Big value in nonprofits
Nonprofits are the Rodney Dangerfields of the economy. They’re celebrated for providing important services or promoting worthwhile causes, but get no respect for their sizable economic contribution to the community.
It’s easy to discount their impact. While most people would agree that nonprofits provide value via their social impact on the community — feeding the hungry or fighting for clean air, for example — few would regard them collectively as a significant economic driver.
But they are. The Community Impact Council, which represents 60 Mesa County nonprofits, conducted an economic impact study based on surveys completed by 31 small to medium-sized 501(c)(3) members.
The study found those 31 nonprofits provide a gross economic contribution of $133.8 million to Mesa County’s gross regional product of $5.4 billion.
This contribution creates 2,161 full- and part-time jobs with a total labor income of $77 million. CIC members bring $67 million from outside the county. Once adjusted for leakages, supply chain effects and multiplier effects, the total economic impact — or the direction infusion of outside dollars into the local economy — is $33.4 million.
“We’re not just standing there with our hands out all the time — we’re actually contributing to the economy,” Doug Sorter told the Sentinels editorial board Monday. Sorter, who holds a leadership position with CIC, is the vice president of business operations and development at Strive.
The study didn’t include Colorado Mesa University or St. Mary Hospital, although it did include their foundations. CIC leaders feared that doing so would have strained the credulity of the numbers. There are far more nonprofits in the county — 223 — than CIC’s membership reflects, however. Several nonprofits, including the United Way of Mesa County, didn’t have the staff capacity to respond to the survey.
The picture, however incomplete, tells a story: Nonprofits are an overlooked sector contributing to the vitality of the local economy. The CIC, which is a melding of the former Human Services Council and the Community Impact Network, undertook the study after an anecdotal collection of data suggested nonprofits played a much bigger role in economic activity than anyone imagined. Dr. Nathan Perry, an economist at CMU, performed the study and validated the CIC’s original conclusion.
Unfortunately, the study can’t pinpoint whether the economic churn from nonprofits is greater in Mesa County compared to similar-sized communities. It would be interesting to learn whether a tax-averse community is more reliant on nonprofits for services that cash-strapped local governments can’t provide.
We should be thankful, first and foremost, for the presence of nonprofits because they fill gaps that for-profit businesses and government can’t or won’t. But we should remember that the fattest line on most nonprofits’ budgets is payroll and benefits, which ripple across the local economy.
Nonprofits give back in more ways than we’ve understood.