Nonprofits have big role in economy

One in 17 employees in Virginia worked for a nonprofit organization in 2005.

Collectively, the paid work force of about 211,000 nonprofit employees earned more than $8.2 billion in wages.

And that covers only paid employees. The equivalent of 139,000 additional full-time employees volunteered their services to help nonprofit soup kitchens, theaters, civic groups, hospitals and colleges.

These data and more are included in a report released today that looks at the economic impact of nonprofit organizations.

"The sector is an important economic force," said Darcy Oman, president and CEO of The Community Foundation Serving Richmond and Central Virginia.

Supporters of the $50,000 study hope the 64-page report will bolster an industry that often operates on the fringes. It also might give nonprofits more of a voice and influence when it comes to policy decisions. "We need to take more of a role in community decision making, " said Nancy Stutts, director of Connect Network.

The Community Foundation and Connect Network, nonprofits that work with a lot of other nonprofits, were two of the primary funders of the study, which provides a breakdown on the types of 501(c)3 organizations and their funding, revenue and assets based on 2005 numbers, the latest available.

Stutts said the report will serve as a benchmark and a way for the nonprofit sector to measure its growth or decline. It will also educate people about the sector and its varied missions: work force development, education, feeding the poor, caring for the elderly, maintaining museums, etc.

Nonprofit employment has grown at a faster rate than the for-profit sector, said Dr. Lester Salamon, the report's author and director of the Center for Civil Society Studies at Johns Hopkins University in Baltimore.

Between 1995 and 2005 in Virginia, nonprofit employment has increased by 34.7 percent, while the for-profit work force has grown by 19.5 percent.

Employment is key because wages have a ripple effect on the community.

"That's the important number in terms of their impact," said Sandra J. Peart, an economist and dean of the University of Richmond's Jepson School of Leadership Studies who examined the study.

This is the first time an economic impact study on nonprofits has been undertaken in Virginia, Stutts said.

One reason is that tracking nonprofits, their wages, employees and revenue is not easy. There is no one form that supplies all the info. The study's authors used state and federal data, but each come with limitations.

"Nobody knows truly, fully, accurately what the accurate number is," Salamon said. "I would say these numbers are the minimum. If there is a distortion, we have been conservative."

Some databases are out of date and include defunct organizations. Religious groups do not have to file with the Internal Revenue Service, nor do nonprofits that spend less than $25,000 per year. State numbers do not include entities with fewer than four employees. Depending on the source, there are between 4,382 and 10,414 nonprofits in Virginia.

For those reasons and more, the report comes with caveats.

Per capita nonprofit spending can be skewed when narrowed down to localities.

In Charlottesville, per capita nonprofit spending is listed at $18,000. Only four other localities are higher, with Norton in southwest Virginia coming in first at $43,596.

But money spent by a nonprofit is credited to the locality in which an organization is headquarted and not to the place where the money is received. Charlottesville is home to several nonprofits related to the University of Virginia, which is based there, even though money is disbursed outside the community.

The report says nonprofit wages are slightly higher than those of their for-profit counterparts in similar fields, but the data proving that are limited.

In 2005, nonprofit hospital workers made an average of $746 per week while their for-profit counterparts made $696, according to the report. But the wage information is culled from a report that counts part-time employees as full-time, said Kirsten Gr?nbjerg, a professor who holds a chair at the Center on Philanthropy at the University of Indiana.

That means the salary of a person working five hours per week has the same weight as someone working 40 hours.

Revenue is hard to differentiate. The IRS 990 form that 501(c)3 organizations file combines government grants and charitable gifts into one category. The same goes for government contracts or voucher payments, such as Medicare and Medicaid, and fees earned from sales of services.

That means charity revenue can be overstated while government contributions are understated, according to the report. Contact Emily C. Dooley at (804) 649-6016 or edooley@timesdispatch.com.

Key findings

A new study out today examines the economic impact of the nonprofit sector in Virginia:

Employees: 211,000 paid workers; 139,000 full-time equivalent volunteers

Assets: $66.7 billion

Revenue: $30.7 billion

Expenditures: $27.4 billion

Wages paid: $8.2 billion

Nonprofit numbers

In 2005, there were 10,414 nonprofits in Virginia, according to IRS data. The breakdown by industry, number of organizations, revenue and employment:

Hospitals: 104 entities; $8.91 billion in revenue; 74,042 employees

Religious, grantmaking and civic associations: 4,906; $8.77 billion; 20,074

Colleges and universities: 69; $2.59 billion; 14,958

Social assistance: 1,503; $1.91 billion; 17,554

Professional and scientific services: 340; $1.42 billion; 14,345

Arts, entertainment and recreation: 1,647; $1.22 billion; 7,343

Nursing and residential care: 241; $1.15 billion; 22,325

Elementary and secondary schools: 222; $1.08 billion; 12,477

Ambulatory health care services: 453; $1.83 billion; 11,779

Other: 929; $1.79 billion; 16,078

Central Virginia

Nonprofit organizations: 2,022

Employees: 31,731

Largest nonprofit by revenue: Bon Secours St. Mary's Hospital of Richmond; $366,349, 216