A special report on Montana's Economy and Businesses

Profiting nonprofits Organization releases major study on impact of groups By ROBERT STRUCKMAN of the Missoulian Every industry, issue and, it seems, scenery-rich wild valley has its own nonprofit advocacy organization. It is fitting, then, that Montana nonprofits recently banded together to form their own advocacy group, the Helena-based Montana Nonprofit Association. This month the group has released its first major report, a broad study of the financial impact of nonprofits on the Montana economy. “This is an industry in its own right,” said executive director Brian Magee. He cited a few statistics from the report, titled “The Montana Nonprofit Sector”: Expenditures by charitable nonprofits, for example, totaled $2.5 billion in 2002; nonprofits that year held $4.1 billion in assets. Missoula County ranks at the top of the county scale, with a total of 217 revenue-producing nonprofit organizations. Annual 2002 expenditures by Missoula County nonprofits – at $417 million – ranked second in the state to Yellowstone County with $591 million, according to the report. The numbers are like a fresh breeze to Larry Swanson, head of the Regional Economy Program at the Center for the Rocky Mountain West. Based on anecdotal information and an understanding of the state’s economy, Swanson said the role of nonprofits was “outsized” and “tremendous.” “Good solid numbers on nonprofits are hard to find,” Swanson said. This is the first year that the Montana Nonprofit Association has conducted a study on nonprofits in the state. Magee characterized the study as “baseline” figures that will be useful in spotting trends over the coming years. Yet Swanson disagreed with the study in a few respects. He questioned why, for instance, the financial impact of hospitals and private colleges was lumped in the report with human service organizations and other nonprofits that would likely to have much smaller, but still significant, assets and expenditures. “They kind of swallow up the arts and culture, the environmental, the human service groups,” Swanson said. Nevertheless, it is a no-brainer that the role of the smaller nonprofits in the state is tremendous, and the data on the overall number of nonprofits in Missoula is astounding. “You can walk down the street and see the office fronts, left and right, here and there,” Swanson said. Many have fairly large budgets, he said, with highly educated professional staffs. In a relatively small economy like Missoula’s, he said, a few hundred jobs in the nonprofit sector has a major impact. “The small size of the city magnifies their presence. They’re not gobbled up and lost in a place, as they might be in Boston or San Francisco,” he said. The same might be said about all of Montana. With almost 5,500 registered nonprofits in the state – double the number registered in 1992 – it is hard to imagine any facet of life not affected by at least one. The vast majority are local, all-volunteer outfits with only marginal assets. In 2002, 1,520 nonprofits filed tax documents that reported annual receipts of more than $25,000. The balance – about 4,000 – is purely the result of grass-roots efforts. They focus on everything from history to the environment. Some of those 4,000 are undoubtedly inactive, Magee said. There’s no way to tell. The list is simply a total number of organizations who have filed for nonprofit tax status through the state. Even if half have ceased to function, it remains an impressive figure. “These all-volunteer organizations play a vital and critical role in ensuring healthy communities. They work behind the scenes and have organizations, basically, with boards of directors who do everything,” he said. The Montana Nonprofit Association was one of them until a year ago when Magee was hired as its first director. The organization, which began about four years ago, grew to address a specific need, said Gary Owen, the association’s board chairman. Owen heads the United Way in Cascade County. The 205-member association’s mission is to promote a stronger nonprofit sector and a supportive public climate. The group’s members come from all corners of the state and range in size from the largest to the smallest unstaffed nonprofits. Specifically, nonprofits were having a difficult time providing employees with health insurance and training. Likewise, without data on the overall significance of nonprofits in the state, it was difficult to approach state legislators with ideas on how to foster nonprofits. And there was no single group, representing nonprofits in general, to tout that message. The association began to offer a health insurance program to its members in March 2004, in partnership with New West Health Services. The program even provides coverage for “groups of one,” organizations with only a single eligible employee. The association also aids nonprofits with unemployment insurance costs and offers training events and even discounted subscriptions to nonprofit periodicals. As for a source of far-ranging and specific information about nonprofits in the state, Magee agreed with Swanson’s critique. He said his association plans more studies to continue to track the various clumps of nonprofits in the state. “This study is important as a baseline to use as a point of departure,” Magee said.