Good work: Doing good is good business

Good work: Doing good is good business

Cristine Nardi asks us to imagine Charlottesville without the nonprofit sector. No Paramount Theater or Discovery Museum on the Downtown Mall. No WNRN to listen to in the car. No Thomas Jefferson Foundation to open the doors of Monticello. No Jefferson School to preserve the legacy of the African-American community. No University of Virginia or UVA Health System.

“The nonprofits in our community reveal what we really care about and believe in in Charlottesville,” Nardi says. “They are the embodiment of our values. It is often said that more people volunteer than vote. It’s off-the-couch, into-the-community engagement. I would go so far as to say that the work that nonprofits do is one of the key factors in what makes us a unique community.”

Cristine Nardi, the executive director of the Center for Nonprofit Excellence, says the work of nonprofits is a key factor in what makes our community unique. Photo: Eze Amos

Nardi, the executive director of the Center for Nonprofit Excellence, is an inspiring advocate for the nonprofit sector, which she describes as “the third leg of the stool” of the economy. “You’ve got the private sector, the public sector and the nonprofit sector. The nonprofit sector does what the public sector can’t do and what the private sector won’t do, or what it isn’t really designed to do.”

What is a nonprofit? 

According to the Center for Nonprofit Excellence’s “Starting a Nonprofit” toolkit:

“A nonprofit organization is one that exists for the public good, rather than to benefit individual owners. Any generated income or property owned by a nonprofit, whether profit or not, is used to support the mission of the organization.

Nonprofit organizations can be unincorporated associations, but in Virginia most take the legal form of non-stock corporations. As a non-stock corporation, the nonprofit is a separate entity from its members so it can own its own property and bank account and offer limited liability for its members. It is run by a board of directors and owned by the public, not by its founder(s).”

Nonprofits improve the quality of life for everyone in Charlottesville, from kids who learn to cook meals at the PB&J Fund to women who receive counseling at the Women’s Initiative to art-lovers who attend the Charlottesville Ballet. “It’s important to realize that we all have a role in the nonprofit sector here,” says Nardi. “We all benefit from the services nonprofits provide and many of us contribute to the work being done as volunteers, board members and financial supporters.”

But how do nonprofits fit into the business community? How do they contribute to the economic success of a city?

Nationally, the nonprofit sector contributed $878 billion to the economy in 2012, or about 5.4 percent of GDP. According to a study by Americans for the Arts, the nonprofit arts and culture industry alone generates $166.3 billion in economic activity every year: $63.8 billion in spending by organizations and an additional $102.5 billion in event-related spending by their audiences.

According to the Bureau of Labor Statistics, the nonprofit sector employs about 11.4 million people. That’s 10.2 percent of the American workforce. And most nonprofits, like most businesses, are small: 82.5 percent have annual revenue of under $1 million.

A study from the Johns Hopkins Center for Civil Society Studies states that, “America’s nonprofit sector employs the third largest workforce of any of the 18 industries into which statistical authorities divide the American economy. What is more, it is adding employment at a rate that exceeds that of the country’s business sector. Yet, due to the way national economic data are kept, these facts are unknown to most policymakers—as well as to most leaders in the nonprofit sector itself.”

Behind the numbers

Many people assume that nonprofits are funded mostly by charitable giving. But fees for service account for almost half of nonprofit revenues. (In this sense, they are not unlike other kinds of businesses.) According to 2015 numbers from the National Council of Nonprofits, fees for service provide 47.5 percent of funding for nonprofits nationally, while government grants and contracts account for 32.5 percent, individual giving 7.8 percent, payouts from investments 4.8 percent, grants from foundations 3 percent, bequests 1.5 percent and grants from corporations 1 percent.

It’s difficult to measure the economic impact of the nonprofit sector in Charlottesville. There is economic activity itself, but there are also social benefits that have economic consequences. For example, an appointment at the Charlottesville Free Clinic prevents a costly visit to the ER. How do we qualify that very real but tricky to enumerate value?

The nonprofit sector’s contribution to employment in Charlottesville is enormous, due in large part to the university and the health system. According to a database compiled by the JHCCSS, nonprofits employ about 4,000 people in Albemarle and 3,900 in Charlottesville.

In 2011, the Arts & Economic Prosperity IV study found that the arts and culture industry in Charlottesville and Albemarle, which is largely but not exclusively nonprofit, generated $114.4 million in annual economic activity. As well, it resulted in $31.2 million in household income for local residents, $9.2 million in local and state government revenues and 1,921 equivalent full-time jobs.

To better understand the economic role of nonprofits, the Community Investment Collaborative provides a useful and concrete example of how an organization raises money and how that money benefits the economic life of the city. Founded six years ago, CIC helps under-resourced entrepreneurs start and grow small businesses by providing workshops, mentorship and microloans.

Aleen Carey. Photo: Sanjay Suchak

A seat at the table

We spoke with Aleen Carey, board chair of City Schoolyard Garden, to get an inside look at what it’s really like being on the board of a nonprofit.

What does a board chair at a nonprofit do? 

There are different types of boards, some are more hands-on and others function more as governing bodies. When I joined CSG, we were a small volunteer organization and did not have a huge staff, so board members literally got our hands dirty to help keep the gardens and the organization growing.  

As we’ve grown in scope and budget, we’ve added staff and our board has become more concentrated on governance. We focus on the strategy for CSG as a whole. The executive director manages the staff and the day-to-day execution of all of our programs and outreach. It’s a huge job! Board members fill in anywhere the staff needs our support to pull off events and engage with the students that we serve.

As the chair, I prepare an agenda for and lead our bi-monthly board meetings. I also sit on the executive committee with the chairs of our individual committees, which include philanthropy, governance and finance. I collaborate constantly with the executive director to ensure she has everything she needs to be effective.

I also volunteer my time with the kids in the garden. I am not a green thumb, but it’s fun to interact with the students. We work to offer the kids positive experiences growing their own food, learning about the land and becoming strong leaders, but when I spend time with them, I’m the one who learns. 

Why do you do it? 

When I retired from the classroom five years ago, a friend suggested I join the CSG board to maintain the positive relationships with students that had made my teaching career so fulfilling. 

I’m so very proud of what this organization has done and what it means for our students and their families. Students learn about plants, agriculture and food, but they also gain valuable knowledge about themselves and their place in their community. I’ve helped first-graders plant peas each spring as the slaves did at Monticello. I’ve been led on intricate garden tours by fourth-graders who know every inch of plot they planted. I’ve observed, in absolute awe, as middle and high school students address the Charlottesville School Board. Those are just a few of the moments that have filled my heart over the years.

Thirty-five percent of CIC’s operating budget comes from individuals, 22 percent from local and regional foundations, 21 percent from corporate support from area banks and businesses, 16 percent from local and state government and 6 percent from earned revenue.

Since its founding, the CIC has worked with 278 entrepreneurs who developed 267 businesses, of which 155 were startups and 112 were existing businesses. These businesses have created 131 new full-time equivalent jobs, 120 of which still exist. CIC has made 42 microloans totaling approximately $380,000.

“CIC businesses have generated nearly $6.5 million in wages from new jobs created, a return of investment of $4.84 for every dollar CIC has spent,” says Executive Director Stephen Davis. “This is just the economic impact from wages. We conservatively estimate that new businesses have generated over $15 million in economic activity since CIC launched.”

Stephen Davis. Photo: Sanjay Suchak

Davis says that the impact of CIC goes beyond the hard numbers. “I would say our impact is in helping individuals build stronger businesses, and thus livelihoods for their families,” says Davis. “We have individuals from different educational, socioeconomic and racial backgrounds working together to pursue their dreams. While we hope their businesses are successful, the impact of these relationships from different parts of our community and region far outlast and outweigh anything we could measure.”

The Albemarle Housing Improvement Program is a nonprofit that delivers critical home services, from emergency repairs to major housing rehabilitations, to individuals and families in Charlottesville and Albemarle who don’t have the resources to do them on their own.

“In fiscal year 2017, AHIP reinvested $1,579,209 in local business through the purchase of goods and services,” says AHIP Executive Director Jennifer Jacobs. “Most of this, about 70 percent, were local supply houses and subcontractors. Most of the funds we raise go right back out into the community in the forms of goods and services that transform into home repairs for our neighbors.” AHIP has 30 employees, which includes three construction crews who in 2017 helped 266 people in 123 households.

Though nonprofits that provide social services often have a more difficult task in quantifying their economic contribution, their work often saves a significant amount of public money while helping build a more productive workforce, both now and in the future.

Piedmont CASA (Court Appointed Special Advocates) provides trained volunteers and professional staff who advocate for the best interests of abused and neglected children and youth. “Research shows that kids with CASA volunteers spend less time in foster care, which saves local, state and federal dollars,” says Piedmont CASA President Alicia Lenahan. “Research also shows that a meaningful relationship with at least one supportive adult can make the difference in the life of a victimized child. That can help break the cycle of abuse and neglect.”

The work of Piedmont CASA, says its president, Alicia Lenahan, helps save local, state and federal dollars by helping kids spend less time in foster care. Photo: Sanjay Suchak

Making connections

The CFA Institute, the global association of investment professionals that sets the standard for professional excellence and credentials, is a not-for-profit organization that started in Charlottesville 50 years ago as a two-person office in Monroe Hall. Now, it employs 600 people and has eight offices around the globe, though it is headquartered here in a former Martha Jefferson Hospital building. In 2016, the CFA Institute generated $261 million in the region.

The CFA Institute has launched strategic partnerships with local nonprofits including the Senior Center, Habitat for Humanity and Charlottesville High School, to help improve the financial health of the community. It also works with the Center for Nonprofit Excellence to promote financial best practices to help nonprofits grow and be more financially stable.

Tech Dynamism is a local technology consulting firm that often provides services for nonprofits. “Our company was founded to serve the communities we live in. Our work with nonprofits aligns with that mission,” says Dave Alley, manager of business development at Tech Dynamism. The company worked to develop the N2Work tool, which helps job seekers find employers and the resources they need to successfully find and maintain employment, with the Charlottesville Works Initiative and Piedmont Virginia Community College. “N2Work is a mobile-friendly platform enabling employers to create job postings and peers to guide job seekers through a dynamic assessment linking job seekers with resource providers,” says Alley. Helping people find, and keep, jobs helps the economy grow. “A rising tide does truly lift all boats,” says Alley.

In an article in The Chronicle of Philanthropy, Sean Stannard-Stockton argues that nonprofits diversify the economy in important ways. During the last recession, when private companies were cutting jobs, nonprofits actually increased employment. Nonprofit employment is often counter cyclical to the for-profit sector because when the economy is up, for-profit business is up, but when the economy is down, there is more unemployment and more community need to which nonprofits must respond.

Stannard-Stockton suggests that there is only one meaningful difference between for-profit businesses and nonprofits. “When a nonprofit operates, it creates financial value in a very similar way [to a for-profit company],” he writes. “It also employs people and acquires goods and services from other companies. This financial value adds to economic growth and advances standards of living in an identical manner to for-profit activity. The only significant difference is that nonprofits reinvest all of their financial surplus back into their organizations.” Whereas for-profit businesses give some of the surplus to owners or investors.

Nardi sees another difference. “It’s a difference of mission,” she says. “One is motivated primarily by profit and the other is motivated by social good.”

Making an impact

The exact number of nonprofits in Charlottesville is hard to pin down. The CNE has 257 members, but not every area nonprofit chooses to be a member. Some are big. Some are small. They serve different demographics and many kinds of needs. Their funding models vary, as do their economic impact. Here are 10 that reflect the diversity of nonprofits in our town.

On Our Own Charlottesville

What does it do? 

On Our Own offers free peer support services and evidence-based therapeutic intervention for persons with mental health challenges and/or substance use disorders. “Our mission is to provide mutual support, self-help, advocacy, education, information and referral services,” says Executive Director Erin Tucker. 

How about money? 

Staff and volunteers see 30 to 50 people per day, six days a week. “Our services are free to our members, which is helpful so that folks can access mental health services quickly,” says Tucker. 

Charlottesville Community Bikes

What does it do? 

A nonprofit bicycle shop that works to promote environmentally sound transportation, recycle bicycles and make cycling accessible. Programs include open shop time—when people can fix their own bikes with help from experts—bicycle maintenance and repair classes, a kids’ bike rodeo and adult education. 

How about money? 

“Between adults and kids, we give away over 150 bikes per year,” says Executive Director Melissa Wender. The nonprofit relies on donations—sometimes money, other times used bikes and bike parts. 

City of Promise

What does it do? 

Serving Westhaven, 10th & Page and Starr Hill neighborhoods, City of Promise focuses on the potential of each individual it serves and works to provide support so that potential can be realized, despite obstacles. 

How about money? 

The organization serves 175 to 300 children and young people each year. “We rely upon individual donations and foundation grants to fund our programs, says Executive Director Denise Johnson. “Most of this support is local, but after August 12, City of Promise received donations from across the state and around the country.”

Wild Virginia 

What does it do? 

Works to empower citizens to take action to protect Virginia’s wild forests and waters. The George Washington National Forest is a source of water to both the James and Potomac rivers. 

How about money? 

278 volunteers and 503 members. “We fundraise by signing up paid members and are grateful for ongoing grant support,” says Executive Director Misty Boos. “Also, each spring we host the Wild and Scenic Film Festival, three nights of inspiring environmental films.”

African American Teaching Fellows

What does it do? 

Committed to recruiting, supporting, developing and retaining African-American teachers in local schools, AATF currently has 14 teachers in schools in Charlottesville City and Albemarle County, and a total of 21 teachers statewide,” says Executive Director Tamara Dias. 

How about money?  

“Research indicates that it costs about $20,000 to hire a new teacher due to teacher turnover in public schools. The 21 educators that we have statewide correlate to a savings of more than $400,000,” says Dias.

The Emergency Food Network

What does it do? 

Provides food for three days of balanced meals, once a month, to individuals and families in Charlottesville and Albemarle. “Each month, we supply food to 116 seniors, 732 adults and 681 children, on average,” says Office Manager Cari Brown.

How about money? 

EFN is an all-volunteer organization, with no government or commercial support. This independence has allowed EFN to provide assistance with no questions asked other than place of residence—no income limitations, no work or reference requirements. 

Charlottesville Free Clinic

What does it do? 

Through a strong network of volunteer providers, the CFC provides physical, mental and oral health care to uninsured members of the community who would otherwise have no access to care. 

How about money? 

In 2017, the CFC saw 2,913 patients for 9,608 visits. The CFC used the skills of 673 volunteers to make this possible. More than $3 million in prescription medications were distributed at no cost to patients. The value of donated professional medical care is significant—close to $400,000 each year.

Allegheny Mountain Institute

What does it do?

Cultivate healthy communities through food and education. “The newly launched AMI Farm at Augusta Health is a joint venture of AMI and Augusta Health to raise awareness about the importance of healthy eating and sustainable growing practices,” says Executive Director Sue Erhardt.

How about money? 

Supported by a variety of sources, including grants, foundation support, fundraisers and produce sales. “We offer most of our workshops and community classes at no charge,” says Erhardt. “AMI purchases from many suppliers in the region to buy garden supplies, compost, animal feeds, equipment and more.”

Big Brothers Big Sisters of Central Blue Ridge

What does it do? 

Create and support positive, long-term mentoring relationships for youth facing adversity. Participants are between the ages of 6 and 18 and services are free. More than 70 percent of kids in the program say they have increased educational expectations, and a reduction in attitudes toward risky behavior such as smoking, drinking, and truancy.

What about money?

Each year, an average of 250 volunteers work one-on-one with a young person. “Each mentor commits to spending at least one hour a week, for a minimum of a year, with their Little,” says Executive Director Athena Gould. “That’s 91,250 hours of time invested in those that need us the most.”

Georgia’s Healing House  

What does it do? 

Provide a safe, therapeutic and structured home for women in the early stages of recovery from alcohol and drug addiction and mental health challenges. The 12-bed residence offers women support, accountability, mentoring and transitional services toward independent living. Since it opened in 2015, 79 women have been served. 

How about money? 

Many of the women served have been incarcerated or homeless. “The cost of residential substance abuse treatment typically averages between $400-500 per day,” says Heather Kellams, who does fundraising, community relations and programming. “The cost of being housed in the Albemarle County Regional Jail is $87.17 per day. Our cost is approximately $35 per day, which is cost effective for our community.”


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