Almost lost in recent reports ranking the area’s major
employers is a story that begs attention.
The list of the top ten employers in the area shows an impressive total
of 23, 336 employees.[1] But it is a tale of two economies.
- Seven
of the top ten employers are nonprofit organizations, together comprising three-quarters of the total
employment for the top ten.[2]
- The top two employers, both nonprofits, constitute nearly one-half of the total employment of the ten.[3]
Add to these major employers the churches, colleges, human
services agencies, foundations, military and fraternal organizations, trade
associations, and dozens of other nonprofit organizations and we come to the
inescapable realization that nonprofit organizations are a major contributor to
the economy of the Greater Lynchburg Area. These patterns are not unique to
Lynchburg. They are so typical of most
cities in America.
So What?
The growth of nonprofits is often met with dismissal or even
disdain as if these organizations do not “produce” anything and escape taxation. While these organizations do not return
profits to investors, they do, indeed, contribute to the economy. In fact, private nonprofits number more than
1.8 million in the United States, not including government entities and certain
religious organizations, and account for about 9% of the GDP. Most are small, but the sector also includes
some giants; AARP, National Geographic Society, American Red Cross, World
Wildlife Fund, Goodwill, National Public Radio, Habitat for Humanity, and some
very-well-endowed foundations.
Again, So What?
Two points are clear.
One, this segment contributes to the local economy in several
significant ways.
- Employment;
17,236 in just the top ten employers in the Greater Lynchburg Region.
- Consumer
spending; by these employees and the multiplier effect on the local market.
- Payroll,
property, and other taxes; not all nonprofits are tax-exempt
- Purchases
of goods and services. Nonprofits
use energy, supplies, professional services, and all the goods and
services of a for-profit business.
- And, unlike large companies owned by out-of-town investors, the income and any surpluses remain in the local community.
The second point is, we are all “investors” in this sector, including
volunteer service on boards and in the work of the organizations and we should
expect a good return. Nonprofit
management has changed markedly in recent years as a result of litigation and
scandals and simply because the generations who are assuming leadership will
not accept “the way it has always been.”
To borrow a popular phrase, “It’s not your father’s nonprofit.” Volunteers and community leaders have choices
in how they spend their time and talents and they’re not willing to squander
either. Continuing to act as we always
have is not enough to sustain a vital segment of the economy.
Getting Ahead of the
Competition
That’s right, nonprofits compete. And if organizations are to attract the best
volunteer leadership, they must be ahead of the competition. Who is the
competition? Other nonprofits. Active citizens may be involved with many
organizations Perhaps a church, school,
the Y’s, scouting and youth organizations, sporting and recreation
organizations, foundations, service clubs, alumni and professional associations,
and others, all vying for time and attention—not to mention financial
support. And often one questions if his
or her time and expertise are being well spent?
Just as businesses need to stay ahead of the productivity
curve, so, too, do nonprofits. But
running a successful business is not the same as running a successful nonprofit.
Nonprofits are unique and they require unique leadership skills. Leaders need the understanding and tools that
can be applied to advancing the nonprofit’s mission.
Two
Questions
We need to ask ourselves two questions. Are we investing in the “other economy” with
the same vigor we commit to building our business sector? Are we getting the best return on our
investment in our local nonprofits? What
we answer and what we do with the answers, is vital to a robust local economy.
No comments:
Post a Comment