Not-for-Profit, For-the-Economy

The Stats

According to Alaska Nonprofit Sector: Generating Economic Impact, the fourth iteration of the report and published in January 2018, 44,100 people were directly employed by nonprofit organizations in 2015—and counting indirect and induced jobs, that number jumps to more than 67,000. “If nonprofits were treated as their own industry, they would be the second largest source of non-government employment behind oil and gas in Alaska,” according to the report. Nonprofits provide almost twice as many jobs as the next largest sector (tourism) and employ nearly two-thirds as many people as the largest sector (oil and gas). The report continues to say 17 percent of all employment in Alaska is in the nonprofit sector, including up to 40 percent of all employment in some rural areas.

In 2015 the sector paid a total of $3.89 billion in total wages: $2.68 billion through direct jobs and $605 million for induced jobs and $605 million in indirect jobs. As a group, nonprofits generated $6.98 billion in revenue in 2016. In fact, from 2013 to 2016 (generally bad years for Alaska), this sector actually saw revenues go up, rising 6 percent in those three years. According to the report, “At the same time [period], state economic output as measured by gross domestic product fell by about 15 percent, from $58.9 billion to $50.7 billion. This illustrates how nonprofits are a stabilizing factor in the economy.”

Of the nearly 6,000 nonprofits in Alaska, 77 percent are classified as 501(c)(3)s, which includes charitable, religious, scientific, educational, or other public purpose organizations; 7 percent are 501(c)(4)s, including social welfare organizations like civic leagues, rotary clubs, and employee associations; 5 percent are 501(c)(6)s, which are business leagues, such as chambers of commerce; and 10 percent are other classes of nonprofits, like credit unions or utilities.

According to Wolf of The Foraker Group, there are twenty-nine different kinds of nonprofit classifications in total, and the organizations within those classifications include everything from industry associations (RDC is a 501(c)(6)), trade unions, and hospitals (SEARHC is a 501(c)(3)) to volunteer emergency services (the Homer Volunteer Fire Department is a 501(c)(3)), vocational programs, and cemeteries—in addition to the many charitable organizations (Rasmuson Foundation is a 501(c)(3)) that many associate with nonprofits. The range of organizations, and variety of their missions, is part of what Wolf enjoys about her job. “With almost 6,000 nonprofits out there, no day is ever the same, and I love that part.”

For more than three years she has been the CEO of The Foraker Group, a 501(c)(3) organization whose mission is to strengthen other nonprofits from the inside out. The Foraker Group accomplishes this through various means, including leadership development, organizational development, educational courses on a variety of management and leadership skills that are essential to nonprofit management such as fundraising and finance, and shared services where The Foraker Group provides consolidated back-of-house services. “We are the accounting department for about ninety different nonprofits and tribes across the state,” Wolf says.

“We also take on big public policy issues that impact the nonprofit sector,” she explains. “The happiest thing we probably ever did was collaborate to create Pick.Click.Give. Now the Alaska Community Foundation runs the program, and we just do the supporting mechanism to that work by teaching classes that help nonprofits make the most of that program.”

The report quotes 501(c)(3) Ester Volunteer Fire Department Chief Tori Clyde, who says, “For every $1 received in borough and other government funds, the department leverages $2 in volunteer hours.”

Catholic Social Services, a 501(c)(3), leverages volunteerism in another way—Adult Community Transition is a post-secondary program affiliated with the Anchorage School District through which young men and women who are differently abled volunteer at St. Francis House. In volunteering they learn and practice important workplace skills like accountability, hygiene standards, and work ethics.

Catholic Social Services also funds a transportation program that provides taxi rides to those in need to appointments, referral visits, and the emergency room. Lisa Aquino, executive director of Catholic Social Services, explains that in the program’s first year it provided 1,342 taxi rides, which cost the nonprofit $24,795. “But the savings from these rides is approximately $280,000,” Aquino says. “That’s estimating that an EMS ride is about $2,000 a ride, which is a national average; it’s probably higher here.” Many of those benefitting from this program are experiencing homelessness or are without work and may not have means to pay for an ambulance ride, but of course that doesn’t mean no one pays. Costs like these that cannot be collected directly may be paid through a program funded by taxes or become part of a general cost of operation, which means the entire community pays for them in one way or another.

Another Catholic Social Services initiative is also related to healthcare: the Medical Respite program at Brother Francis Shelter “provides a space for the self-care and recuperation that patients discharged from medical facilities would have in their own homes,” according to the nonprofit. For example, a person experiencing homelessness may sustain a foot injury that would be treated in an emergency room; follow-up care instructions that include bed rest or staying off the foot, or even just keeping the foot clean, warm, or elevated, may be impossible for a person without a home. In the past, without a safe environment to be discharged to, that patient would often remain in the hospital, occupying a bed, though he or she no longer technically required hospitalization.

The Medical Respite program is a partnership between Catholic Social Services and all three major healthcare entities in Anchorage: Alaska Regional Hospital, 501(c)(3); Providence Alaska, 501(c)(3); and the Alaska Native Medical Center, 501(c)(3), which is owned and operated by Southcentral Foundation, 501(c)(3), and the Alaska Native Tribal Health Consortium, 501(c)(3). “This was a common issue that they could all come together on because they’re all very compassionate and want to make the community stronger, and they were all struggling with the fiscal issue that is their hospital beds remaining full with people who don’t medically need to be in a hospital,” Aquino explains.

Hope in the Community

This is also the case as Hope Community Resources, a 501(c)(3), pursues its mission of “providing the resources that individuals and families need and removing barriers for them to live full and productive lives,” according to Michele Girault, Quality of Life director for Hope. Sharayah Talarovich, the organization’s director of human resources, says Hope employs 900 people directly throughout the state to pursue that mission. In 2018, Hope paid out $40 million in wages to its staff members who strive to provide aid to those with differing abilities in securing gainful employment, housing, and other life necessities.

Up until 1997, a number of individuals in Alaska were housed at the Harborview Developmental Center, located in Valdez. “It was closed in the ‘90s from a lot of advocacy to view communities as a place for everyone and really honoring differing abilities and providing work opportunities, life opportunities, volunteering opportunities, stable housing, and mental health supports,” Girault says. According to Alaska Developmental Disabilities System in 2018, a Hope publication, if Harborview were still open, it would cost $252,427 per resident, significantly more than the average home-and community-based Medicaid waiver utilized today that costs a third of that price.

According to the same report, 20 percent (more than 450) of the individuals who Hope provides resources to are employed or working toward employment. These individuals, who otherwise may have difficulty finding employment, now have funds with which they occupy housing, shop at retail outlets, and engage in entertainment and recreational activities—they help build the economy, as do the 900 people directly employed by Hope. Additionally, Hope finds opportunities for those they serve to volunteer in areas that they’re passionate about. This benefits communities through more than just the actual volunteer hours—it’s not unusual for these volunteer opportunities to turn into employment as employers can observe the value of these volunteers. “They’re seen as being just as capable,” Girault says.

Government, Industry, and Nonprofits

Hope and Catholic Social Services lean more toward charity in their missions, but both organizations have to operate with sound business principles to be able to meet their mission year after year. In this, nonprofit and for-profit organizations often have more in common than not. Wolf says, “Private industry and government and the nonprofit sector—we all want the same things: we all want a strong economy and every industry leader wants certainty… We really designed Alaska’s Nonprofit Sector: Generating Economic Impact to say: We’re sitting at the table with you—sometimes we have to bring our own chair [she laughs], but we’re sitting there right next to you… It’s a myth to think that only industry is doing this or only government is doing this or only the nonprofit sector is doing that. It takes all three of our sectors together to make this work.”

Alaska’s chambers of commerce are often proponents of that exact kind of interaction and communication as they bring together for-profit, nonprofit, and government entities to build healthy business communities. “We all look at the business environment from 5,000 feet; we look at what’s in the best interest of business and business development in our community,” says Bruce Bustamante, president of the Anchorage Chamber of Commerce, a 501(c)(6). He continues, “We have three seats on our board of directors that we hold for the military; a seat for superintendent of the Anchorage School District [Anchorage School Business Partnerships is a 501(c)(3)]; and we have a representative from the Anchorage Assembly and a representative from the Municipality of Anchorage… in our situation we can act as a liaison, pulling military and government into business.”

Bustamante says that the Anchorage Chamber of Commerce offers “three pillars” to its members: business education, networking opportunities, and advocacy. The nonprofit’s six employees work to provide those services to its more than 900 member organizations, “which range in size from one-person members all the way up to some of the largest oil companies, banks, and other large businesses in Anchorage.” Of those 900 organizations, he roughly estimates 100 are nonprofits. “If a person wants to come to our committee meetings or to our board meetings and speak on an issue, they’re talking to probably the most diverse business group of any organization in Anchorage,” he adds.

It’s pretty difficult to argue against the idea that, as all those groups work together, Alaska will feel the benefit.

Nonprofits aren’t always the most visible in the community, in large part because they don’t spend their funds on advertising—they spend them on their mission. And that mission, which is often dismissed as just soft-hearted charity, is generally anything but. “Unlike most anywhere in the Lower 48, [nonprofits in Alaska] are delivering essential services. When your house catches fire in rural Alaska, it’s a nonprofit fire department that puts it out. When you get in an accident on the Seward Highway, it’s a nonprofit ambulance service that picks you up. So while it might look like a grant at the state level can just be cut, the amount of money that the state would spend to deliver the same service would be astronomically higher,” Wolf explains. “This is a conversation about how nonprofits are really doing it better, cheaper, and faster. The state will spend more money without us. We’re leveraging volunteers; we’re leveraging private philanthropy. We’re on the ground, we live in those communities, and we know what our communities need. It’s effective. It’s efficient. And it’s the best use of a state or local government dollar. We have to be in it together.

“I would love for everyone to really think about how is it that nonprofits impact their lives in both the obvious and then really not obvious ways, because nonprofits are really busy doing the work. They’re not always very good at telling their story, and it’s not always very obvious when a nonprofit is behind this amazing thing that’s happening in your life.”