Nonprofits: an industry vital to state’s success

However you choose to describe its role, government does not work in isolation. The economic prosperity of our state and the well-being of our people hinges on the interconnected roles of all three sectors: business, government and the nonprofit sector.
Each sector contributes its own unique value and has its own distinctive strengths and challenges. A core challenge to the nonprofit sector is that most people think of nonprofits only in terms of a cause they support, rather than as an industry integral to the state’s success.The New Hampshire House presented a proposed budget to the Senate that slashes $742 million from the state budget, a far more severe number than Gov. John Lynch’s proposal. If approved, these cuts would greatly impact the lives of individuals and families depending on a wide range of vital services the state contracts with nonprofits to provide.Amid the House debate, sweeping statements are circulating about the nonprofit sector. Some say there are too many nonprofits and too many state contracts. Others profess charitable donations can cover the cost of services and volunteers or church groups will step in to fill the gaps. Others are suggesting arts and cultural programs and environmental initiatives can be put on hold.These questions clearly indicate confusion about the impact of nonprofits and the industry as a whole, all of which deserves clarification.Nonprofits are the vehicle Americans use to address the needs of people and communities. As the population has grown and society evolved, these needs have intensified in scope and complexity. Today‘s nonprofit sector has stepped to the plate to address the need for affordable housing, clean air, lead paint abatement, child care, land preservation, literacy training, home care for seniors and much more.Of the 8,067 registered New Hampshire nonprofits, approximately 2,867 are either foundations or in a category called “other,” which includes fraternal clubs, testamentary trusts, booster clubs and the like, which do not receive state support. Of the remaining 5,203, a surprising 77.9 percent have budgets under $100,000.What this means is that only 22.1 percent, or 1,800, are public charities with budgets over $100,000. Of all the public charities, only 165 contract with the state to provide vital services for people and communities.The total amount of charitable giving in New Hampshire each year is just over $500 million. The largest slice is given to religion and education. Only 9 percent is given to human services, 4 percent to arts and culture and 1 percent to environmental causes. It’s unimaginable to suggest donations for human service organizations could reach a fourfold increase in one year’s time and absorb the state’s cost of fulfilling its obligations to people and communities.More than 335,000 people volunteer in the nonprofit sector each year. However, much of the work requires trained expertise and the commitment of a paid staff. The notion that a churchgoer or volunteer will jump in to provide drug counseling, dental care and mental health therapy and manage a low-income housing program is a myth.More than 98,000 people are employed in New Hampshire’s nonprofit sector – one in eight workers. Nonprofits contribute 14.5 percent of the gross state product, more than $8 billion a year.More importantly, nonprofits help hundreds of thousands of families regain stability each year. When nonprofit housing and support programs help a homeless mother of three children secure an apartment, pass the GED test, find child care and attain a job, this family is again able to actively participate in our economy.The state contracts with nonprofits to deliver services for many sensible reasons: It’s the most cost-effective method, nonprofits provide specialized services, nonprofits can innovate more easily than government, and most importantly, it is the way in which the state fulfills its obligations to people and sustains its communities.As lawmakers move through a difficult decision-making process, we urge serious deliberation of what New Hampshire citizens truly value in our communities and how we are going to ensure the preservation of what is important and what truly makes the state vibrant and sustainable.Mary Ellen Jackson is executive director of the New Hampshire Center for Nonprofits.