January 31, 2013 | Back to: Local News

Non-profits are crucial cog in Nevada County

While there are more than 600 nonprofit entities in Nevada County that champion everything from environmental stewardship to social clubs, not all play in the same league.

Take the Ponderosa Pine Social Club for instance. With no reported revenue, it is a far cry from the size and scope of Hospice of the Foothills, which brought in $6.2 million of revenue in 2011 and had $4.4 million in salaries and related compensation, according to federal tax records.

For nonprofits operating at the level of a Hospice of the Foothills, the clamor for resources in today’s peckish economy — and where those resources are allocated — is more complicated than is perceived at first glance.

While the lion’s share of the county’s nonprofits are smaller entities, at least one quarter of them have an annual budget of more than $25,000 each, which necessitates comprehensive financial disclosures to the Internal Revenue Service.

According to Nevada County’s Center for Nonprofit Leadership, those 154 upper-echelon nonprofits have a collective budget of $75 million each year and spend $34 million in salaries and benefits to employ at least 600 people.

Combined, those nonprofits would form the third largest employer in the county, behind the county government and Sierra Nevada Memorial Hospital, which has its own nonprofit — one of the largest around.

“It’s a uniquely American thing to have this third sector,” said Jennifer Litton Singer, executive director of Nevada County’s Friendship Club.

To describe the spectrum of nonprofit causes as “far-reaching” is an understatement.

Focuses include the arts, churches, charities, the homeless, mental health, substance abuse, recovery, sports, schools, pets, native peoples, neighborhood associations, women’s advocacy, skiing and snowboarding, sustainability, politics, realty, drug use and alcohol appreciation, lodges, public safety and farming, among many others.

“If the need weren’t there, then there wouldn’t be as many nonprofits,” said Cristine Kelly, Music in the Mountains executive director.

The sheer volume of nonprofits gives rise to the perception that the county is supersaturated.

“It’s a myth, definitely. The reality is there isn’t a lot of duplication,” Litton Singer said. “If anything, there are more gaps than overlaps.”

Financial challenges:

Residents and businesses in Nevada County gave close to $40 million annually to county nonprofits, according to a study conducted by the Chronicle of Philanthropy based on 2008 Internal Revenue Service data.

By that measure, the county ranked in the top 17 percent of charitable counties nationwide before the economy stalled.

“This community has the spirit of giving,” said Norm Westmore, a founding chairperson of the Center for Nonprofit Leadership.

As the housing market crashed in recent years and the economy slumped, property and sales taxes inevitably followed.

Schools and governmental agencies saw their budgets diminish, and in turn, services and programs were cut.

“The issues we face are very large,” said Jeff Brown, Nevada County’s health and human services agency director. “Government doesn’t have the ability to solve all of them.”

Nonprofits are being asked to do more and be more flexible, Kelly said.

“There is a big gap between government services and business,” Kelly said.

As the demand for nonprofits rose and the availability of funds became a more precious commodity in a county of nearly 100,000 people, area nonprofits not only saw competition increase but collaboration and innovation as well.

“It’s not an economic challenge anymore. It’s the new reality,” Kelly said.

Some nonprofit organizations saw a decrease in public services as an opportunity to fill a gap, while others lost much of their funding.

Sierra Nevada Children’s Services, which connects families to child care options based on need and budget, saw its funding drop more than $1 million between 2010 and 2011.

At the same time, household disposable income in California grew only 11.7 percent over the five years leading into 2011 — only one-tenth of one percent more than inflation — ahead of only Nevada and Arizona nationwide.

“There are so many (nonprofits) that raising money is — well — there is only so much money in the county,” said Joshua Lichterman, Alliance for a Post-Petroleum Local Economy board of directors president.

“The gorilla nonprofits get the most money, and then everyone else fights for the crumbs,” Lichterman said.

Determining where that donation money goes is complicated as nonprofits’ revenue is not based solely on donations.

“It’s really dangerous to put your eggs into one basket,” said Julie Baker, Grass Valley’s Center for the Arts executive director.

Some nonprofits, such as Milhous Children’s Services, which helps fund a special-needs treatment ranch, gets more than 80 percent of its revenue from grants.

Sierra Streams Institute, which monitors water quality in local rivers, earns 75 percent of its income from the programs it offers, such educational opportunities, publications, consultations and restorative efforts.

Nonprofits also rely heavily on fundraising efforts, such as the South Yuba River Citizens League’s Wild and Scenic Film Festival, and many of the Center for the Arts’ events are collaborative efforts to help fund other nonprofits.

Over the last three years, the Center helped raise more than $60,000 for other area nonprofits, according to its staff.

The Center also relies on membership dues, which comprise a third of its revenue, Baker said.

Most nonprofits lean heavily on volunteers as well as, to keep their costs down.

Hospitality House, the county’s largest homeless service organization had 20,000 volunteer hours in 2012 to help donate more than 40,000 meals to homeless people, said Cindy Maple, the organization’s executive director.

While grants can be a boon to a nonprofit, there are pitfalls.

“The grant game is brutal,” Lichterman said. “It’s so competitive … they take a long time to produce, and you can make a terrific proposal only to get beat by an even better proposal.”

Additionally, grants often come with strings attached, mandating that the funds go to a specific program or service.

“Grants do not go toward rent or salaries,” said Sierra Stream Institute Executive Director Joanne Hild.

Grants can also require tedious financial tracking of expenditures, Hild explained of her experiences at the organization, which employs a full-time grant writer to raise 85 percent of its revenue.

Collaboration:

Sometimes, a grant won’t pay until a task is completed, necessitating that the executing agency fund the project only to get reimbursed months or years after its inception.

Not only does collaboration allow for shared resources, but there is a financial incentive to working together.

“Priority is given to collaboration,” said Bill Neff, a board member on the center for nonprofits. “They are looking to get the most bang for their buck.”

With so many nonprofits, another common perception is an abundance of duplications, Lichterman said.

After all, there a several animal nonprofits, as well as those dedicated to senior citizens, music and the environment.

“I do think there is more room for collaboration and possible consolidation,” Baker said.

“Sometimes that is getting past egos and legacy issues … I think you will see donors saying, ‘I can’t keep giving to each one of you, but if you work together, I am willing to give to that.’”

Overall, though, Kelly said specialization has allowed for related nonprofits to focus on niche aspects of their common missions.

“We have to all work together in order for us to all be successful in a community our size,” Baker said.

Sierra Streams Institute, which is dedicated to ensure the health of Sierra Nevada rivers through science, partners with area agencies, such as American Rivers, SYRCL and the Bear River Land Trust, to obtain grants.

Nonprofits focused on homeless issues show similar symbiotic relationships. While Hospitality House is regarded as the largest nonprofit dedicated to service homeless people, it does not allow intoxicated individuals into its shelters nor dogs.

In other areas, Salvation Army and the handful of other area agencies do their part.

“All of us have learned that we have to collaborate,” Hild said. “We’re stronger that way.”

To contact Staff Writer Christopher Rosacker, email crosacker@theunion.com or call 530-477-4236.

Christopher Rosacker
crosacker@theunion.com

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The Union Updated Apr 25, 2014 11:01AM Published Feb 8, 2013 05:38PM Copyright 2013 The Union. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.