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Some nonprofits feel the recession's sting

Jessica Johnson, 16, right, Shannon Haglund, 18, center, and Samuel Johnson, 14, work Wednesday with a group of Kerkhoven youth packing backpacks of food for the Grow Mobile program at the Willmar Area Food Shelf. The food shelf was one of a handful of nonprofits in the area to report an increase in donations in the past year. Tribune photo by Ron Adams

The food shelf Brenda Voigt manages in Litchfield faces a dilemma. A bad economy has spurred more people to seek the food shelf's free food to ease their grocery bills, but has also created a situation in which fewer people are willing or able to donate.

"More people are coming to us, but we don't have as much to give," she said, summing up the problem.

Nonprofits throughout the state face a similar bind; while layoffs and underemployment have led to a greater demand for their services, their funding has dried up from sources facing cutbacks of their own.

A report released Tuesday from the Minnesota Council of Nonprofits said that in May, 56 percent of nonprofit organizations in the state reported an increase in demand for their services, while 57 percent reported a loss of revenue.

That revenue loss cuts across all sectors from which nonprofits are traditionally funded -- from government budgets to private foundations to individual contributors, the report said.

Christine Durand, communications director of the Minnesota Council of Nonprofits, put it this way: when it comes to nonprofits in times of economic hardship, the laws of supply and demand are turned on their head.

"In business, when supply goes down, it typically means there is less demand. Not so with nonprofits," she said.

Heartland Community Action Agency of Willmar has noticed this problem for some time now. A classic case occurred recently, when a $20,000 grant for a program designed to prevent people from being evicted from their apartments was gone within just two weeks.

Heartland community relations director Debi Brandt said that is a reflection of a recurring problem in the organization.

"With us, the need is always greater than the funding we receive," she said.

One thing, though, has changed since the start of the recession, said Brandt. For the first time, layoffs in the area have led to people once solidly in the middle class to come to the organization for assistance, leading to a greater strain on its already stretched resources.

"It's a very humbling experience for them," she said. "They're not typical clients."

Exacerbating the problem further still is the fact that those who were already seeking assistance are in even worse financial shape now -- facing more competition for a diminishing pool of jobs.

"They were already struggling before," said Heartland housing and planning director Lori Raiber. But now, she said, they need these services more than ever.

Even tiny nonprofits, like the one man operation E-quip Africa in Willmar, are facing less money and donated goods to work with.

Founder Doug Wilkowske said the organization, which donates used computers from homeowners and businesses to schools in Africa, has seen around 60 percent fewer donations this year. He wasn't sure, though, whether it was because people were keeping their things out of necessity, or because they had already given before.

"I don't know if I've bled the local businesses dry or if they're just keeping what they have," he said.

Not all organizations are feeling the effects of the recession equally, however. Christie Kurth of the Willmar Area Food Shelf reported a 23 percent increase in donations over last year. She said drives for donations throughout the year had been a huge success. "For us, we've been blessed," she said.

For its part, Heartland Community Action has benefited from its reliance on federal funding, said Raiber. The organization has seen the direct effects of the federal stimulus package, with a grant for a home weatherization program that will weatherize a projected 500 area homes in the next 18 months as well as funding for two new employees.

One of those employees will manage community outreach, according to Brandt. That job will become increasingly important if even more meager times lie ahead, she said, as community members will need to help one another with their own specialized skills.

"Maybe there's an accountant who will agree to do free taxes once a month," she speculated. "With this position, we could do more to get in contact with people like that."