Report: Non-profits aid state economy

  • By IAN FOLEY
  • Wednesday, March 4, 2015 9:41pm
  • News

Non-profit organizations play an integral role in Alaska’s economy.

That was the message from Dennis McMillian, CEO of The Foraker Group, on Wednesday at the joint Kenai-Soldotna Chamber of Commerce luncheon held in Kenai.

“We are the people who build community,” said McMillian, referring to non-profits. “We are the people who make community healthy and keep it healthy.”

McMillian, whose company provides services and consultancy to non-profits, said that several years ago, Alaska’s non-profit market became oversaturated. He cited 2010, when there were over 7,000 non-profits in the state.

“That’s one non-profit for every 100 people,” McMillian said. “Nationally, the norm is one non-profit for every 200 people, so twice the density as the rest of the country.”

Due to a variety of factors, the number of non-profit organizations has been decreasing in Alaska. McMillian said there are approximately 5,700 non-profits currently in the state, and that number still continues to decrease.

“We do think that trend will continue into the future,” he said. “Some of it will have to do with not being able to get enough board members. Some of it will have to do with the state’s economic situation.”

As Alaska’s non-profits have seen a $460 million decrease in government grant money between 2007 and 2013, the combined earned revenue has grown by $740 million in that same time frame, according to statistics provided by The Foraker Group.

“Non-profits have learned how to make money,” McMillian said.

Despite the decrease in number of non-profits, they still continue to be a major boon for the state’s economy.

On the Kenai Peninsula, McMillian said between 18-19 percent of the workforce is in the non-profit sector. Nationally, he said the average is 10 percent.

Statewide, more than 39,000 people are employed by non-profits. The organizations have combined revenue of $6.5 billion, according to information a slideshow presented by McMillian.

“That’s 13.5 percent of the state’s gross domestic product,” he said. “It’s huge. Very few industries can say they have that much of an impact on the economy.”

McMillian said that after non-profits hire lawyers and accountants and join banks, they are indirectly responsible for 63,000 in-state jobs.

It is a common misconception is that people who work for non-profits aren’t capable of working in the private sector, he said.

“There are a lot of people who don’t care about money,” he said. “They care about community, and that’s what the non-profit sector is.”

 

Reach Ian Foley at ian.foley@peninsulaclarion.com.

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