I WANT THEM TO HAVE IMPACT.

♪♪ >> ERIC: WE'VE BEEN TAKING A LOOK AT HOW MANY OF THE TRUMP ADMINISTRATION ACTIONS IN THE LAST MONTH MAY IMPACT PEOPLE AND ORGANIZATIONS HERE IN MINNESOTA.

THE UNCERTAINTY OVER FEDERAL FUNDING AND INCREASED SCRUTINY IN THE WAKE OF FEEDING OUR FUTURE TRIALS HAS LED TO A BUSY 2025 FOR THE MINNESOTA COUNCIL OF NONPROFITS.

NONOKO SATO HEADS UP THE COUNCIL.

WELCOME BACK.

>> THANK YOU.

>> Eric: HOW MUCH OF A PR HIT HAS FEEDING OUR FUTURE HIT?

I WOULD GUESS PEOPLE ARE LOOKING AT THAT, WONDERING IF THEIR MONEY IS GOING TO THE RIGHT PLACES.

>> ABSOLUTELY.

YOU KNOW, UNFORTUNATELY, IT'S ONLY A FEW DIFFERENT ORGANIZATIONS ARE BEING IMPACTED, RIGHT?

AND I WOULD ALSO LIKE TO ARGUE THE FACT THAT IT'S AN INDIVIDUAL THAT IS COMMITTING CRIMES VERSUS THE ENTIRE NONPROFIT SECTOR THAT'S BEING VILIFIED RIGHT NOW.

AND, SO, YOU KNOW, ONE OF THE BIG THINGS THAT WE ARE KIND OF KEEPING AN EYE ON AT THE STATE LEVEL IS TO MAKE SURE THAT THERE AREN'T FURTHER REGULATIONS AGAINST THE NONPROFIT SECTOR.

WE'RE HIGHLY REGULATED ALREADY.

WE'RE VERY MUCH COMMITTED TO BEING TRANSPARENT AND ACCOUNTABLE AS A SECTOR.

I MEAN, WE ACTUALLY REALLY RELY ON THE PUBLIC TRUST IN ORDER FOR US TO BE ABLE TO DO OUR WORK.

AND, SO, YES, LIKE IT IS ACTUALLY IMPACTING ALL OF US, BUT WE DO ENCOURAGE LEGISLATORS WHO ARE THINKING THROUGH WAYS OF, YOU KNOW, REGULATING NONPROFITS MORE TO WORK, ACTUALLY, WITH THE NONPROFIT SECTOR, NCLUDING THE MINNESOTA COUNCIL OF NONPROFITS.

WE'RE HERE TO BE ABLE TO SUPPORT THEM.

>> Cathy: LET'S TALK ABOUT WHAT'S HAPPENING ON THE FEDERAL LEVEL.

>> SURE.

>> Cathy: A LOT OF NONPROFITS IN MINNESOTA RECEIVE FEDERAL GRANTS.

AND FEDERAL GRANTS ARE PAID AFTER THE WORK IS DONE, RIGHT?

SO SINCE THEY'RE FROZEN, A LOT OF THESE NONPROFITS WOULD NOT GET PAID.

>> YEAH.

>> Cathy: DO THEY HAVE TO ABSORB, THEN, THE COSTS OF THIS?

>> POTENTIALLY, YEAH.

I MEAN, THERE ARE THREE DIFFERENT WAYS THAT NONPROFITS RECEIVE FUNDING FROM THE FEDERAL GOVERNMENT.

ONE IS DIRECTLY THROUGH A GRANT.

ONE IS THROUGH SERVICES LIKE MEDICAID AND MEDICARE THAT IS PROVIDING A FEE FOR SERVICES THAT NONPROFITS ARE ALREADY PROVIDING.

AND THEN ALSO GRANTS THAT ARE GOING DIRECTLY THROUGH THE STATE AS WELL, AND THEN BEING ALLOCATED INTO THE NONPROFIT SECTOR.

AND, YES, MAJORITY OF THESE FUNDING MODELS ARE REIMBURSEMENT, WHICH MEANS THAT NONPROFITS HAVE ALREADY SPENT THE MONEY.

NOT ONLY THAT, THERE'S ALSO, LIKE, CONTRACTS THAT ARE BEING -- THAT ARE ALREADY SIGNED, LET'S SAY, FOR 2025.

AND, SO, EVEN THOUGH THEY HAVE BEEN GRANTED THE OPPORTUNITY TO PROVIDE SERVICES AND WAS TOLD, LIKE, YES, WE WILL GIVE YOU FUNDING, NOT ONLY ARE SOME NONPROFITS NOT RECEIVING FUNDING OF THE ONEY THAT'S ALREADY SPENT, BUT NOW THEY'RE NOT EVEN SURE WHETHER THEY SHOULD GO FORWARD WITH THE 2025 WORK.

>> Cathy: WELL, THEN HOW DO YOU -- HOW DOES, SAY, A EXECUTIVE DIRECTOR OR A BOARD PLAN THE WORK AHEAD OR TRY TO -- HOW DO YOU DEAL WITH THE UNCERTAINTY?

WHAT ARE YOU TELLING YOUR MEME G YOUR PEOPLE?

>> YEAH, I MEAN, I THINK THE SIMPLE THING PEOPLE KEEP ON SAYING, YOU NEED TO DIVERSIFY FUNDING.

THAT'S NOT REALLY THAT EASY.

THE FEDERAL FUNDING THAT COMES THROUGH IS PROPORTIONALLY SO MUCH BIGGER THAN, LET'S SAY, INDIVIDUALS AND WHAT FOUNDATIONS MIGHT BE ABLE TO PROVIDE.

AND, SO, YEAH, I MEAN, RIGHT NOW NONPROFITS HO DO NOT KNOW OR HAVE THEIR FUNDING CUT OFF ARE HAVING TO AY OFF STAFF, MAKING SOME REALLY DIFFICULT DECISIONS AROUND THEIR BUSINESSES IN ORDER FOR THEM TO EVEN JUST MAINTAIN SOME OF THE PROGRAMMING THAT REALLY NEEDS TO EXIST.

>> Eric: I THINK THERE ARE 40,000 NONPROFITS IN MINNESOTA.

30,000, I THINK, THAT ACCEPT DONATIONS.

>> YEAH, IT'S ACTUALLY 9,000 ORGANIZATIONS THAT ARE FINANCIALLY ACTIVE IN MINNESOTA.

>> Eric: OKAY.

>> YEAH.

>> Eric: WELL, WOULD IT BE A GOOD -- SIGN OF GOOD FAITH TO MAYBE LOOK AT SOME CONSOLIDATION, MAKE THINGS MORE EFFICIENT, MAYBE FEWER ADMINISTRATORS, IF THERE'S 100 HOUSING NONPROFITS, MAYBE CUT IT DOWN?

>> CERTAINLY.

I THINK THERE ARE -- >> Eric: IS ANY OF THAT BEING LOOKED AT?

>> YEAH, I THINK THAT'S ALWAYS A CONSTANT CONVERSATION ABOUT, LIKE, WELL, THERE'S TOO MANY NONPROFITS.

THE THING IS, WE EXIST, DONORS GIVE US MONEY BECAUSE THERE'S A COMMUNITY NEED.

AND, SO, JUST BECAUSE ONE ORGANIZATION IS WORKING WITH, LET'S SAY, YOU KNOW, YOUTH, THE OTHER ORGANIZATION THAT'S WORKING WITH YOUTH, THEY MIGHT HAVE COMPLETELY DIFFERENT TYPES OF SERVICES AVAILABLE, SO THAT MERGER AND COLLABORATION MAY NOT NECESSARILY BE THE RIGHT FIT.

IT DOESN'T MEAN THAT THEY SHOULDN'T BE EXPLORING IT AND CERTAINLY A LOT OF NONPROFITS ARE.

I WILL ALSO SAY THAT IN MINNESOTA, IN RURAL COMMUNITIES, THERE AREN'T A LOT OF NONPROFITS OUT THAT ARE CONDENSED TOGETHER.

SO EVEN IF ONE ORGANIZATION IN ONE RURAL COMMUNITY MERGES WITH ANOTHER OR, WORST-CASE SCENARIO,S CLOSES, THE COMMUNITY IS HAVING A REALLY REALLY HARD TIME IDENTIFYING ANOTHER ORGANIZATION THAT MIGHT BE ABLE TO PROVIDE A SIMILAR SERVICE.

SO IT'S -- YOU KNOW, IT'S NOT -- IT'S CHALLENGING, I THINK, FOR MANY BOARD MEMBERS TO HAVE TO NAVIGATE THOSE KIND OF OPTIONS.

>> Cathy: FINAL QUESTION, I MEAN, YOU'VE HAD WEBINARS, I KNOW YOU'VE BEEN MEETING WITH YOUR MEMBERS.

SO WHAT ARE YOU TELLING THEM AT THIS POINT?

>> YEAH, I THINK THE BIG THING IS THAT WE DON'T WANT TO STOKE ANY MORE EAR THAN THERE IS.

I THINK THAT THERE'S A LOT OF UNCERTAINTY AND CONCERN AROUND WHAT'S NEXT, AND THERE'S A LOT OF THINGS THAT WE JUST DON'T KNOW.

AND, SO, FOR US, I THINK THE BIG THING IS, LINING, MAKING SURE THAT -- LIKE, MAKING SURE THAT ORGANIZATIONS ARE LEGALLY COMPLIANT, LOOKING AT BOTH THE FEDERAL AND STATE LEVELS, PUTTING TOGETHERRING A SCENARIO PLANNING, BUDGETS, LOOKING AT CASH FLOWS.

THESE ARE ALL THINGS A NONPROFIT SHOULD BE DOING ANYWAY.

AND NOT TO BOAST ABOUT THE WORK OF THE STATE ASSOCIATIONS, BUT THIS IS EXACTLY THE TYPE OF WORKING THAT WE TRY TO DO, IS PROVIDE CAPACITY-BUILDING SUPPORT SO THAT NONPROFITS CAN GO THROUGH AND WEATHER THESE KIND OF UNCERTAINTIES.

>> Eric: APPRECIATE YOU COMING OVER.

KEEP US POSTED, WILL YOU?