As nonprofits that provide critical services to the Twin Cities LGBTQ community drop like flies in this recession, it’s an open question who’s next. Over the last eight months, two organizations and one mental health program in the Twin Cities have closed their doors as funds from private donors and granting agencies dried up, part of a nation-wide collapse in donations to LGBTQ nonprofits and a shift in donations to activist groups and pro-LGBTQ lobby groups.

“It’s a perfect trifecta of problems,” says Greg Varnum, Executive Director of the National Youth Advocacy Coalition. According to Varnum, some donors have eased up on their giving because of the Obama administration’s LGBTQ-friendly image while the fight against California’s Proposition 8 has drawn away money from large private donors – a pool still feeling the whiplash from last fall’s stock market crash, along with many LGBT-oriented foundations.

Citing a private report prepared by the Movement Advancement Project,* Varnum said that around 60% of LGBT organizations missed budget projections for the second half of 2008. “The reason is very unique to the community is that even the major organizations don’t have big cash reserves. 60% have zero to three months of cash reserves, and about the same have no line of credit.”

Many of these organizations have been unable to ride out the recession because they have no way of compensating for a dramatic drop in donations and grants.

Private funders “are all broke”

“All of the private funders we used to get money from are all broke,” Larui Wollner, the former Executive Director of Access Works!, a now-defunct needle exchange program told Andy Birkey last month “We are definitely not a touchy-feely kind of social service as far as the public goes.”

That problem also felled a mental health services program aimed at LGBT youth at Face 2 Face, an organization that serves homeless and under-served youth. Janet Bystrom was in charge of the program at Face 2 Face.

When Face 2 Face’s donations took a hit during the recent economic crisis, Bystrom said, the organization was forced to cut significant amounts of staff time, which all but killed her LGBT mental health program.

“Most places do not provide mental health services for queer youth,” Bystrom said, calling ordinary youth mental health services insufficient, because LGBTQ youth frequently don’t see such places as friendly environments. “The only way you can get those kids to come is to do outreach and say ‘hey, you are welcome here.’”

With $35,000 in community donations and $40,000 of “in-kind” donations of office equipment and volunteer time, all garnered by a herculean community effort, Bystrom has managed to resurrect most of her former program as RECLAIM, an independent organization serving around 40 LGBTQ youth. The money is “something to walk out on,” said Bystrom.

Eventually, she hopes RECLAIM can find funding in an equal mix of payments from health insurance providers, grants, and private donations.

District 202, the well-known Minneapolis-based youth center, closed the doors to its offices and drop-in center at the beginning of the summer. In an interview earlier this summer, 202’s Board Chair, Curt Prins, stressed that the organization is not going away, and that the closing of the center – District 202’s primary public face – represented nothing more than a strategic re-alignment of the organization. He said, though, that it became nearly impossible to continue funding the center on within their current budget.

What next?

NYAC’s Varnum said that there’s no silver bullet, and Bystrom and Varnum both say they see donors shifting their dollars to political acitivism, and away from direct-service providers like RECLAIM, Access Works, or District 202.

In an uncertain economic climate, with one organization down, and two only tentatively alive, it’s still an open question whether or not more groups will fail in the coming year.

*The MAP is a self-described “a think tank that produces and disseminates research aimed at increasing the productivity of investments in the Lesbian, Gay, Bisexual and Transgender (LGBT) movement,”