MCN’s reaction to proposal to prevent fraud and improve oversight

It is gratifying and hopefully a sign of good things to come to see our sector’s advocacy seeds taking root. The Minnesota Council of Nonprofits (MCN) has been working for years to raise awareness around the challenges of the current state grantmaking system and propose solutions.

In a press release earlier today, Governor Tim Walz outlined a plan to “prevent fraud and improve oversight of federal grant dollars.”

Fraud and abuse connected to the nonprofit sector harms us all, and we support initiatives that work to close any opportunities for fraud.

In addition, pieces of the plan align well with recommendations MCN has created through two recent reports that we are using to set the stage for work to improve state grantmaking, reduce barriers and administrative inefficiencies, and expand access to state dollars for nonprofits.

Just last month, MCN released State Grants to Minnesota Nonprofits, which outlines the decentralized nature of the system and analyzes the barriers currently challenging the grantmaking process. One of the recommendations in that report is for increased capacity at granting state agencies, especially to support nonprofit applicants and grantees.

That report also recommended expanding and strengthening statewide grants management: “Minnesota state agencies play a central managing role in the grantmaking system. Through standardized and improved practices, these agencies could increase accountability and reduce friction and wasted effort in the system. Because nonprofit organizations deliver a large portion of state-funded services, the agencies that contract with them should regard these entities as partners and essential customers and include them in the designing and planning of the grant process. … Many of these recommendations could also be proposed and implemented by enhancing the Department of Administration’s role.”

In 2021, MCN facilitated Equity in State Grantmaking, a report that explored the history of state funding in Minnesota and ways the state could adapt to increase racial equity in the state grantmaking process. A statewide grants management system, created with input from nonprofit applicants and grantees, is one way to reduce the barriers for small and culturally-specific nonprofits to apply for and receive state funds.

As the state continues to explore new and/or changed state regulations, MCN will continue to assert the need for input from nonprofits, as well as shine a light on the impacts these regulations may have for nonprofits as they advance their missions for stronger, healthier, and more vibrant communities across Minnesota.

We remain committed to creating opportunities for nonprofits from every corner of the state to bring their voices to the table as this plan unfolds.

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Related readings on government oversight of nonprofits and state grantmaking: