Ask almost anyone and you’ll get no argument over what nonprofit organizations mean to Allen County.
Often, though, residents are thinking of the humanitarian efforts by the more than 3,000 groups. But a study by the Center on Philanthropy at Indiana University highlights an aspect some may overlook – economic impact.
Based on their budgets, nonprofits represent a multibillion powerhouse that employs at least one out of every 12 workers in the county. That’s more than 15,000 employees.
I do think that sometimes people may concentrate on the more warm-and-fuzzy aspects of nonprofits, said Marilynn Fauth, coordinator of the Paul Clarke Nonprofit Resource Center of Fort Wayne. There is the other side, which is economic impact, and that can’t be ignored.
And while their corporate counterparts look to trim expenses in tough times, nonprofit organizations tend to see their donations rise during economic downturns.
I think people see others going through a hard time, whether it’s a foreclosure or a job loss, and they want to help because they can identify with them. Many people have been down at some point in their lives. Some may have grown up living hand to mouth and want to do their part for others because they know what it’s like.
The numbers don’t lie.
Between 1995 and 2009 – the most recent period surveyed – payroll at nonprofits grew 32 percent to $483 million, the Center on Philanthropy report showed. When adjusted for inflation, average wages grew 16 percent to $32,600 annually. Private-sector wages during the same period declined 2 percent to $37,900.
Nationally, there are more than 1.5 million tax-exempt organizations. They represent 5.5 percent of the U.S. gross domestic product. In 2010, nonprofits accounted for 9.2 percent of all wages and salaries paid in the United States, according to the National Center for Charitable Statistics.
Nonprofit professionals typically have slightly lower salaries than those in the private sector, Fauth said. Still, she believes there’s a level of passion that prevents employee turnover at service organizations that might not be found at big corporations.
People don’t go to work for a nonprofit to make money, Fauth said. They go into it for the gratification of helping people.
Kirsten Gronjerg, a professor with the Center on Philanthropy at IU, was lead author on the nonprofit organizations research project, which released Allen County data in October. Gronjerg said nonprofits employ more than 10 percent of the labor force in the area – with 52 percent of employees working in health care.
In addition to contributing to the economy, nonprofits add to a community’s quality of life, officials say.
They provide social services and health care field services, so without question they’re valuable in that respect, Gronjerg said. They have also proven themselves to be more recession-proof than other industries, like manufacturing, construction, transportation or agriculture.
Health, education, social assistance, arts and entertainment are areas civic leaders feel are an indispensable part of a community’s fabric.
And they’re often run by nonprofits, Gronjerg said.
Todd Stephenson, president and CEO of the United Way of Allen County, said the group chooses to fund 34 social service agencies that deal with education, income, health and basic needs.
During the recession, Stephenson said the organization watched its budget drop to as low as $4.7 million in 2008, but it has since rebounded to $5.1 million last year. United Way has a 25-person staff, which has not been hit hard by layoffs.
We had a few reductions, but we called one or two back, he said.
As director of community service for Community Action of Northeast Indiana, Pam Brookshire said the service group’s economic contributions should not be taken for granted. The organization helped nearly 7,500 families last year. Many are below the poverty level.
When they get skills and training that enable them to move up the ladder, they get better jobs and have more money to spend in the community on housing, food, gasoline, clothing and things like that, Brookshire said. When you have a higher income you have more flexibility.
Another example of economic impact is CANI’s Head Start program, which spends more than $26,500 a year on school supplies.
It all adds up, Brookshire said.