Nonprofits nonpareil

Westchester County Business Journal, Dec 31, 2007 by Golden, John

A Pace University study done in partnership with The Business Council of Westchester shows that nonprofits in Westchester County have grown significantly in number and in employment in recent years and continue to contribute strongly to the economy.

The number of registered nonprofit organizations in the county rose to 4,179 this year, a 23 percent increase from 2000. That was slightly less than the statewide growth rate for the nonprofit sector, which has increased 26 percent since 2001.

Westchester nonprofits employed an estimated 40,560 persons in 2006, a 15 percent increase from 2000. However, employment at nonprofits accounted for the same share of the total work force in the county, 8 percent, in 2006 as in 2000. The recent study of the economic impact of nonprofits was conducted by the university's Wilson Center fir Social Entrepreneurship at the request of the Not-for-Profit Council of The Business Council of Westchester and looked at more than 2,000 nonprofit groups here. Pace professors in 2004 conducted the first such study in the county. The studies were led by Wilson Center advisor Brian J. Nickerson, associate professor of political science and public administraton and director of the Edwin C. Michaelian Institute for Public Policy and Management at Pace. Farrokh Hermozi, professor of public administration, collected and analyzed data "The earlier study showed that the not-forprofits in Westcheser to be an integral part of the local economy, and we wanted to determine their continued impact," said We Swierat executive director of Westchester ARC and chairman of the not-tor-profit council. The updated study shows "the strength and viability of nonprofits in our community. We continue to participate in the economic growth of Westchester," he said.

There were 3,176 registered public charities in the county this year, a 25 percent increase since 2001. Public charities as of 2005 had an estimated $2.4 billion of total liabilities, a $0.1 billion increase since 2000, and expenses estimated in 2005 at over $3.7 billion, up $0.25 billion since 2000.

Those public charities this year reported assets of $5.7 billion, a 16 percent increase from 2001, and revenues totaling $4.5 billion this year, a 15 percent increase from six years ago. Registered private foundations in the county numbered 994 this year, a 16 percent increase from 2001. They reported $2.4 billion in assets this year, up 12 percent from 2001, and $1.4 billion in revenues, an 87 percent increase since 2001.

That great leap in revenues likely was due to an outpouring of donations in the wake of the Sept. 11, 2001, terrorist attacks and the Hurricane Katrina disaster in 2005 and by the growth in assets and income among wealthy individuals and families supporting foundations the study noted.

Though no expense figures for private foundations were included in the report, those nonprofits typically have low total expenses and have shown "modest" spending increases since 2000. the study noted.

As of the first quarter of 2007, nonprofits in the county reported total revenue of more than $5.9 billion and total assets estimated at $8.1 billion. Across all employment sectors in the county estimated mean annual income fell from $43,915 in 2000 to $42,912 in 2005. Salaries of nonprofit employees typically lagged behind those in government and in private industry.

"I think it shows that not-for-profits show very stable financials," Pace University's Nickerson said of the new study. "It dispels the myth that not-for-profits spend more than they make, or are just there as resource expenditures, sucking up money. I think it shows that there are inputs and outputs there" and that nonprofits contribute to the economy as a whole.

We view the not-for-profit community as an integral part of our business community," said Marsha Gordon, president and CEO of The Business Council of Westchester, which has more than 100 not-for-profit members. The study "proves that not-for-profits are contributing billions of dollars in revenue to the economy." Nickerson said the substantial increase in numbers of nonprofits both statewide and locally in recent years is due to a combination of factors. For one, "Governments have gotten out of the business of social and human seniors," he said. "The process of contracting out is a much more significant factor than it was 10 or 15 years ago."

Individual and family wealth generated by the real estate boom of a few years ago also has fed the growth in private foundations, Nickerson said.

"There's a market reality to not-for-profits. There's a demand for their services. That also fuels growth," he said.

Brian Nickerson said the Wilson Center might use the aggregate data from the study to look more precisely at expenses, wages, operating margins and funding for nonprofits. And with the great diversity of nonprofit organizations in the county, from medical centers to offices stalled by a few persons, more research is needed to break out and categorize those groups for closer study, he said.