Nonprofits feel the pinch of tough economyby Ambar Espinoza, Minnesota Public Radio
Many small nonprofit organizations are feeling the pinch of a sluggish economy and budget cuts at both the state and federal levels. Some Minnesota nonprofits have scaled back their top staff to save money.
St. Paul, Minn. — Most people who have to hold down two jobs will probably tell you they're tired, and they wish they didn't need a second job, but not Denise Harris.
Harris is the executive director of the North Minneapolis Meals on Wheels. This year her program had to absorb some steep budget cuts.
She went from being a full-time employee with health benefits to going part-time with no benefits. Now, she's taken on a second job, doing graveyard shifts in a group home.
"That particular job has provided me not only with benefits, but it's allowed me to have that human contact with individuals who really need the support," Harris said. "And I'm really gratified that I have this opportunity to work with those folks. It's just enriched my life."
Harris admits it's difficult to juggle two jobs, especially at the age of 53. But she says her faith has given her the physical and mental strength to do both.
Her part-time status is one of a number of ways her program is trying to stay afloat. And she's not the only one.
Carolyn Tonneson is the head of Metro Meals on Wheels. The nonprofit membership organization provides services to 37 Meals on Wheels programs across the Twin Cities.
Tonneson said as many as 30 executive directors of Meals on Wheels program are part time. Tonneson, who runs a metrowide organization, also works part time with no health benefits.
"That's the way a lot of nonprofits try to keep financially stable is by cutting those corners, and it isn't necessarily easy on staff," Tonneson said. "We're talking smaller nonprofits that tend to struggle more like that -- but yeah, it's a reality."
That's exactly what Jon Pratt with the Minnesota Council of Nonprofits said is the most practical way to balance a budget. He said some nonprofits that can dip into financial reserves are still looking into personnel cuts.
"I just talked to an organization yesterday where they've just reallocated a quarter of a million dollars to spend in the reserves until May. And then by May, the board expects the executive director to have a layoff plan to help them balance their budget," Pratt said.
The current economic slump is stressing nonprofits even further. The rising cost of fuel and food is having an impact. Denise Harris said her program has had to cut what it pays and reimburses drivers.
"And then our caterers at St. Olaf's Residence, which is one of our partners that supplies our meal, they are seeing the cost of food go up dramatically as most folks are seeing these last couple of months," Harris said. "That is affecting the cost of operations for our partner, which in turn eventually will impact North Minneapolis Meals on Wheels."
Nonprofit leaders say another effect of the tough economy is the increasing demand for their services at a time when their budgets are tight.
Both Harris and Tonneson said all of the Meals on Wheels programs are looking at how to raise more money and decrease their expenses.
One option is cost-effective insurance policies. This month, several Meals on Wheels program joined an umbrella policy for directors and officers insurance. That's going to save the North Minneapolis chapter more than $600 in insurance costs each year.
In the meantime, Harris said her program is doing the best it can to wisely spend the donations that continue to trickle in, ever since news coverage of the program's financial troubles. Since last Thanksgiving, her program has received $16,000 in donations.
- All Things Considered, 04/17/2008, 5:24 p.m.