More than 130,000 Minnesota nonprofit employees — a third of all nonprofit workers in the state — have filed for unemployment since the COVID-19 pandemic broke out this spring.
State data show that the nonprofit sector has been disproportionately hit by the economic crisis during the pandemic, with shuttered events and programs wiping out revenue.
Minnesota’s overall unemployment rate fell to 8.6% in June, according to figures released Thursday by the state, down from a record high of 9.9% in May and reflecting the easing of COVID restrictions. But the state’s jobless rate remains nearly triple what it was before the pandemic.
Minnesota’s 390,000 nonprofit workers make up 14% of the state’s workforce. But the 63,000 nonprofit workers who had their hours or jobs cut in April represented 19% of the state’s initial unemployment claims.
Another 24,000 nonprofit workers lost their jobs or had their hours cut in May, representing nearly 18% of state claims. By June, nonprofit workers accounted for nearly 14% of Minnesotans who filed for unemployment.
“It’s the biggest reduction of force since the beginning of nonprofits,” said Jon Pratt, executive director of the Minnesota Council of Nonprofits. “So many nonprofits do their work in person or at large events. ... For many organizations, what they do is impossible” with COVID restrictions.
Allison Swanson was laid off Wednesday from her job of five years with the Minnesota Historical Society, staffing the front desk and leading tours at the James J. Hill House in St. Paul. The 32-year-old from South St. Paul is looking for a job as a tutor or secretary since museum gigs are scarce, if not nonexistent.
“Nobody knows what’s going to happen next,” she said. “We all have to think of our futures in different ways.”
Nonprofits lost an estimated $1 billion in revenue in April alone, according to a study by the Minnesota Council of Nonprofits. Nearly half said then that they had no more than three months’ worth of cash on hand.
Emergency coronavirus stimulus aid has helped. Nearly 80% of nonprofits surveyed by the council received Paycheck Protection Program (PPP) loans, making up about 5% of Minnesota’s total PPP recipients.
“It was a temporary shot in the arm,” Pratt said.
Nonprofits with more than 500 employees didn’t qualify for the loans. They’re backing legislation in Congress introduced by U.S. Sen. Amy Klobuchar to give grants to nonprofits of any size.
The number of nonprofit workers who have filed for unemployment, nearly 15,000 in June, includes universities and health care companies such as HealthPartners. The data might include duplicates if people filed for unemployment more than once, as well as employees who had hours reduced but are now back to work full time.
In a survey in May, 60% of 260 nonprofits surveyed said they had reduced programming and 45% had cut budgets. But only 18% said they had eliminated staff positions, according to the state Nonprofits Council.
Swanson has been without a paycheck since she was furloughed May 1. The Minnesota Historical Society in March closed the Hill House and its other 25 museums and sites, from Fort Snelling to the Split Rock Lighthouse, and only two have reopened.
Swanson hopes to land a job at a nonprofit post-pandemic but right now sees only empty job boards for museum spots.
“Where is our field? There is no field,” she said. “I don’t know where I’m going to go next. I don’t know who can afford to hire us.”
On Thursday, the Historical Society announced 40 additional layoffs, totaling 216 employees who have been cut in the past month — more than a third of its entire staff. Unlike most nonprofits, the Historical Society is supported by taxpayers, with state funding making up 61% of its $65 million budget. But CEO Kent Whitworth said the cuts were needed to cover lost revenue of about $3 million during the pandemic.
“We’re heartbroken at the loss of so many colleagues,” he said, adding that the organization will likely be reshaped by the crisis. “All these cultural organizations will look different [post-pandemic].”
About 19% of the nonprofit’s revenue comes from admission fees, program fees and other services that have been sidelined. Whitworth said the group will look for other ways to make money, and he hopes revenue rebounds when sites are able to reopen safely.
Heather Darby of Blaine, one of those just laid off by the Historical Society, isn’t counting on the nonprofit sector for her next job. The 51-year-old single mother of two teens is frantically sending résumés to nonprofits, government and for-profit businesses in hopes of landing a job quickly.
After a heart attack in March and with her two kids, she said finding a job is “more urgent. It’s a tough time to navigate through all of that.”
Minnesota’s nonprofit sector has steadily grown over the years, reaching 391,000 workers in 2019. Nonprofit employees made up 14% of the workforce, surpassing the government sector for the first time in the number of employees and share of the workforce.
After the Great Recession in 2008, the number of nonprofit jobs grew nationally and in Minnesota. But unlike then, many of the state’s more than 9,000 nonprofits now are facing an almost instant collapse in revenue.
The Minneapolis Institute of Art lost 39 staffers to voluntary buyouts and layoffs last month. The YMCA of the Greater Twin Cities furloughed 90% of its 6,700 part- and full-time staff. In St. Paul, the Science Museum of Minnesota has furloughed 450 of its more than 500 employees since April.
Science Museum CEO Alison Brown said she’ll make permanent staffing decisions next week as the organization faces a projected $20 million revenue loss in its next fiscal year after losing $10 million. She expects to dip into the museum’s $40 million endowment to help cover deficits.
While a $4.6 million PPP loan helped the Science Museum cover staffing costs, about a third of its revenue comes from visitors. The museum will be at 25% capacity when it reopens Sept. 4, and Brown said it may not break even, especially with increased expenses for touchless ticketing and increased sanitizing.
“We are in a tough time,” she said. “There’s just no doubt about it.”