By Rick Garcia
Years ago while working as a nonprofit executive in Chicago, one of my Board members who was the CEO of a global pharmaceutical corporation said that anyone who can passionately work at a nonprofit in a demanding environment delivering quality service while making a nickel dance before spending – can manage my business anytime.
Although many businesses, small or large, also experience growing pains and sacrifices, this is nothing new to a nonprofit. Do more for less. Sound familiar?
During the last several years Michigan’s struggling economy has forced nonprofits to look differently at how they conduct business. Needs are increasing rapidly and resources are not keeping pace. Contributors and supporters who also have tightened their belts, faced budget cuts and experience low diminishing return on investments. Over 70% of nonprofits surveyed by Michigan Nonprofit Association (MNA) have seen an increase in demand and over 90% indicated that the economy was one key reason. Yet, nonprofits continue their mission while making due at the resources given to them.
Over half of Michigan nonprofits reported that their financial and in-kind giving was down. Many nonprofits are watching their contributors and supporters become clients.
On the flip side, nonprofits in Michigan have been the upper hand in economic activity. According to a joint-commissioned report by MNA, the Council of Michigan Foundations and Public Sector Consultants, Michigan’s nonprofit sector generates $108 billion annually in economic activity, in terms of wages, assets, expenditures direct and indirect valuation of revenue that “touches” the organization.
Michigan’s nonprofits can be found in every subsector of the service economy, including a strong presence in health care, human services, education, and the arts.
Highlights of the report include:
– Michigan nonprofits employ 10 percent of the workforce, paying $4 billion each quarter in wages.
– Approximately 31,979 Public charities and foundations, or 501(c)(3) nonprofits registered in Michigan in 2011 – An increase of 64 percent in the last 10 years.
– The largest nonprofit groups represented are education at 51 percent followed by human service at 36 percent and health at 14 percent.
– Nonprofits have direct expenditures of more than $60 billion and $48 billion indirect and induced economic effects with a total of $108 billion in economic activity.
Nonprofit organizations are often referred to as a “social safety net,” providing vital economic support to the State and local economy working on all levels of need and issues. According to the IRS, Michigan had over 44,000 nonprofit organizations in 2010 – a 14 percent increase in total organizations since 2001.
The challenge before the nonprofit community is to determine how a sea of potential human capital and renewed local, state and national interest can be tapped to provide support to the work of nonprofits in our respective communities. The best innovative practices come from this sector because many do collaborate with each other for a common cause or goal. Collectively, a partnership becomes a viable and credible group that appeal to many funders and donors.
Perhaps other business sectors can take a page of the nonprofit’s playbook and learn not only how to sustain and grow, but become an asset to their respective communities.
Rick Garcia, a nonprofit executive, a civil rights advocate, blogger and a contributing writer for The New Citizens Press can be reached at rrgarcianrg@gmail.com
This was printed in the May 5, 2012 – May 18, 2012 Edition
