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Proposed legislation stuns Minnesota's nonprofits

Sen. Scott Newman
MinnPost/James Nord
Sen. Scott Newman

Every gathering of the Legislature has its share of goofy bills, but this one is a real head-scratcher.

State Sen. Scott Newman, a Republican from Hutchinson, has proposed legislation that would likely ban almost all state grants from going to nonprofit organizations. Officials from Minnesota's nonprofits are trying to figure out what he could be thinking. And so am I.

What gives? Newman isn't talking. (More on that later.)

But his idea has got others talking. One lawyer for nonprofits told me the bill, if enacted into law, would shut down hospitals all over the state.  

"It's so terribly broad. You can certainly read it [that it] would close down every non-profit hospital in the state,'' volunteers Tom Johnson, an attorney with Gray Plant Mooty who represents nonprofits.  


On the face of it, the proposed law, of which Newman is sole author and at last check had no companion bill in the House, would "make it difficult for nonprofits to have much of a field left in which to operate,'' says Johnson, former Hennepin County attorney.   

Just as puzzled, but perhaps more diplomatic, is Susie Brown, public policy director for the Minnesota Council of Nonprofits. "We're very interested in learning what the problem is he is trying to resolve with this piece of legislation,'' she admits. She, too, is reaching out to talk with Newman about his bill.

Banning state money from going to nonprofits would be a big deal. Keep in mind, as Brown explains, nonprofits are often the delivery mechanism in communities for carrying out budget and policy choices of the state. Plus, government grants are a really significant resource for many nonprofits, she said.

The 2,000 nonprofit members of the organization deliver a wide spectrum of services in areas such as health, housing, food, employment, legal and civil rights advocacy, education, volunteerism and other human services.

So what's the intent of this legislation? Maybe you can figure it out.

Here's Senate File 1096, called Grants to Nonprofits Prohibited in Certain Situations:

"No person, corporation or entity doing business as a nonprofit entity shall receive public funding to provide goods or services if the same or similar goods or services can be provided by a state agency or a private for-profit business entity."

What's Newman's side of the story? I can't seem to get a response from him — and that could stem in part from another snafu.

Remember the new state senator whose staff last January emailed the Minnesota Nurses Association to say that the senator had a policy of not meeting with groups that had supported his opponent? Well, Newman is that senator.

Newman initially stonewalled a media clamoring for explanations, later denied the existence of such a policy and then blamed the mistake on a staffer. The incident resulted in an ethics complaint against him, which was dismissed by a bipartisan Senate panel.

You have to wonder: Is this more stonewalling?

I started trying to contact him Thursday with phone calls and email messages.  

I asked for five minutes of his time. His staff said Thursday his day was heavily scheduled. They told me Friday he had headed home to meet with his constituents.

Does he have a cell phone, I asked.

He's been given the message you called, I was told, and was referred to the Republican media contact.

By Friday, Chris Van Guilder, the media's conduit to GOP senators, called back to say he had "not been able to contact or hear back from Senator Newman.''

"I'll let you know as soon as I know more,'' Van Guilder told me in a voice messge.

Haven't heard back.

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Comments (35)

Maybe this is his secret socialist plan to move to a single-payer health care plan. After all, aren't there many "non-profit" insurers taking substantial money from the state?

Here's my idea.

The Dems make sure every Minnesotan knows who authored the bill. Call it the Newman the Republican Law. Then make sure it's passed. And make sure it shuts down every hospital. Then make sure voters are reminded who's responsible.

When I imagine the Senate being convened, I constantly get the image of about 50 Seinfelds all simultaneously saying ....."Newman!!!!"

Isn't this the same guy who wouldn't meet with the nurses because they sort of kind of supported his opponent?

so, if a hospital that's a not-for-profit closes, what happens?

Those patients go elsewhere? all 5000 employees are unemployed? the helicopters around the state shut down? EMS for northern hennepin county stops and 9-1-1 medical calls go unasnwered? the out-sourced call center based in Hutchinson loses this client ?

This legislator sounds like a NUT.

Just a bit of speculation, here, but since the Republican Party has long believed that exorbitant levels of "Profit" (and high CEO/Magement/Boards of Director's Salaries) are the most important measure of economic "success," even if such profits and high compensation drives up the cost of basic services sufficient to price them out of the reach of average citizens,...

Their mantra would seem to be, "If nobody's getting rich ("building wealth") doing it, it SHOULD NOT be done or must be done in a different way..

Presumably having the government contract with local non profits doesn't allow sufficient opportunity for crony contracting of the type that allows certain favored (politically well-connected) individuals to get massively wealthy by gouging the public, while providing government-supported services, and, therefore, must not be allowed.

Of course ALL government services MUST be "privatized" as soon as possible, as well, for exactly the same reasons.

It does not seem to matter to these folks if the general public looses their food, shelter, clothing and health care as long as it results in a very few people "building wealth" as the result of the impoverishment of everyone else.

Hmm. Sounds like he's pushing the Libertarian ideal of everything being operated as a for-profit enterprise. Next thing you know, he'll propose tolls for pedestrians on sidewalks.

There goes my idea that the loonier representatives have been going to questionable schools and attending religious services at unusual spinoff churches. According to his Wikipedia page, he went to MSU-Mankato and the William Mitchell College of Law, and is a Lutheran.

(We still live under the First Amendment, but some of the places popping up in the histories of other representatives have been lacking in intellectual rigor.)

It's not clear if he himself had refused to meet with the Nurses Association representative, but an e-mail did come from his office to that effect. He blamed it on a new young staff member.

http://minnesota.publicradio.org/collections/special/columns/polinaut/ar...

Is this story a conflict in regard to Minnpost? You should at-least disclose that Minnpost is a non-profit that receives funding from other non-profits. Does Minnpost receive funding from other non-profits that would be impacted by the proposed legislation?

This is pure speculation, but I am going to take two guesses:

1) There is a group or a few groups that he knows will fold if he removes their funding, but he doesn't have the clout to take them on directly.

2) He saw a number like X State dollars go to nonprofits every year and thought to himself "Hmmm, I could really be a hero if I recouped that money."

Do these non-profit hospitals, that would be shut down for lack of a grant, really depend on getting a grant from MN taxpayers every year? Seems like something is out of kilter as far as MN budget. Maybe MN Legislature should take a good hard look at all money outlays for healthcare, get a total picture. Affordable healthcare for all isn't going to happen if there is backdoor spending left out of the bottomline. Grant money is a truly poor choice of funds for what might be considered a necessity.

Any alleged "non-profit" entity that relies on government funds to stay open should either become a government agency, operate in the private sector, or close down.

There are plenty of non-profits who generate enough revenue to deliver services using a fee structure, private grants or public donations.

If a non-profit can't survive without taxpayer funding, they are either inefficient, duplicating the efforts of other organizations, or are providing a service that no one wants or needs and as such should be targeted for defunding.

Many [maybe most] of Hennepin County's providers of child protection, parenting, adoption, and children's mental health services are non-profits: the Salvation Army, Catholic Charities which runs St. Joseph's home, PPL which provides shelters and longer-term safe housing, etc. etc. If all of these services were provided by for-profit agencies they would be so much more expensive that the county would, perforce, buy fewer of them, thereby leaving "the least among us" without services. Is that Sen. Newman's agenda?

Dennis (#10): "Any alleged "non-profit" entity that relies on government funds to stay open should either become a government agency, operate in the private sector, or close down."

Great, and while we're at it, let's apply the same rule to for-profit corporations as well. You know, the defense contractors, construction firms, and what-not, that rely completely on the public dole for their funding? How about the for-profits that "need" big property and income tax breaks just to keep their poor little heads above water?

Yeah, let's nationalize them or shut them down.

If you take even a closer look,this is an attack on the entire health-care system.Most insurance is provided by non profits.Nursing homes would be affected.Heck,even conservation groups would be affected.

So, if "nonprofits are often the delivery mechanism in communities for carrying out budget and policy choices of the state. " - and it seems like a true statement given that it's a category that includes hospitals - then it seems Mr. Tester is proposing one of two things: they should either "become a government agency", there by growing government (fine by me but I doubt by him), or they should become private, thus performing the same services but costing tax payers more money because they're then forced to pay for a profit margin. How, exactly, does any of this make sense?

He's just puffing up his chest in a rather pathetic manner. It couldn't possibly pass as written and he knows that. The real issue here is one of character. That he's actually unwilling to speak with people who disagree with him is the worst example of hyper-partisanship I've seen in a long time, and that is at the root of much of what's wrong with the state and the country. When a guy is unwilling to talk only with people who agree with him, he's taken himself out of the real game - the place where the real heat burns (coward)and the real work is accomplished (lazy ass). If this guy is what passes for what's good for our state, we're screwed.

I think the biggest point of the article is that he's not talking to the news to explain things. OR is he just avoiding this organization? I'm not implying anything other than to ask out loud.

Thanks.

Joseph (#7) may I direct you to the "About" link found in the top right corner of the front page. Putting aside the fact that the information you are looking for has been disclosed, why would there be a conflict? The story is about a bill and reactions by those affected by the bill. The only real opinion in the story by the author is frustration at the inability to contact the bill's author.

Duplication of effort is inefficient. If the taxpayers are already getting the service through a state agency, why should they pay a second time by providing a grant for the same service to a non-profit?
Also, grants from taxpayers create unfair competition for the for-profit entity that is providing the same service. The for-profit entity is forced to use its own resources to provide the service and at the same time, competes in the same market with the non-profit. Taxpayers shouldn't be making it more difficult for for-profit businesses to survive.

Dan - The conflict is that Minnpost has as self interest in protecting its donors. So when Minnpost's major donor list includes United Way and UCare and sponsor for the post was "made possible by the generous sponsorship support of The Minneapolis Foundation" the question needs to be asked this an objective report or is Minnpost just protecting its donors. How was this story derived, I doubt the the author was sitting around the senate chamber asking about proposed legislation that probably hasn't been through committee. What is the expected impact to the "generous sponsorship" if the proposal was enacted into law?

This is part of the Republican vendetta against all things not part of the corporate sector.

In Washington, those who seek to privatize the postal service (and leave rural customers to pay the fees charged by FedEx et al) are demanding that this agency, an essential component of good government and of the Common Good, show a profit.

The legislation they're pushing now would (ever so kindly) allow it remain a public institution IF it puts essential postal services out to bid by private companies. If a private company, no doubt paying nonunion workers the minimum wage, shows it can perform the service at less that the postal service now pays (because it pays its workers a living wage), the agency must award the contract to the private company.

It's all part of moving all wealth to the top and to hell with the rest of us. William McKinley seems to be the Right's hero and darned if it wouldn't be great to have him back again!

During the time former Senator Norm Coleman was mayor of St. Paul, our semi cul de sac street plowing was contracted to a private company (without resident input) So the city snow plow very carefully had to raise its blade as it went through our street to reach the connecting streets no private contractor wanted. Despite our complaints that the private contractor was late and did a very bad job, this shining example of "privatizing" government work in the name of cost and efficiency continued until Norm Coleman left office. Naive faith in all things private and for profit is a losing strategy for good service as well as for cost savings.

#18: I'm surprised it needs to be stated that nobody - us liberals included - is in favor of duplication and inefficiency. If any exists, we're all in favor of eliminating it. But this is no argument for unilaterally eliminating non-profit grant funding.

Mr. Newman will probably be a rising star in the Republican party (ala Tim Pawlenty)...heaven help us!

@#14 "Mr. Tester is proposing one of two things: they should either "become a government agency", there by growing government (fine by me but I doubt by him), or they should become private, thus performing the same services but costing tax payers more money because they're then forced to pay for a profit margin. How, exactly, does any of this make sense?"

It doesn't. The government should not be funding non-profits, so making them become for-profit in the private sector wouldn't cost the taxpayers anything, whether they made a profit or not. See, that's kind of the point.

And why would anyone actually want to grow government?

"Duplication of effort is inefficient." -Rosalind Kohls

This is a meaningless statement in all kinds of ways. In the first place, taking "efficiency" to it's ultimate extreme would have us gassing the elderly and disabled, since, after all, how are they contributing? I've never understood the slavish worship of efficiency to the exclusion of all other considerations, and never will.

"If the taxpayers are already getting the service through a state agency, why should they pay a second time by providing a grant for the same service to a non-profit?"

Substitute "for profit" for "non-profit." With me so far? Good. Yeah, I've never understood the rationale behind private prisons either.

Non-profits do what they do by leveraging public funding with private donations, many of which can only be obtained by matching funds. Good thing they do; a lot of people would be without a bed for the night, destitute, in ill health, and missing a lot of meals, without them.

Why doesn't the state agency take care of them?

Because people like you want to cut the human services budget by $1.6 billion (with a B) after already cutting it steadily for the last decade. At least a relatively small grant can be leveraged with donor money into enough to make a dent in needs of the neediest.

Public agencies and non-profits do this kind of thing well, because they don't turn anyone away. Your sainted private providers, on the other hand, have a proven track record of cutting loose those misfits who can't make money for them.

There is nothing written in the stars about how every single human endeavor has to make somebody a buck.

"Unfair competition" my rosy red a$$. This is about human beings, not profits. Deal with it.

Non-profits play a vital partnership/role in providing services that are not profitable in the private business economy and not favorable politically on all sides to be co-opted by the public sector. In the long run, a portion of state support to non-profits is a smart fiscal thing to do just as are small business loans. I suspect high rhetorical climate is responsible for this proposal. One hopes one thinks things through beforehand... What a dope. Maybe it can be nothing now but an embarrassment.

Nice to know Bachmann isn't alone when it comes to stupid in Minnesota.

Wow, Newman really knows how to promote his bill. Such ineptitude is really staggering. The poor man just can't separate his radical right wing ideology from the process of concieving well thought out and crafted legislation. Yikes.

What I find most interesting about this is that Mr. Newman has, once again, done something peculiarly hostile to the general public, and then made himself unavailable for any sort of explanation. First it was “I don’t talk to people who supported my opponent,” and now it’s “Nonprofit organizations are evil.”

Essentially, he’s engaging in his own form of childish bullying. One wonders what he does for a living when the legislature is not in session… If the voters in his district are not embarrassed by sending to the legislature someone with the maturity of a kindergartener, it’s a commentary as sad for them as it is for him.

But then, in my short time here, that sort of mean-spirited small-mindedness seems characteristic of far too many of the state’s Republicans.

It's not the role of government to be funding private entities, for-profit or non-profit.

The taxpayer's burden is heavy enough funding the bloated bureaucracy of official government agencies.

If your service is not wanted or needed by enough people to support itself via fees, donations or private grants, then it doesn't deserve to survive.

And to the genius who suggested that defense contractors should be defunded, who does he expect will provide the weapons for our constitutionally-mandated national defense? The government doesn't "make" anything. That government computer you're using to read this was built by a private, for-profit company.

Call me cynical, but I suspect what's going on here is that Newman is carrying water for some "entrepreneur" who has his eye on some state-or nonprofit-rendered service that he thinks will make him rich.

Years ago there was a (one term, I think) republican state senator by the name of Dick Pellow. Mr Pellow was a tow truck operator, and he is best known for trying (unsuccessfully) to pass a bill that would eliminate the Highway Helper trucks that dot our freeways during the rush hour. As far as I can recall, that was the only reason he ran.

Could be something similar happening here. Since Newman always disappears when he's done something he knows he shouldn't, we'll probably never get to ask him.

Mr. Tester, you can't have it both ways:

//"It's not the role of government to be funding private entities, for-profit or non-profit."

Followed shortly thereafter with this:

//"And to the genius who suggested that defense contractors should be defunded, who does he expect will provide the weapons for our constitutionally-mandated national defense?"

Defense contractors (and all of their subcontractors) are a key part of the economy. However, even when the Pentagon issues an order to a contractor (GE and Rolls-Royce, in this case) to stop work on a second engine for the new F35 that began in 1996, the two companies state they will continue to lobby to reinstate funding.

Fifteen years later, WE have paid roughly $3 billion to GE and Rolls-Royce towards an engine that was not wanted by the Defense Department but still has its congressional champions to press their case. Including the Speaker of the House.

Bringing this argument home, look at the Minnesota Senate bill introductions for today (4/14) and note S.F. 1180, authored by Senator Parry (R-Owatonna). His bill asks for a $1 million appropriation for the Waseca Arts Center.

If Senator Newman's goal is to rein in government spending, maybe he should start with his own caucus. And, since the Republicans have said they are relying on Deloitte-Touche for at least some of the fiscal analyses that used to be done by MMB, maybe we should ask how much Deloitte is being paid for that work? I'm guessing they aren't working for free.

I'd like to mention also that, because of the housing and general financial meltdown resulting from the lack of regulation and the greed of financial services firm executives, much foundation money has had to be diverted to meet basic food and housing needs of the newly unemployed and/or foreclosed upon Minnesotans.

Donations to most other nonprofits are down until the economy, the jobs market, and the housing industry recover.

I wonder if this might not be, at least in part, another attempt to de-fund public radio and public broadcasting? I might be wrong about this, and please (nicely) correct me if I am, but I think local public radio and television stations actually get more money from the state than they do from the feds -- the recent attempt to cut funding for NPR and PBS would have impacted the national organizations' ability to produce content for national distribution more than it would have hit the local stations. Legislation like this would cut local stations off at the knees...

If this legislation is as horrible as MinnPost wants it to be, then it will never be passed. Lots of bad legislation gets written up, not all of it goes anywhere.