STILL DANCING: Children at Verndale Christian Academy Child Care Center get their wiggles out during a video dance session. The center received an emergency relief grant to buffer decreased enrollment during the worst of the pandemic.
Granting With Gratitude
Nearly $26 million in grants help small businesses, nonprofits survive more than two years of uncertainty
Camp returned to full swing in Willow River this summer, where the nonprofit One Heartland has been hosting camp experiences for kids affected by housing instability, HIV/AIDS, and other challenges for almost three decades. With a nearly full roster of 550 campers signed up to swim, paddle and play this season, Executive Director Patrick Kindler said, “You’d think things are almost back to normal for us.” But a closer look at the losses One Heartland has faced since the start of the pandemic makes clear why Kindler continues to have some really hard conversations.
When the pandemic hit, One Heartland closed Camp Heartland for the summer of 2020—a move that resulted in the loss of more than $600,000 in enrollment revenue, and another $150,000 in facilities rental income. A Paycheck Protection Program loan from the Small Business Administration and an urgent virtual fundraising campaign helped One Heartland stay afloat with half its staff, all while shuttering an office and reorganizing for remote work. By 2021, the camp had reopened, but at just 65 percent capacity, and with facility rentals that had yet to rebound. Now, in the third summer of the pandemic, One Heartland’s costs are on the rise as the camp confronts supply-chain issues, unexpectedly inflated prices for gas and groceries, and the increased staffing it takes to account for surges and COVID-19 quarantine days.
“In all honesty, we just didn’t think it would go on this long,” Kindler said. “To get through the year, we’re pinching pennies and asking donors if they can increase their contributions. Every dollar is huge for us right now.”
Fortunately, some relief came to One Heartland and more than 780 other Central Minnesota businesses and nonprofits in 2021-2022 through the Minnesota Main Street COVID Relief Grant program, the latest round in a near-constant stream of COVID recovery dollars distributed by the Initiative Foundation over the last two and half years. Since the start of the pandemic, the Initiative Foundation has helped to disburse $25.9 million in lending accommodations and relief funding throughout Central Minnesota, contributing to the largest grant-making effort ever seen in the Initiative Foundation’s 36-year history.
“It’s not that the Initiative Foundation had never performed a function like this before, but we’ve never been called on to do grantmaking at this pace and scale,” said Matt Varilek, president of the Initiative Foundation, one of six regional entities created in response to the 1980s economic crisis in Greater Minnesota. As dozens of state, regional and local pandemic response and recovery programs rolled out to help businesses sidelined by the pandemic, many have relied on the Initiative Foundation’s deep connections with state and national funders to drive financial support to eligible businesses, especially in underserved communities and in critical service sectors like child care and early education. The effort included serving as the financial intermediary in Central Minnesota for two rounds of small business relief grants from the Minnesota Department of Employment and Economic Development (DEED) and a host of other smaller recovery programs.
“Getting those grant dollars out into the community really became our primary focus through most of the pandemic, and it was an all-hands effort by our entire staff,” said Varilek. “In a typical year, the Foundation might make about $1.5 million in grants to several hundred organizations, but during the first year of the pandemic, our small business grantmaking alone amounted to nearly $8 million to 766 enterprises. It was like fitting five years of work into 12 months, all while working remotely. And we’ve done that now for two years in a row.”
The scope and scale of the grantmaking was so monumental that staff affectionately referred to the effort as ‘Gi-Grant-A-Saurus,” said Lynn Bushinger, chief financial and operations officer at the Foundation. Many on staff during the early months of the pandemic worked overtime and canceled vacations to get relief to Central Minnesota business owners as fast as possible. “Getting money into the hands of bar and restaurant owners that had to suspend operations, or other businesses affected by executive orders, was just so important. People went above and beyond because we felt a sense of urgency. We knew people didn’t have the income and they needed these grants desperately.”
According to Brandon Toner, director of small business partnerships at DEED, the two COVID relief grant rounds helped to put more than $140 million into the hands of 12,000 business owners across the state, including more than 1,500 in Central Minnesota. “We asked these businesses to help us fight this virus, and they took it on the chin for the benefit of our public health,” he said. “In some ways this program is just a little bit of compensation for that brave and really disruptive thing they did. Some did it gladly, some not so gladly, but they did it.”
Restaurants, retailers, and others hard hit by executive orders were the primary beneficiaries of the first round of DEED funding. But as the economic after-shocks of the pandemic persisted through 2021, the state made an additional $8.8 million available in Central Minnesota through the Minnesota Main Street COVID Relief program, which the Initiative Foundation provided to 785 businesses and nonprofits.
“With this round of funding we could see that nonprofits that had relied on in-person fundraising events and galas were strongly hit, and that many saw an increase in demand for services without the same increase in donor support,” said Toner. “We also saw businesses that may not have been directly affected by the executive order apply for and receive grants” to help manage a host of pandemic-related challenges.
Receiving one of those grants was seen as vital for Karen Carlson, owner of Gentle Hands of Time Home Care, which provides elder care services in homes and senior housing near Cambridge. When the pandemic hit, clients living in larger facilities were cut off from care, while many others living independently were cautious about welcoming caregivers into their homes. “It took a big toll on billing hours, but we hoped that on the other side of COVID things would get better,” said Carlson, whose business has also been challenged by the workforce shortage. While she knew applying for a grant was no guarantee of getting one (in Central Minnesota, about 40 percent of 1,800 applications received funding), “I said to myself, ‘This is a God moment, and I have to at least try.’ It was about staying afloat, staying open to be perfectly honest with you.” Since receiving the grant, she’s used the money to increase pay for the 15 caregivers on her staff, and to attract new hires.
While demand for services is rebounding, Carlson said it’s still not business as usual. “We can’t cover all of the hours that our clients are asking for, and we have to be honest about that,” she said. “Years ago, if an employee was sick, I could guarantee a replacement, but I just can’t anymore. The biggest change in my business plan is that I can’t guarantee anything.”
Verndale Area Christian Academy Child Care Center received an emergency grant with funding support from the Minnesota Department of Education.
Open for Business
State grants haven’t been the only form of relief available to business owners impacted by the pandemic. Small business owners also benefited from grants like the Wells Fargo Open for Business program, which helped the Initiative Foundation deliver more than $500,000 in relief to companies like Dalal’s Delivery & Transportation Services, LLC, a one-man delivery service run by Mohamed Dalal, a graduate of Initiative Foundation’s Enterprise Academy. Though his business had been thriving, losing contracts during COVID-19 cut his cash flow so abruptly that he’d been forced to pay for his company’s auto insurance on a credit card. “For me, the $10,000 grant was enough to get back running again, and to start picking up new contracts,” Dalal said. “The price of gas is a new challenge, but right now, it’s just good to be working again.”
As Central Minnesota pulls out of the pandemic crisis, Toner said the next step will be “making sure that we do everything we can to get workers off the sidelines, and that includes everything from good transportation options to good child care.” Child care has long been a focus for the Initiative Foundation, which stepped up support for the region’s caregivers throughout the pandemic, providing general operating grants to places like the Verndale Area Christian Academy Child Care Center with funding from the Minnesota Department of Education and the Governor’s Emergency Education Relief (GEER) fund.
“Our center went from welcoming 50 students to just 15 in the very first week of the pandemic,” said Kenny Kjeldergaard, a children’s pastor at the Family Life Church of the Assemblies of God who took on a new role through the pandemic, helping partners at the Verndale Area Christian Academy Child Care Center stay open to families. “I have a background in finances, so my focus was on keeping the doors open by the skin of our teeth. If some of these grants hadn’t come through, we would have had to close the doors."
Now nearly two and a half years later, Kjeldergaard says the growing demand he’s seeing for child care in his community tells him the worst of the pandemic’s disruptions could be over. “We’ve regained all of the kids we used to have before the pandemic and then some,” he said, noting that the child care center now enrolls more than 100 children, with an average of 60 kids on-site every day. “We’re grateful to be where we are today. The growth happened so fast it kind of caught us by surprise. I think that’s a good sign of recovery.”
REBOUNDING: Kenny Kjeldergaard and Renee House of the Verndale Area
Christian Academy say child care enrollments have returned to pre-pandemic levels.
2020-2022 Small Business Relief Grant Distribution Map
Orange dots- 2020 Grants; Red dots- 2020-2021 Grants
—Jill Schaefbauer, Operation Foresight Services, Elk River
COVID-19 IMPACT UPDATE
TOTAL IMPACT: $25.9M - business, nonprofit relief investments
$27.1M BUSINESS RELIEF & LENDING SUPPORT
- $16.5 million in small business relief grants
- $4 million-plus in loans & accommodations
- $1.2 million to microenterprise ventures
$3.4M OTHER GRANTING INITIATIVES
- $1.6 million administered on behalf of Pine County
- $1 million in transformative funding to 15 nonprofits
- $710,000 in Innovation Fund and hosted Partner Fund relief grants
$853,000 CHILD CARE, WORKING FAMILIES SUPPORT
- $705,000 in early support for child care providers
- $148,000 for underserved workers
A special thanks to the Minnesota Department of Education and the Governor’s Emergency Education Relief (GEER) fund, the Minnesota Department of Employment and Economic Development (DEED), the Otto Bremer Trust and to the many anonymous donors and Minnesota-based foundations for aligning with the Initiative Foundation to drive crucial support into the region, including the Blandin and Bush foundations, the Wells Fargo Foundation and the Minnesota Council on Foundations and its Minnesota Disaster Recovery Fund on Coronavirus.
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