Nonprofits stemmed COVID impacts, then the state snubbed them


Editor’s note: WyoFile — a nonprofit news organization — received a federally administered Paycheck Protection Program loan. The organization has not and will not apply for any of the state-administered relief programs covered here.

 

Before the pandemic, staff at the Council of Community Services in Gillette were looking forward to renovating the facility where they house the homeless, feed the hungry and help the needy get back on their feet.

The organization, which runs on a bare-bones budget, planned to make its shelter more suitable for housing families, move its food pantry into a bigger building and replace aging siding that was “just horrible,” director Mikel Scott said. “We were so excited to get that money,” she said, referring to a grant from the City of Gillette for the projects. 

Then COVID-19 crashed those long-awaited plans, and ramped up demand for the operation’s services.

While the state and federal government scrambled to provide increased unemployment insurance payments, paycheck protection loans and other forms of relief, services lagged behind skyrocketing need. Nonprofits like Scott’s put their fingers in the dam. 

“For a while there wasn’t anything to refer them to,” Scott said of people newly in need who were showing up at the council’s door. The organization spent the renovation money, and some of its operating budget, to help people keep up with rent and utilities.

“Otherwise people were going to end up homeless,” Scott said.

Now the state is catching up. The Wyoming Legislature convened for an emergency special session in mid May and set up programming to distribute $1.25 billion the state received in federal aid money. Because of such programming, Scott’s organization can now direct people facing eviction to a new fund to cover their rent or mortgage. 

But the small nonprofit itself is not yet eligible for state relief. It is excluded from applying for programs lawmakers established to funnel the federal aid money to small businesses.

Lawmakers allotted $325 million to such programs. In establishing the new programs, the Legislature rejected efforts by some senators to block Wyoming’s nonprofit businesses from the money. 

But after the elected representatives had gone home, a government agency made that exclusion anyway. When the Wyoming Business Council wrote rules regulating the distribution of the first $50 million in business relief, it blocked nonprofits from applying.

For nonprofit directors around the state who spoke to WyoFile, that has meant one fewer option as they confront surges in demand for services, plummets in revenues or both. Many smaller nonprofits have minimal cash reserves, those leaders said, and as revenues tank, the WBC decision leaves them in a precarious position. 

Officials have since indicated nonprofits will be included in the next round of grant making. On Friday, Gov. Mark Gordon’s economic advisor Rob Creager told a legislative committee some classes of charitable organizations will be eligible for future funding. The business council has yet to announce when those rounds will open up, and is only beginning to distribute the first round of funding. Nonprofit leaders say that just like the taxable businesses the state scrambled to aid, every week counts for some small organizations’ survival. 

The exclusion bewildered many legislators and has been difficult for Josh Dorrell, the new director of the Wyoming Business Council, to explain. 

“While it was not included in the legislation, the vote to exclude it was very close,” Dorrell said during a press conference with Gov. Mark Gordon on June 4. “It was within one vote,” he said.

Dorrell was referring to a 15-14 vote against an amendment to exclude nonprofits brought in the Senate. The House did not consider a similar amendment, and the bill became law with nonprofits implicitly included. During the session, leading lawmakers reassured concerned nonprofit advocates they would be eligible for relief programs.

“The Non Profits [sic] are included in the Legislation,” Senate Appropriations Committee Chairman Eli Bebout (R-Riverton) wrote during the session to Samin Dadelahi, Chief Operating Officer of the Wyoming Community Foundation, which funds many organizations. [WyoFile receives funding from the Wyoming Community Foundation.] Bebout voted for the failed amendment to exclude nonprofits.

Following the session, House Minerals, Business & Economic Development Committee Chairman Mike Greear (R-Worland) told WyoFile most nonprofits would be eligible for the aid. 

The business council, however, decided to exclude them while writing rules for the grant, officials there said. 

In the press conference, Dorrell argued his agency was following the Legislature’s intentions when it took the step to exclude nonprofits. Dorrell did not respond to several requests for further comment from WyoFile. 

The rules were approved by the Wyoming Attorney General, the Wyoming Business Council’s board and the governor’s office. Creager, Gordon’s advisor, indicated to lawmakers the governor’s office had supported the exclusion.

“Where we came down on it was it was unanimous within the body to help these small mom and pop shops,” he told the Joint Travel, Recreation, Wildlife & Cultural Resources Committee. “It was not unanimous to help nonprofits.” 

Dadelahi with the Wyoming Community Foundation found the reasoning suspect. “In my estimation they were trying to come up with reasons to make the pie larger for a group of people they really want to help,” she said. 

The business council sought to help “the businesses that support nonprofits first,” Dorrell told the Legislature’s Minerals, Business and Economic Development Committee on June 1.

Many nonprofit veterans called such thinking typical of the state’s treatment of nonprofits that provide social assistance in Wyoming communities, often filling in gaps in government services.

The decision was driven by “ignorance,” said Pete Gosar, an Albany County Commissioner and director of the Downtown Clinic in Laramie, a nonprofit that provides health services free or at low costs to those without employer-provided insurance. 

“Not viewing nonprofits as part of the collective business environment is a very big mistake,” Gosar said. 

“We offer healthcare to their employees and allow their business to continue,” Gosar said, while also lowering emergency room costs at Wyoming’s hospitals by providing preventative care. “It’s not well understood in Wyoming and never really has been,” he said.

Private donations, including small ones following the federal government’s distribution of stimulus checks, have helped, Gosar said, and his organization’s finances are “fine.” But he worries increasing demand for the clinic’s services will outpace its budget as people lose jobs and often the health insurance that comes with them. 

“You either reduce everybody’s care or you find another way to raise a few hundred thousand dollars,” he said, “and if the business council is not going to be engaged in that … well you get used to the door not being open to you and so you just continue.” 

At Laramie Interfaith, a food bank and service organization similar to the one in Gillette, employees have seen the need for their services rise, social worker Jake Weinzierl said. Though the organization has been able to tap into CARES Act money through organizations outside the state, “there hasn’t been a lot of new funding for us,” he said. 

People who once were underemployed, “now they have no income at all,” he said. Before they might have needed help with part of their rent; now they need the entire rent. But the organization hasn’t seen a funding surge to meet the need. “We’re helping people less while they’re asking for more money,” he said.

Weinzierl attributed a brief slowdown in demand in recent weeks to stimulus checks, but said that money is running out. In the last week, “we saw a huge spike” in need, he told WyoFile on Thursday. 

Meanwhile, nonprofit leaders argue there is little distinction between the pandemic’s impacts on their industry and for-profit businesses. 

The Council for Community Services, for example, closed a revenue-generating thrift store out of virus concerns, Scott said. They had to postpone their biggest fundraising event, an auction. 

Other nonprofits, off the front lines of a poverty response, have also suffered sharp revenue losses they aren’t certain how to replace. Dadelahi with the Wyoming Community Foundation worries about what Wyoming will lose if some nonprofits shutter their doors, she said.

“I agree [for-profit businesses] are really suffering, but nonprofit organizations are a business too, and it’s not easy to run a nonprofit,” Dadelahi said. 

“Just as many nonprofits fail as businesses fail,” Dadelahi said. Struggling nonprofits cause their own job losses, she said. 

Wyoming’s charities employ more than 14,000 people, according to the Wyoming Nonprofit Network website. Of the nonprofits in the state, 79% have annual budgets under $100,000. 

The Nicolaysen Art Museum, a longtime institution bringing art exhibits and art education to Casper, saw many revenue sources vanish with the pandemic, executive director Ann Ruble said. Weddings and events held at the museum, major income sources, were cancelled. Casper’s oil and gas industry, a long-standing supporter of the museum through corporate giving, is floundering and unable to make charitable donations like in the past, she said.

“I don’t know that the funding will ever come back,” she said. 

Ruble is worried about keeping up payroll for her museum staff as the federal Paycheck Protection loan they received runs out. 

“There’s not a lot I can predict these days but I can predict a surge in unemployment that comes from the [nonprofit] sector,” she said, “because we will be out of Paycheck Protection Program money and a lot of people will have burned through cash reserves.”

Many nonprofits were already running on shoestring budgets, she said. “We need that kind of relief,” she said of the state program. “I’m appalled.” 

Casper would be diminished if the Nicolaysen doesn’t survive the pandemic, Ruble said. “We are the cultural anchor of the community,” she said. 

Legislative opposition to helping nonprofits at times centered around the political work some engage in. 

Following the session, Greear told WyoFile he anticipated the business council would write rules to exclude lobbying organizations. “I don’t think they’re going to get anything and I don’t think they should get anything,” Greear said of lobbying or political advocacy nonprofits. 

During Gordon’s June 4 press conference, Dorrell echoed those concerns, calling the nonprofit sector “a little bit interesting.” 

“Many of them … are lobbying groups,” Dorrell said. Business council officials wanted to better understand the “nuances” of the sector, he said. 

Nonprofit advocates argued that blocking those organizations but not all charities would have been easy to do for the first round of funding.  

“There’s a way to put the language together that is pretty much standard for the 30 years I’ve worked in nonprofits,” Ruble said. “It’s a pretty typical list. It’s almost like a cut and paste.” 

The business council is now making that distinction. As it opens up more funding, 501(c)3s and 501(c)19s that will be able to apply, Creager said. The (c)19s designation is for veterans groups. 

Business demand on the first round of funding has indeed been intense, Creager said. The state has received applications for nearly $60 million in relief. The statute allowed the governor’s office to shift more money into the first round of giving. 

“We are still encouraging folks to apply,” Creager said.

WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.

Advertisement