Minnesota’s Freeze Hinders AIDS Group

Last month’s announcement by Minnesota’s Department of Finance that it was freezing

new grants to nonprofit organizations came as the Minnesota AIDS Project was already facing a falloff in support from corporations and individual donors.

“We’ve been caught in somewhat of a squeeze play, first from the private side and now on the public side,” says Lorraine Teel, executive director of the charity, which works to prevent people from getting infected with HIV and to help those who have AIDS. “The state financial picture is really unclear.”

About 60 percent of the group’s $4-million budget comes from government contracts, funneled through state and county agencies. It’s not clear, Ms. Teel says, how much of that money will survive Minnesota’s budget cuts, which are expected to range from 5 to 10 percent for each state agency.

Finance Commissioner Pamela Wheelock announced last month that, because of an anticipated budget shortfall, she was barring state agencies from signing new contracts with nonprofit organizations until agency heads had a chance to determine their priorities.

Minnesota AIDS Project services will continue uninterrupted, thanks in large part to the charity’s $100,000 reserve fund, which is enough to cover two months’ worth of expenses.

“Our board has wisely adopted the goal of having three months of operating capital in our reserve,” Ms. Teel notes. “But we’re not there yet, so dipping in would really put a hardship on the organization.”

Uncertainty about what state grants will materialize — and when — is hampering the organization’s planning process. “The larger question is what do we do with the new services we had planned for, where potentially there is no funding available,” she says. “We don’t operate on a day-to-day basis. We make long-range plans, with programs and events scheduled months in advance.”

Workshops for a program involving AIDS education in businesses must be arranged well ahead of time, for example, although the state contract to finance it is now in doubt. “We’re dealing with businesses for whom HIV is not their top priority, so we need to give them as much lead time as we can to get them to buy in to providing this service for their employees,” Ms. Teel says.

Private grant makers are not likely to be able to take up the slack, Ms. Teel predicts. Foundations are continuing to make payments on previous grants, but she worries that they may have less to give away next year. The slowing economy has also taken its toll on the group’s corporate supporters, whose giving is expected to remain flat at best. “A good-news letter is one that comes in at the same level as last year,” she observes.

The organization retooled its holiday mailings to its major and its regular donors this year to reflect the uncertainty of the times. Those results will not be apparent until next month.

Yet despite the gloomy financial outlook, Ms. Teel says, Americans seem not to be abandoning the cause of AIDS prevention, education, and services. Since September 11, her group has seen a big jump in the number of people asking to volunteer. And donors to her charity can earmark 5 percent of their gifts this holiday season for the Gay Men’s Health Crisis, in New York City, which saw donations plummet amid the outpouring of support for victims of the terrorist attacks.

Those attacks were perhaps less of a call to action for AIDS activists than they were for many other groups, Ms. Teel says. “Living with uncertainty, dealing with overwhelming tragic loss, premature death, and suffering — this is familiar ground to us.”