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The Economic Impact of Nonprofits in Westchester

The Economic Impact of Nonprofits in Westchester . The Wilson Center for Social Entrepreneurship, Pace University -In partnership with- The Business Council of Westchester November 8, 2007. The Growth of the Nonprofit Sector .

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The Economic Impact of Nonprofits in Westchester

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  1. The Economic Impact of Nonprofits in Westchester The Wilson Center for Social Entrepreneurship, Pace University -In partnership with- The Business Council of Westchester November 8, 2007

  2. The Growth of the Nonprofit Sector • From 2000 to 2007, the number of registered nonprofit organizations in Westchester County increased from 3,406 to 4,179, an increase of 23 percent.

  3. These 4,179 registered nonprofit organizations constitute 5.7% of the total number of nonprofits in NYS (73,597) • Note: The number of NYS-based nonprofits has increased 26% since 2001. So, Westchester roughly approximates state-wide growth of the nonprofit sector.

  4. Registered Public Charities • 2001 2,536 • 2007 3,176 • An increase of 25% • Registered Private Foundations • 2001 856 • 2007 994 • An increase of 16%

  5. Key Financials: • As of the first quarter of 2007, the reported total revenue of nonprofit organizations was over $5.9 billion and total assets of $8.1 billion (estimated)

  6. -Assets: • Public Charities • 2001 $4.9 Billion • 2007 $5.7 Billion • An Increase 16% • Private Foundations • 2001 $1.9 Billion • 2007 $2.4 Billion • An Increase 12%

  7. -Revenues (all sources) • Public Charities • 2001 $3.9 Billion • 2007 $4.5 Billion • Increase 15% • Private Foundations • 2001 $472 Million • 2007 $1.4 Billion • Increase 87% • (likely fueled by 911, Katrina, and asset/income growth of wealthy individuals/families).

  8. -Expenses and Liabilities • Public charities (2005) • $2.4 billion (estimated) of total liabilities which is an increase of 100,000 million since 2000. • Over $3.7 billion (estimated) of expenses which is an increase of 250,000 million since 2000. • Private Foundations, by nature, typically post low total expenses and have shown modest growth in these categories since 2000.

  9. Employment and Wage Figures • Westchester nonprofit organizations employed approximately 40,560 persons in 2006 (estimated from BLS employment categories) which is up from 35,107 from the year 2000; a 15% increase. • However, as a percentage of the total workforce, nonprofits constitute a little over 8% in 2006 which is the same percentage as in the year 2000.

  10. So, projected estimates of workforce breakdowns by sector are: • Nonprofit Sector 40,560 8% • Private Industry 382,000 79% • Government 61,000 12%

  11. Salary Levels In Nonprofit Fields Mean Median • Medical and Health care $90,160 $82,170 • Education Administrators $87,500 $81,340 • Various Public Health $40,672 $38,550 • Religious Related Occupations $36,907 $31,790 • Arts and Related professions $49,620 $36,780 • Community and social Services $41,030 $37,900

  12. Wage Structure • However, estimated mean annual income for all sectors fell from $43,915 as reported in 2000 to $42,912 as estimated in 2005, with nonprofit salaries typically lagging behind their public and private sector counterparts.

  13. Measuring Additional Economic Impact: The Multiplier Effect • According to the Federal Reserve bank of New York (Staff Report No. 241, 2006), the spending multiplier for this region is about 3.4 • Which means every dollar made/spent generates $3.40 in additional business activity in the region. • So, for instance, using the 2005 spending figure of nonprofits ($3.5 billion), the overall economic impact of this nonprofit spending would be in excess of $11.9 billion for the region.

  14. “Take Aways” • The Nonprofit sector in Westchester continues to grow in line with the statewide average. • Nonprofits constitute a significant source of economic activity in Westchester and employ a substantial percentage of the workforce. • As a whole nonprofits show good efficiency in their expense to revenue ratios and have enjoyed modest asset growth since 2000.

  15. Questions for Further Study? • Expenses • Wages • Operating Margins • Funding

  16. Data Collection and Analysis by: Farrokh Hormozi, Ph.D., Professor, Pace University hormozi@pace.edu Edited and Presented by: Brian J. Nickerson, Ph.D., Professor, Executive Director, Wilson Center at Pace University bnickerson@pace.edu

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