Audio Economic upturn could mean better times ahead for Minnesota charities (story audio) Photos Barreiro: Not sure outlook is improving yet Bill King Human assembly line Resources Feed My Starving Children Minnesota Council on Foundations 2004 Outlook Report Greater Twin Cities United Way Your Voice Join the conversation with other MPR listeners in the News Forum.

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Economic upturn could mean better times ahead for Minnesota charities
by Jeff Horwich, Minnesota Public Radio
December 23, 2003

At Brooklyn Park-based Feed My Starving Children, teams of five put soy, rice, vegetables, and chicken into individual ready-to-eat meals for malnourished children. Officials say good prospects for donations should allow them to expand soon. (MPR Photo/Jeff Horwich)

When the economy turns sour, charities often suffer twice. Demand for their services increases at the same time as the money coming in slows down. Government and corporate grants, investments, and donations all dry up at the same time. 2003 was another lean year for many charities and foundations, but there are signs 2004 will bring economic recovery and a return to better times.

St. Paul, Minn. — In a warehouse below a Brooklyn Park overpass, a dozen Medtronic employees take time off work and put on hairnets to help the world. They're a human assembly line, dumping soy, rice and dehydrated chicken into meal packets for places like Liberia and Haiti.

The group that runs the warehouse, Feed My Starving Children, never hurts for volunteers. They've had 17,000 this year from companies, churches and schools. But when the budget for food runs out, the line shuts down.

Officials say the sour economy has kept them from growing as much as they hoped. But executive director Diane Eaton says things are looking up.

"We actually are working on a major expansion right now to build a facility down in the south metro area," Eaton says. "We just secured a grant from Thrivent for $15,000. We're working on a couple of other large grants to help fund that start-up effort."

Charitable foundations like Thrivent Financial may be turning a corner. The rebounding stock market will help foundation endowments recover some of their recent losses. Corporate foundations will grow with corporate profits.

	Bill King

The Minnesota Council on Foundations just completed its Grantmaking Outlook for 2004. Council President Bill King says foundation giving may wind up down again for 2003, but that could be the end of the trend.

"After two years of doing outlook reports where we were seeing a consistent drop in assets of foundations, we're starting to see assets pick up a little more in 2003," King says. "We're seeing about 70 percent of the grantmakers that we polled have indicated that they expect their grant dollars to increase in 2004."

The increase will probably be modest; only a quarter of foundations said times were so good they planned to increase their giving by more than five percent. Almost half of foundations surveyed say they still plan to adjust their giving priorities to cope with the sluggish economy.

As important as they are, King says these large institutional grants make up only 20 percent of the charitable money distributed in Minnesota. The rest comes from donations by individuals.

There's no easy way to measure whether Minnesotans are opening their wallets wider now that the picture for jobs and wages is a little brighter. At the Greater Twin Cities United Way, donations will just match last year. Vice President Terri Barreiro says that was accomplished only with extraordinary effort.

"The economy is beginning to turn around, so people are hoping that it might flatten out, but at this point it's just a little bit too early to tell what it looks like," Barreiro says.

	Barreiro: Not sure outlook is improving yet

Even if we have an upturn, Barreiro says charities are climbing out of a pretty deep hole. She says between 2001 and 2004, the services provided by the 200 groups she works with will shrink 25 percent.

"Donations are down, government dollars are down -- and they provided a lot of support for social services. And individuals aren't able to even pay the fees that help contribute to support" organizations, Barreiro says. "The YMCA, for example, told me the demand for scholarships for summer camp and scholarships for families for memberships went up so sharply that it actually shut down their decision-making system."

While money for charities got tight, demand kept growing. Last month, the United Way's emergency help line had its highest volume ever. One day brought more than 1,800 calls from Twin Citians looking for food shelves, shelter or winter clothing.

Barreiro does have one positive piece of information. On a relative scale, we're doing great. An index compiled by the national United Way recently ranked Minnesota the "most caring state" for the fifth year in a row.

But even in the most caring state, an economic turnaround is welcome news.

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