Read past Perspectives

Read
NewVoices/
NewWest: Reporting by the region's top journalism students

Read Courtney White's series: A West that Works

Read the Interior Secretaries series

Groups craft Santa Fe River access one parcel at a time
Santa Fe New Mexican; 01/17/2005

Profiting nonprofits
Missoulian, 11/14/2004

Colorado trust helps keep water in Blue River
Denver Rocky Mountain News; 09/15/2004

Experts see endowments as a way to help Wyoming's small towns
Casper Star-Tribune; 06/11/2004

Arizona's nonprofit sector shows its mighty power
Arizona Republic, 09/26/2003

Wyoming Community Foundation Report:
The Hidden Sector in our Economy: Nonprofit Organizations in Wyoming (pdf)

Arizona Community Foundation Report:
Arizona's Nonprofit Sector: The Spirit of Arizona

Colorado Association of Nonprofit Organizations
The Colorado Nonprofit Report (pdf)

Montana Nonprofit Association

Montana Nonsector Report (pdf)

Utah Nonprofits Association Report:
The Utah Nonprofit Sector 2000

National Center for Charitable Statistics at the Urban Institute
2003 listing of public charities by category in:

• Arizona

• Colorado

• Idaho

• Montana

• Nevada

• New Mexico

• Utah

• Wyoming

Not-for-profit clout

Last summer the Wyoming Nonprofit Support Initiative issued a report profiling the economic impact and characteristics of Wyoming's nonprofit sector.

This report found a surprising fact, given the state's strong minerals extractive industry: Wyoming nonprofits employ more people than the mining industry. The nonprofit sector was the third largest source of jobs in the private sector in 1997, and the fourth largest when government employment is considered.

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Wyoming nonprofits employ more people than the mining industry.

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"The Hidden Sector in our Economy: Nonprofit Organizations in Wyoming" included a summary introduction by Wyoming Gov. Dave Freudenthal:

"Nonprofits contribute to the Wyoming economy, create jobs, magnify the impact of public investment, and bring additional resources to our state. These charitable organizations return public and private investment to Wyoming communities every day through a broad array of important services and programs.

"Much attention is given to the condition of business and government in our state, but let's not forget that nonprofits play a critical role as a third and independent sector, providing leadership and strengthening the social fabric of Wyoming," stated Freudenthal.

Both the governor's office and the Wyoming Business Council provided support for the report, yet overall, the nonprofit sector in Wyoming remains under-reported by the media and unrecognized by state economic development and business agencies. The Wyoming Nonprofit Support Initiative produced the report as a first step to promote understanding of the sector in Wyoming.

Information used in the report came from many sources, and the initiative notes "there is little economic data compiled by government authorities on the nonprofit sector."

The report provides a summary of all nonprofits in the state, and presents employment and wage information for the entire sector from 1997 data. The report then focuses on the largest subgroup of nonprofits: charitable organizations – those that are registered under section 501(c)(3) of the federal tax code.

Fourth largest source of all jobs in Wyoming

The media rarely reports on nonprofits as business, nor are its employees or economic value counted separately in common economic indicators.

Yet Wyoming nonprofits accounted for 17,341 jobs in Wyoming in 1997, making it the third-largest source of jobs in the private sector, and fourth-largest when government employment is considered.

The Wyoming nonprofit sector is large, diverse and growing, with more than 4,000 tax-exempt organizations registered with the Internal Revenue Service.

Nonprofit organizations employ thousands of residents who pay state and federal taxes. They buy or rent housing, purchase goods and services and participate in the economic life of local communities in the same way as other private sector employees.

When total wages are considered, nonprofit employment ranked fifth in the state for private sector wages in 1997, greater than agriculture, the finance and insurance industry, wholesale trade, manufacturing, and the transportation and communications industry.

At an estimated $350 million in annual wages, the nonprofit sector is close to the $360 million in wages earned by the construction industry.

Charitable organizations generate economic growth

The largest and best-known subgroup of nonprofits is 501(c)(3) charitable organizations. In 2001, Wyoming had 2,451 such group.

Of them, 894 were required to file financial reports with the IRS because they had more than $25,000 in gross annual revenues.

Using this financial information and excluding foundations, Wyoming's 734 charitable nonprofits generated $536 million in revenue and held more than $1.2 billion in assets for 2001.

Wyoming's charities alone generated 2001 revenues in excess of the gross state products of agriculture, durable goods manufacturing, trucking and warehousing, all communications industry, and the federal civilian government sector.

The $536 million figure is 3 percent of the $17.8 billion private sector component of the 2001 gross state product.

The charitable nonprofit sector of Wyoming also is a young and fast-growing sector. Of the organizations existing in 2001, 41 percent did not exist 10 years earlier.

Assets grew by a phenomenal 234 percent in 10 years. Revenues grew by 200 percent over the same time. Compared to growth rates in the state's gross state product over 1991 – 2001, Wyoming nonprofits grew faster than any other economic sector measured.

Overall, state GSP grew by 51 percent. Charitable nonprofit revenues grew faster than the top growth industries of manufacturing (146 percent), construction (126 percent), services (102 percent) and wholesale trade (97 percent) over the same time period.

Leveraging dollars into communities

The major source of revenue for reporting charitable nonprofits in Wyoming was fees for services and programs, at 37 percent of total revenue for the sector (2000 figures).

This runs counter to a common misconception about nonprofits — that these organizations depend solely upon charity for support. In fact, Wyoming's nonprofits are funded by a healthy mix of income sources, including (in addition to fees) private and corporate donations, foundation and government grants, interest and investments, and other sources. The funding mix of any individual organization, however, differs with its size and mission.

Another misconception is that nonprofits rely extensively on government grants. Only 17 percent of total revenue for Wyoming's charities came from this source. Government grants to charitable organizations for public purposes helps to limit the growth of government and provides for more flexible, community-based services.

When public dollars are invested in charitable organizations, they leverage additional dollars from donors, private foundations, corporations or from fees. Thirty-two percent of the total revenues of Wyoming charities came from contributions made by individuals, corporations and foundations.

Diversity of service

Diversity in mission and ideology, difference in scale and organizational structure, and dispersion throughout all communities are hallmarks of Wyoming's charitable nonprofit sector.

What these organizations share is a commitment to a greater public purpose, responsiveness to the needs of their communities, and a legacy of innovation and flexibility in program and stewardship.

Charitable nonprofits range from hospitals to boys and girls clubs, from educational institutions to environmental groups, from museums and symphonies to organizations working with the elderly, disabled and veterans, and much more.

Human-service organizations make up the largest proportion of reporting charitable organizations (44 percent) in Wyoming. Examples include youth development, disaster relief, housing services and family support.

Health care and education are the next largest types, with each at about 13 percent of the total. Arts and culture, community improvement, environment and religious-related are other types, ranging from 10 percent to 4 percent of the total.

Wyoming charities accomplish their activities with an equally diverse array of operating structures. Some are run entirely by volunteers, many have only a few staff members, while others have complex organizational structures.

The majority of them are tiny, and 1,557 organizations do not even meet the threshold of the required financial reporting for the IRS. Of the 734 that do, 41 percent have annual budgets of less than $100,000. Twelve percent of these, or 85 organizations, have annual budgets of more than $1 million.

Wyoming's nonprofits are diverse geographically and are present in every Wyoming county. These organizations bring resources, services and philanthropic dollars to local communities.

The top five counties for the number of charitable nonprofits, assets and revenues are Albany, Laramie, Natrona, Park and Teton counties. Fremont and Sheridan counties then follow in a second tier of strong nonprofit activity.

These seven counties account for approximately 72 percent of all reporting charitable organizations, 89 percent of total assets and 72 percent of all revenue for the sector in the state.

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Seven counties in Wyoming account for 89 percent of total assets and 72 percent of nonprofit revenue in the state.

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Strengthening the Wyoming nonprofit sector

Despite the surprising economic impact, growth and diversity of Wyoming's nonprofit sector, the initiative report notes major challenges for nonprofits in Wyoming. Wyoming attracts few outside resources and investments by national foundations and falls within the last 10 states nationally with the least amount of in-state foundation assets.

These states have been termed "philanthropically challenged." They lack proximity to our nation's concentrations of foundation wealth and to corporate foundation headquarters.

They share other characteristics: a dispersed low population base; a lack of significant population and commerce centers; a limited industrial or manufacturing base; and dependence on agriculture or natural resource economies.

As a result of this limited foundation base, Wyoming lacks much of the infrastructure and resources typically found in other states to support and assist nonprofits. This, in many ways, is why the Wyoming Nonprofit Support Initiative was started — to start to address these needs.

The initiative recognizes that leveraging more national and corporate foundation support into Wyoming will help grow this sector and increase its programmatic impacts.

Supporting local philanthropic giving will also benefit this sector. But additionally, the report recommends that economic development officials need to consider this sector like other businesses, and recognize the potential of nonprofits as an economic driver that adds amenities and enhances communities.

The nonprofit sector of Wyoming is an untapped resource for growing and diversifying the state's economy. Given Wyoming and the West's changing economies and demographic trends, the nonprofit sector can play a significant role in Wyoming's future growth.

Their members work to protect watersheds, build affordable housing and stand as advocates for the poor, the immigrants, the disenfranchised.

Their paid and volunteer ranks work to preserve open space, save wilderness and serve as citizen watchdogs for a plethora of public services.

Pick up a newspaper any day of the week in any of the Rocky Mountain states, and you'll read about a nonprofit group holding a forum, restoring riparian areas, working to preserve open space or performing a litany of other public services.

But those nonprofit organizations are also pumping billions of dollars into the economies of the Rocky Mountain States.

The findings of the Wyoming Community Foundation on nonprofits' contribution to Wyoming's economy uncover some interesting facts. Nonprofits are the fastest growing sector in that state's economy, and expenditures for that sector in 2001 exceeded $430 million, putting it above manufacturing, trucking and agricultural sectors.

Wyoming is not the only Rocky Mountain state with a healthy, viable nonprofit sector. A review of nonprofits in Arizona, Colorado, Montana and Utah play out the trends presented by Wyoming.

There are more than 22,000 nonprofit organizations operating in Arizona, employing more than 105,000 workers. In 2001, 18,950 Arizona 501(c)(3) nonprofit entities posted revenues of $10.37 billion; $2.18 billion came from contributions, gifts and grants.

In 2001, Colorado had more than 15,000 nonprofit organizations, although only about 5,200 exceeded the $25,000 gross receipt ceiling requiring them to register with the IRS. Those groups had $9 billion in gross expenditures in 2001, representing about 5 percent of Colorado's gross state product.

Montana had 1,520 charitable nonprofits that had to register with the IRS in 2002, and those groups had $2.5 billion in expenditures, representing 11 percent of the state's 2001 Gross State Product.

Nearly 1,700 nonprofits in Utah met IRS reporting requirements in 2001, and those had nearly $3.2 billion in expenditures and accounted for about 5 percent of Utah's gross state product.

When you look at categories of nonprofits in these states, most of them are involved in health and human services work, followed by education and then by environmental concerns.

Many nonprofits have sprung from a need to fill gaps left by shrinking government funding or to address new environmental concerns, such as in Colorado where growing concerns about water supplies have spurred the creation of the Colorado Watershed Network.

Nonprofits in the West are also relatively young, with nearly half being formed since 1990.

There is a misconception that nonprofits exist primarily on government funding. In Wyoming, only 17 percent of funding comes from government grants, with 37 percent coming from fees for programs.

Montana nonprofits get 74 percent of their revenue from fees; Arizona nearly 80 percent; and Colorado 59 percent.

Nonprofits do more than put revenue into states' streams of commerce. They often provide employment to underemployed or unemployed workers, improve communities and the quality of life in those communities and help train work forces.

Wyoming is working to bolster support for nonprofits in the state. Similar efforts are under way in Colorado which boasts a nonprofit development center and an association for nonprofit organizations.

Spurred by a desire to offer health insurance to employees, Montana nonprofits formed their own advocacy group four years ago. That group now also works with legislators to foster nonprofit growth in the state. Idaho nonprofits formed a similar advocacy group in 2001.

The Utah Nonprofit Association formed in 1990 and has more than 300 members.

As budgets shrink even further and needs grow larger, nonprofits will continue to grow, as will their influence and presence in the Rocky Mountain West.