broader community,” Maureen Walsh director of community relations and development at St. David's Center said. “Organizations won’t have to take on the burden of cash flowing services during the interim of the shutdown period.”

Fifty-eight percent of St. David’s annual $17.6 million budget, comes from state medical assistance payments. Walsh said that 5,049 local individuals rely on services that St. David’s Center provides because of that funding.

Although relief came with this week's ruling, St. David’s had been preparing for the worst. The center had amassed, through expense reductions and a line of credit, enough funds to withstand two months of a state government shutdown.

After that though, it would have been up to this local nonprofit to foot the bill for the services they provide. Shutting the doors would not have been an option, Walsh said, because their services are mandated.

“We are not set up to do that. We operate on thin margins as it is,” Walsh said. “Something would have fallen through the cracks.”

There does remain one spot of uncertainty for the center, however.  Seventy of the 300 children in their preschool program do rely on funds provided by Hennepin County for their respite care. Until Hennepin County confirms that funding for those 70 children will continue, the center is operating on a wait-and-see mode for those cases.

Minnetonka’s Opportunity Partners will also continue to receive payments for the majority of the programs that they provide. That’s because Gearin ruled that the state must meet its obligations to fund Medicaid, Group Residential Housing (GRH), Minnesota Supplemental Aid (MSA), and General Assistance (GA) programs.

However, State Vocational Rehabilitation Services (SVRS) and Semi-Independent Living Services (SILS) will not be funded during the shutdown—and both are services that Opportunity Partners provides to their local clients.

That said, Opportunity Partners said they hope to continue the, “delivery of all of our services during a shutdown, including services provided within the SILS and Vocational Rehabilitation areas that may not have been part of the judge’s orders.”

Disability trade associations, Association of Residential Resources in Minnesota (ARRM) and the Minnesota Habilitation Coalition (MHC), today appealed to the special master to fund both SVRS and SILS.

Blatz will not rule on any of the petitions she hears today. Instead she will consider the arguments made and the degree of authority she was given to expand the list of critical core services. Blatz is expected to begin ruling on the petitions as early as Saturday, July 2.

There is no doubt that many nonprofits across the state, including Minnetonka’s Opportunity Partners are anxiously awaiting her word.

Statewide Impacts

Minnesota’s 3,750 nonprofits employ one of every nine workers in the state, according to the Minnesota Council of Nonprofits, earning wages of $13.2 billion in 2009. Slightly more than half of those workers—about 153,000—are in the Twin Cities metro area.

“If (the shutdown) lasts more than three or four weeks, I think it’s at that point that you’re going to start seeing nonprofits getting into the next phase of their contingency planning,” said Frank Forsberg, senior vice president of community impact for the Greater Twin Cities United Way, which has nearly 200 agency partners and helps fund more than 400 programs.

Forsberg said United Way officials work with partners on an ongoing basis to create multiple contingency plans and put cash-flow resources in places to bridge any unforeseen or significant losses of funding, state or otherwise.

With the writing on the wall, he said planning elevated a month ago when a shutdown seemed inevitable.

The United Way, which raised $88.5 million in 2010, altered its disbursement schedule to help its sponsored programs to continue running.

Typically, Forsberg said, United Way pays monthly installments to its partners. To help protect the programs during the shutdown, United Way advanced three months’ worth of allocations for agencies most impacted.

“We are hearing from a lot of our members that they are making a lot of tough decisions,” said Christine Durand, spokesperson for the Minnesota Council of Nonprofits (MCN). Among the kinds of nonprofit work not included in state funding during the shutdown: childcare, domestic-violence prevention and assistance, food assistance, arts and environment and weatherization.

MCN briefings to help nonprofit groups grapple with the effects of a shutdown began three weeks ago and will continue, Durand said. Among the topics: how to lay off and furlough workers.

Their work “touches every Minnesotan in some way, shape or form,” Durand said, but “they can’t run on air.”

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Follow the latest shutdown developments on Minnetonka Patch:

July 5: State of Shutdown: Impact on Health Department

July 5: State of Shutdown: Impact on Minnetonka Public Safety

July 1: State of Shutdown: Replay of Final Hours

July 1: State of Shutdown: Impact on City of Minnetonka

July 1: State of Shutdown: Impact on Locals

July 1: State of Shutdown: Impact on Minnetonka Nonprofits

July 1: State of Shutdown: Impact on Minnetonka Schools

June 30: Countdown to Shutdown

June 30: Teen Clinics Await Their Fate During Shutdown

June 30: Does Shutdown Impact You?

June 29: Judge Rules on Essential Services

June 29: MnDOT to City: 'Work Must Stop for Shutdown'

June 24: Local Nonprofits, Hospitals Brace for Shutdown

June 23: 169 Project, Taxpayers: Political Pawns as Shutdown Looms?

June 23: State Shutdown Would Freeze DNR, Close State Parks

June 23: Hennepin County Battens Down Hatches for Shutdown

Share your shutdown photos or stories with Minnetonka Editor Katelynn Metz.

Keep up with shutdown developments on our Minnetonka Patch Facebook page.

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Shutdown coverage from around the state: 

July 4:
The Business Times: Holiday weekend in Minnesota with state services idle
Kare 11: Businesses struggling in shutdown but still open
Kare 11: Minnesota Zoo back open, horse track still closed
Minnesota Public Radio: Marking July 4th during a government shutdown
Northland’s News Center: Tourists Hit Minnesota State Parks Despite Government Shut Down
Politico: Cooling-off period in Minnesota
Pioneer Press: Libertarians see opportunity in Minnesota shutdown
Pioneer Press: Disabled girl's family on edge without Minnesota aid during shutdown
Star Tribune: Businesses feel immediate bite
WDAY: Family Camps in Own Backyard due to Minnesota Shutdown

July 3:
CNN: Minnesota government shutdown could last days longer
KARE 11: Food shelves bracing for government shutdown impact
KSTP-TV: Shutdown Creates Block on Background Checks
Pioneer Press: Battle lines that preceded state government shutdown were drawn between Dayton, GOP after last fall's elections
Politico: Minnesota mean at heart of government shutdown
Reuters: Minnesotans frustrated, angry over state government shutdown
Star Tribune: Shutdown cost will bring sticker shock
Star Tribune: Losing 'non-essential' services hurts
Star Tribune: Dozens flow in at outset of Minnesota Zoo reopening
WDAY: No Talks Expected Before Tuesday for Minnesota Shutdown

July 2:
Duluth News Tribune: Minnesota state employees call for budget compromise
NPR: Minnesota Shutdown Hits Vulnerable First
New York Times: Closing a State? The Rules Are Tricky
KARE 11: State workers shudder at indefinite shutdown
KARE 11: Family finances get a new look after officials fail to fix the state's budget
Reuters: Minnesotans frustrated, angry over state government shutdown
Star Tribune: No holiday from the impasse
Star Tribune: 'Closed' doesn't deter park visitors
Pioneer Press: Who's to blame? Depends on who's doing the talking
Pioneer Press: For those cut off from aid, a plea: 'What about us?'

July 1:
Finance & Commerce: Shutdown not seen harming Minnesota’s reputation
KSTP-TV: What's Open or Closed During Government Shutdown
Minnesota Public Radio: Recap: A week of negotiation ends in stalemate
Minnesota Public Radio: Confusion over which services will be funded
New York Times: No End in Sight as Minnesotans Grapple With State Shutdown
Pioneer Press: What can you do during the shutdown?
Politico: Minnesota government shutdown puts Tim Pawlenty in spotlight
Star Tribune: Judge hears argument over zoo shutdown
Star Tribune: What's open, what's closed: your guide to the state shutdown
Washington Post: Minnesota government shutdown reflects widespread budget paralysis

June 30:
MinnPost: GOP leaders again seek special session, but Dayton says global deal needed first