Western Pennyslvania’s smaller nonprofits play big economic role
Allegheny County’s community nonprofits pay $1.8 billion in annual wages to more than 75,000 employees, representing almost 11 percent of the workforce countywide, a study obtained by the Tribune-Review found.
The research spotlights the increasing prominence of small- and mid-sized nonprofit organizations in the regional economy. It shows community nonprofits employ more people than Allegheny County’s manufacturing (36,445 jobs) and construction (27,899) industries combined.
“If all the nonprofits turned their lights off, there would be a significant impact to this community,” said Kate Dewey, president of nonprofit consulting group The Forbes Funds, which did the study in collaboration with The Pittsburgh Foundation and United Way of Allegheny County.
Researchers used data from nonprofits’ 2012 federal tax forms “to sharpen their understanding of the social and economic significance of one nonprofit sub-sector: community-focused nonprofits.”
The county has about 2,000 such nonprofits — defined by researchers as organizations with budgets under $100 million that cater to local needs. Not counted in the subsector were universities and health care giants.
The small- to medium-sized nonprofits outpace county employment in leisure and hospitality (70,548 jobs), financial activities (54,711) and local government (46,749), Bureau of Labor Statistics data show. The findings flout public perception that these types of nonprofits are limited to feeble, tiny groups of volunteer do-gooders, said Peggy Outon, director of the Bayer Center for Nonprofit Management at Robert Morris University.
“They are real businesses, and they are real participants in the community,” said Outon, who did not participate in the study. “You have a career in nonprofits — not just a calling, but a career.”
The community-focused nonprofits include everything from food pantries and homeless shelters to programs that help veterans find jobs or revitalize blighted neighborhoods.
Together, they spent $4.5 billion in 2012, the study found. They paid more than $377 million in local and state taxes, most of which came from payroll expenses.
The sub-sector supports 106,392 jobs when including 31,300 indirect jobs in professions such as real estate, finance and hospitality, the study said.
“It’s money that goes back into the economy,” said Mary Frances Cooper, president and director of Carnegie Library of Pittsburgh, which employs 515 full- and part-time employees at 19 locations on its roughly $30 million budget.
The nonprofit Pittsburgh Mercy Health System, which has a $90 million budget and serves more than 26,000 people annually, more than doubled in size in the past 15 years. It has about 1,700 employees — more than Rivers Casino and Siemens, a railroad manufacturing firm, regional economic development data show.
“If you negatively affect this (nonprofit) industry as a whole, you could have an impact much bigger than anticipated with respect to how it plays out in jobs and the economy,” said Ray Wolfe, Mercy Health’s chief operating officer.
The greater Pittsburgh region has a larger nonprofit sector than most places of its population size, benefitting from a historical philanthropic tradition, generous corporate giving and funding sources such as foundations and taxpayer-funded Allegheny Regional Asset District, said Outon. She said she chose to do her nonprofit research and consulting work in Pittsburgh because she sensed this area’s strong support for nonprofits.
“We have such an ethic about neighborhood,” Outon said. “Local nonprofits that are community-focused start from a stronger place here, because we see ourselves as neighbors who are responsible for where we live.”
The study excluded places like the University of Pittsburgh and Carnegie Mellon University, as well as health care behemoths UPMC and Highmark — major nonprofit employers in the region that operate on much larger scales and vie against for-profit competitors. Together, the Pittsburgh-based nonprofits Mayor Bill Peduto dubs the “Big 4” employed more than 80,000 people in 2014, according to officials with the organizations.
The local study reflects national trends.
Nonprofits of all types and sizes — including health care giants — employ 11.4 million nationwide and 780,000 people in Pennsylvania, accounting for more than 10 percent of non-government jobs in America and nearly 16 percent in Pennsylvania, according to Bureau of Labor Statistics figures released for the first time in December.
“It’s no longer thinking about them as just charity,” said Dewey of nonprofits. “They are an integral part to our economy, as well as an integral part of making our communities as strong as they can be.”
Natasha Lindstrom is a staff writer for Trib Total Media. She can be reached at 412-380-8514 or [email protected]