The Economic Power of Non Profits in IL

As Illinois tries to resuscitate its economy, lawmakers should know that some of the state’s biggest job producers are the ones that don’t make any money.

That’s one lesson to emerge from new research that shows that Illinois’ nonprofit community represents the state’s fourth-largest employer, accounting for more than a half-million jobs. The study, conducted by Johns Hopkins University on behalf of Donors Forum, an association of grantmakers and nonprofits, finds that nonprofits support 517,600 jobs in Illinois, more than the number of workers in the transportation, construction, and real estate industries combined.

Considering that nonprofits exist to advance a mission rather than to amass money, these robust numbers might be unexpected. One thing is certain: They make the hardships nonprofits currently face in Illinois look inexcusable.

According to the study, the state’s nonprofit community accounted for $24.3 billion in wages during the past year, representing 8.7 percent of the state total payroll. That income is projected to yield $459 million in tax revenues for Illinois’ depleted coffers, as well as $2.3 billion in federal tax receipts.

These numbers suggest that if Illinois is going to protect its economic future, it should foster stability and growth among nonprofits. But just the opposite is happening. For instance, Illinois owes nearly $1 billion in overdue payments to nonprofits that provide critical human services for seniors, children, and people with disabilities.

These delinquent payments have caused nonprofits to trim services, shed employees, and assume debt just to keep the lights on. Consider the plight of Southstar Services, a 62-year-old organization that serves people with developmental disabilities in Chicago and the south suburbs.

The state is overdue in paying Southstar more than $1.4 million — 20 percent of its budget. So Southstar has reduced access to a summer camp, occupational therapy, and critical exercise programs. Southstar also had to slash jobs, freeze wages, and increase contributions for employee benefits.

This experience has been repeated countless times at nonprofits throughout Illinois, and it amounts to a significant loss of economic activity for the state. Though nonprofits are being hammered by the state’s budget crisis, some lawmakers are increasing the pressure on them. Proposals have surfaced in Springfield that would require already regulated nonprofits to adhere to redundant reporting requirements.

These trends suggest a culture in Springfield that doesn’t properly value the role nonprofits play in Illinois’ economy. Or perhaps too few lawmakers are aware of the facts: With nonprofits employing more than a half-million workers, policies that strain them have damaging repercussions throughout the economy.

We hope the Johns Hopkins study raises that consciousness, so we can work together to fuel an important job engine in Illinois. We urge lawmakers to:

* Build on the accomplishments of the government/nonprofit task force currently charged with streamlining contracting and lowering costs to nonprofits and taxpayers, and create a task force to address fair and timely payments.

* Create a nonprofit caucus to ensure that legislators are aware of the concerns of the nonprofit community.

* Extend state small business programs to small nonprofits because nonprofits create jobs, too.
The value of a stable nonprofit community transcends the economic benefits. We entrust nonprofits to perform a range of vital services, from providing care to our children and seniors, to advocating for our consumer and civil rights, to educating our minds and ministering to our spirits.

The viability of the nonprofit community is a matter of flesh and blood, as well as dollars and cents. For all of these reasons, we hope lawmakers recognize that nonprofits enrich our state in every way.

Valerie S. Lies is president and CEO of Donors Forum.