Nonprofits enrich the community

By NANCY KIMBALL/Daily Inter Lake

They help meet a variety of needs and also serve as an economic engineIn this season of giving, Flathead Valley nonprofit organizations play a prominent role in local generosity.

Particularly in this year's recession, when the local Salvation Army, for example, is reporting a 20 percent drop in donations and 40 percent jump in demand, the need is great.

But in every season, nonprofits do much more than funnel donations into helping the less fortunate. They elevate quality of life for the needy and lonely as much as for the lovers of the arts and animals.

Their presence enriches the community in humanitarian and financial ways.

"What I really love about nonprofits is that diversity, from basic needs up to the highest spiritual and cultural outlook and growth," said Ned Cooney, program director for the Flathead Nonprofit Development Partnership.

Organizations such as the food bank, Red Cross and Samaritan House meet basic needs for food, shelter and clothing - "that immediate need for help, assistance right away," Cooney said.

"Then there is sort of a higher level, a less urgent level but just as important for people that connect to nonprofits," he said. The Hockaday Museum of Art, local theater companies, Stumptown Art Studio and The Museum at Central School are among those meeting a call for "growth and development for spiritual, intellectual and social needs; they have this niche of really developing the human brain, the spiritual needs."

Cooney worked with nonprofits in California before moving to the Flathead in 2004 and getting involved with the Flathead Nonprofit Development Partnership, a connector and resource for nonprofits.

Nonprofits boost the human spirit, not just the human condition.

"There is a social community benefit that is intangible and also there is a tangle economic benefit," Cooney said.

"The reason nonprofits exist is to relieve the burden of government or fill a gap that is left by the market."

Take health care, for example. Kalispell Regional Medical Center and North Valley Hospital have charity-care funds set aside in their budgets, he said, for patients who have exhausted every other means of paying for care.

It's an option typically not available from for-profit businesses and government agencies. The dollar value of those gap-fillers is hard to pin down.

"If we capture information about all the kinds of work they do, the incredible dollar value contributed to the community, we know the real dollars but we often don't know the in-kind value because people just contribute," Cooney said. "There are a lot of (donations' nonprofits leverage through volunteers working."

But the organizations also make a solid impact in real-dollar terms that can be measured.

Flathead County had 147 nonprofits with $25,000 or more in annual gross revenue in the fiscal year ended June 2006, the most recent numbers available. At that budget level, organizations are required to register with the Internal Revenue Service. Churches and other religious organizations are tracked differently.

That gives a good idea of the number of nonprofits that have substantial operations, he said, but many more - groups such as Little League that have no paid staff - involve huge numbers of volunteers.

If that is to be translated into dollars, Independent Sector, a national coalition of nonprofits, put the value of each hour volunteered nationally at $19.51 in 2007. In Montana, the value of an hour of volunteer service was $13.51.

Cooney said between seven and 15 people sit on each of the Flathead's nonprofit boards of directors. Figuring it at 10 board members on each of the 147 groups that register with the IRS, that's 1,500 positions.

Many sit on two or more nonprofit boards, "but that's when they talk about the program volunteers who stack food" and do the hands-on work, he said. "It's a difficult number to capture accurately because all these organizations out there who may or may not track the number of volunteers."

According to the Montana Nonprofit Association, the Flathead's 147 nonprofits had 2,710 employees who averaged $31,379 in annual pay, for over $85 million in total pay in fiscal year 2006. That's the third highest among Montana economic industries, behind only retail trade and local government. And nonprofit wages totaled more than agriculture, real estate, utilities and mining combined.

State agencies often contract with local nonprofits to provide services. If not for the nonprofit, the agency would have to hire staffers, almost certainly at a higher wage, to do the same work.

Each dollar paid in wages generates buying power in the local community, turning into a significant economic engine.

Not only wages, but nonprofit expenditures make a big ripple in the local economy. The 147 Flathead organizations spent more than $167 million and had assets worth nearly $266 million in fiscal 2006. Across the state, Montana nonprofits pumped more than $2.8 billion into the economy.

A portion of their revenue comes from federal contracts and grants and through grants from private foundations such as the Northwest Area Foundation. All of it is outside money that, if not for the in-kind matches and services pledged by the nonprofit, may never find its way to the Flathead.

Statewide, nonprofits base their budgets on a plethora of sources - foundation grants, individual gifts, state and federal grants among them - but the major source for Montana nonprofits in fiscal 2006 was fees people pay to receive a nonprofit's services. With 77 percent of their budgets funded by these program service revenues, Montana nonprofits stood above the national average of 72 percent.

Conversely, private contributions from individuals, corporations and foundations accounted for 10 percent total revenues reported by Montana nonprofits. In fiscal 2006, that was lower than the national average of 13 percent.

Doug Rauthe, executive director at Northwest Montana Human Resources, works to fill the community's basic human needs.

"You've heard the adage, 'a hand up, not a handout,'" Rauthe said. "I think you need both because there are times you absolutely need the handout, but you don't want to keep them in the mode of needing help. So that's where the hand up comes in."

Since 1976 the private nonprofit - which on Jan. 1 changes its name to Community Action Partnership of Northwest Montana - has served Flathead, Lake, Lincoln and Sanders counties. About 120 people are on the payroll.

Rauthe said that, other than the hospital, the organization is the largest nonprofit provider of direct services in the region, and one of the largest referral agencies.

In today's economic crisis, his staff is helping people with rent and utility bills, job searches, interviewing and employability training, direct training for some job opportunities and financial literacy education.

The agency also runs the Mutual Self-Help Housing Program. Qualifying low-income families receive financing for modest housing but give back by helping build each other's homes in their eight-house neighborhoods. In six years the program has built 104 homes and by this week will have 16 more under way.

"It does make an impact," Rauthe said. "It's a very hard program to do but it asset-builds, it community-builds, it stabilizes families. It gives dignity and it fosters economic development."

His annual budget is about $6 million, but millions of dollars more come into people's lives that don't pass directly through the organization. He estimated the nonprofit creates a $10 million flow into Northwest Montana a year; add another $2.5 million to $2.6 million for the 16 homes built a year.

"The rule of thumb, with new dollars coming into Montana, there's a minimum turn of three times' in the local economy, making a total impact around $40 million, he said. Clients eventually need fewer services "and they are now contributing. They're becoming taxpayers, and they love it."

Kate Daniels at the Conrad Mansion and Museum helps to meet the community's cultural cravings.

"The community doesn't always think about the nonprofit cultural economic impact here," she said from the historic Kalispell mansion. " 'Nonprofit' is a misnomer. It should be considered more of a community benefit organization."

A study by the National Trust for Historic Preservation shows that cultural heritage visitors to an area spend about 36 percent more than an average visitor. In Kalispell, Daniels said, that translates to $75 more a day - and an extra half-day stay on average, staying in hotels, buying restaurant meals, shopping, visiting other sites.

"People who come and are visiting the Hockaday or Central School [Museum] or the mansion are people who generally have a higher income level, have more interest in shopping and have longer trip durations," Daniels said.

The Conrad Mansion serves 10,000 visitors a year, she said. Most want simply to get the flavor of what the community has to offer, but 2,000 of them are students.

Visitors are coming despite the recession, but she expects to see a drop. She also expects to see more 'stay-cations' by locals interested in finally making that visit to see what the area has to offer.

"Arts and culture in our community really is the expression of our community's heart and soul, and it's why we love it here," she said. "It defines our sense of place and it really connects us to our heritage in our community. It describes us. It gives you a point of departure when you come to an area."

On the Web:

www.npdp.org

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com