Senator Scott Newman
District 18 Serving McLeod, Meeker & Wright Counties
Office: 301 Capitol, Saint Paul, Minnesota 55155

April 26, 2011

Response to Leader Article and Editorial on Non Profits Bill April 2011

Recently, I introduced a bill, SF 1096, which questions whether nonprofit corporations should receive public funding if state agencies or private business provide the same or similar goods and services. In response, the Hutchinson Leader published two separate pieces which alluded to an allegation that I was putting nonprofits “on the defensive,” “Picking on nonprofits” and stated, “nonprofits under attack.”

For a little background information on why I introduced this, admittedly controversial legislation, I offer the following:

  1. In 2007, the Office of the Legislative Auditor issued an evaluation report titled “State Grants to Nonprofit Organizations” which in part disclosed the following:
  2. There are over 31,000 nonprofit organizations in MN
  3. Approximately $1Billion in state grants was awarded to almost 1,900 nonprofits in 2005
  4. State payments to nonprofit organizations for all purposes, including grants and contracts totaled $4.7 billion in 2005
  5. Problems of inappropriate spending of state funds by some grantees and cited inadequate oversight by several state agencies
  6. Nonprofits that received state funds had a median of 16 employees in 2005 compared with 3 for nonprofit organizations that did not receive state funds
  7. Recommended the creation of an executive branch officeto oversee nonprofit grants,
  8. As a result of the 2007 study, the Office of Grants Management was formed to “standardize, streamline and improve state grant making practices and to increase public information about state grant opportunities”
  9. The MN Council of Nonprofits (MCN), the lobbyist group for nonprofits, currently has 2,000 members listed on its website (
  10. The 2010 “Minnesota nonprofit Salary and Benefits Survey” complied by the MCNfound:
  1. The organizations employed 22,394 fulltime and 15,474 part time employees
  2. The median salary and benefits for a MN nonprofit is:
  3. Executive Director; $84,510
  4. Finance Director; $73,382
  5. Public Policy Director; $63,336
  6. Grant Writer; $48,006
  1. According to an economist from the U of M who recently emailed me, the IRS database listed 35,000 charitable nonprofits in Minnesota.
  2. In 2010, the Office of Grants Management acknowledged that MN can improve cross-sector cooperation, stating “given the struggle for state agencies to align and coordinate efforts amongst themselves, it is understandable that it is even more challenging to effectively collaborate across the public, private and not-for-profit sectors. Many state programs are so burdened with their own programmatic requirements that staff do not always have the time to stay informed of other community efforts that are related to their work.” You can view the complete report here.

After reviewing the above information, I contacted the Office of Grants Management requesting up-to-date information about the number of grants made by the state to nonprofits annually. OGM responded: “You inquired about the number of grants issued each year by the state. It would be necessary to contact individual agencies to determine the number of grants issued during FY 10 as this information is not picked up by the reports.”

Candidly, the information I have been given is out of date, incomplete or simply not responsive, even though the state now has an office created specifically to keep track of grants to nonprofits. In making this request, I was simply asking for an account of public money given to nonprofits, whether there was duplication or unnecessary funding, what is the money being spent on and what are the administrative/employment costs?

In these difficult budgetary times, I have been constantly contacted by innumerable nonprofits pleading that their funds not be cut or to protect them by raising taxes. With over $30 Billion in all funds being spent by the State of MN annually, I think I am asking fair questions. Many nonprofits do great work on behalf of our citizens and I believe they will be continued to be funded. But if there is waste,duplication of efforts or a better way to help those in need, we must look at reform as part of the solution to Minnesota’s addiction to spending.I believe asking difficult questions about the programs our government funds is an important part of my responsibility and when it is necessary to introduce a controversial bill in order to get answers to inquiries that I feel are legitimate and in the best interests of those individuals that I represent, I will do so.

Respectfully,

Scott

301 State Capitol Ph: 651-296-4131

75 Dr. Martin Luther King Jr. Blvd. Email:

St. Paul, MN 55155