Report on the Alaska Nonprofit Economy
Executive Summary
February, 2007
A study describing the significant impact of the charitable nonprofit sector
in Alaska’s economy, presented by The Foraker Group and compiled by the
University of Alaska Anchorage Institute of Social and Economic Research
2
A STATEWIDE ANALYSIS
The “Alaska Nonprofit Economy Report: 2006” is the first comprehensive examination of the impact of the
The nonprofit sector is comprised of those non-governmental
charitable nonprofit sector on Alaska’s economy. The report was commissioned by The Foraker Group, a
organizations, commonly known as 501c corporations, or
nonprofit assistance organization providing professional services, education and training, and organizational
nonprofits, that are exempt from the federal corporate income
development for Alaska’s nonprofit sector, and partner to government, tribal and funding organizations.
The key findings of this report are described in detail within
THE FORAKER GROUP AND NONPROFIT
the body of this Executive Summary, and are summarized
SUSTAINABILITY
below:
The Foraker Group’s primary mission is to strengthen Alaska
The nonprofit sector is a major part of the state’s
economy.
nonprofits by helping them build sustainability, as outlined
in its “Model of Nonprofit Sustainability.” The work of The
Foraker Group is based on its belief that sustainability is the
The sector makes significant expenditures in the
state, especially Alaska’s public charities.
key to building a thriving nonprofit sector in Alaska.
The sector provides a growing employment base
across the state.
sustainability is a function of four integrated factors:
Alaska nonprofits are overly dependent on federal
government dollars.
Individual giving in Alaska is the lowest in the nation.
For the nonprofit sector to remain healthy, and
be able to continue its contribution to the state’s
economy, nonprofits must become sustainable.
According to The Foraker Group’s model, nonprofit
There are 7.5 nonprofits per 1,000
people in Alaska, compared to 5.1 per
1,000 nationally. Roughly
one nonprofit exists for
every 110 Alaskans.
the sustainability of Alaska’s nonprofits is to fully understand
the place – and the impact – of the sector in the state’s
economy.
The Foraker Group and researchers from the University
of Alaska Anchorage, Institute of Social and Economic
Research (ISER) analyzed data covering the charitable
nonprofit sector overall, as well as employment, wages, and
economic impact. The data covers the year 2004, the most
recent year for which complete information is available. This
summary represents the highlights of our findings, taken
from the full version of the report, which is available at
www.forakergroup.org.
corner of Alaska, in over 137 communities. That’s more
per capita than any other state, with 7.5 nonprofits per
1,000, compared to 5.1 per 1,000 nationally. Based on
2006 population estimates (660,000), one nonprofit exists
for every 110 Alaskans. One reason for this is the wide
distribution of population across the state, and the need
to create nonprofits to independently represent and serve
these small, dispersed populations.
Nonprofit organizations in Alaska spent nearly $3.5 billion
in 2004.
In 2004, 4,765 nonprofits were registered with the IRS in
Alaska. The total of 6,000 is reached when these factors
are considered: (1) some are registered in other states,
but operate in Alaska; (2) some are not required to register
Unrestricted Dollars – dollars, primarily from earned
income or individual charitable giving, that nonprofits
use to build financial resilience and perform
their missions; and
theoretical recipe for sustainability. A critical step in building
www.forakergroup.org
Roughly 6,000 nonprofit organizations operate in every
Human Capacity – adequate human resources, both
in quality and quantity, along with staff/board balance;
The Foraker Group considers its model to be a broad,
The full version of
the report is available at
tax. Alaska’s nonprofit sector is large and diverse.
Focus – a clear and succinct understanding of the
origins of organizational purpose and values coupled
with an equally clear articulation of future goals and
outcomes;
Complimentary Collaborations – working with other
nonprofits and public and private institutions in
effective collaborations.
PAGE
how many and how big
Alaska’s nonprofits are a critical part of the state’s social and economic fabric. As such they are an
important component of a vibrant economy and of healthy communities.
with the IRS because they have annual revenues less
than $25,000; or (3) some are one of approximately 1,200
religious organizations of which 600 have chosen not to
register with the IRS.
NUMBER OF REGISTERED ALASKA
NONPROFITS IN 2004
TOTAL
4,765
Charitable Organizations (501c3)
3,202
Public Charities
Private Foundations
Other Tax Exempt 501c
3,055
147
1,563
Source: National Center for Charitable Statistics.
Note: Excludes about 600 of the approximately 1,200
churches not required to register with the IRS.
This report focused on the registered nonprofits operating
in Alaska, including those larger organizations registered in
other states; it excluded all churches, but not church-related
social service organizations.
0
100
200
300
400
500
>$100 Million
$10-$100 Million
$100 Thousand - $1 Million
40%
<$10 Thousand
comprised of either charitable 501(c)3 organizations or civic
leagues and social welfare 501(c)4 organizations. Within the
501(c)3 category, most are public charities; among public
charities, most are social service organizations, followed in
order by arts/culture, health organizations, education, and
civic organizations.
Most public charities are small, with budgets of less than
$1 million, and nearly half have budgets under $100,000.
501(c)3 public charities account for nearly $2.5 billion in
annual expenditures.
While registered charitable organizations operate in virtually
every Alaska community, the vast majority – nearly threequarters – are in Alaska’s urban centers of Anchorage,
Fairbanks, Juneau, Matanuska-Susitna Valley, and the Kenai
Peninsula. Within the urban areas, most are in Anchorage
and Fairbanks, with the remainder in Alaska’s rural areas.
Approximately 15% are in more accessible rural areas, such
as Sitka, Ketchikan, Haines, and Denali, whereas close to
8% are in Alaska’s more remote rural areas – Nome, Bethel,
Aleutian Island communities, and other small villages.
Although most are located in Anchorage, the numbers are
deceiving because many organizations located there operate
Most of the public charities in Alaska have
expenditures between $10,000 and $1 million, with
approximately 150 expending more than $1 million
but less than $10 million, and a few with less than
$10,000 in expenses.
The five largest public charities have annual
Nonprofit organizations are an important, consistent and
health
social service
civic
education
arts/culture
dynamic part of Alaska’s diverse economy, as demonstrated
by overall nonprofit expenditures (including payroll), assets
and employment. While the direct impact is obvious, the
indirect impact on the Alaska economy – as demonstrated
20%
0%
Most of Alaska’s nonprofit sector (roughly three-quarters) is
REVENUE, EXPENDITURES, ASSETS
80%
$1-$10 Million
$10-$100 Thousand
4
100%
60%
statewide. Other notable findings include the following:
nonprofit finances & economic impact
COMPOSITION OF ALASKA
PUBLIC CHARITIES
by a Nonprofit Economic Multiplier – is also significant.
Number (1,011)
Expenditures
($2.4 Billion)
PAGE
SIZE DISTRIBUTION OF ALASKA
PUBLIC CHARITIES (Expenditures)
Jobs (27K)
The statewide Nonprofit Economic Multiplier, based on
public charity spending in 2004 of over $2.4 billion, is
expenditures greater than $100 million. Thirty-six have
expenditures greater than $10 million; 188 have
expenditures greater than $1 million.
roughly 1.46 for payroll and 1.56 for employment. In other
words, every nonprofit payroll dollar translates to $1.46 in
total economic impact, and every nonprofit job translates
The largest 20 account for two-thirds of all
expenditures of public charities, while the largest 100
account for 88% of total expenditures.
into an additional 1.56 jobs. This multiplier highlights the
The three largest nonprofits in Alaska (Providence
Hospital, Alaska Native Health Consortium, and
Banner Health/Fairbanks Memorial Hospital-Denali
Center) account for over 32% of total nonprofit
expenditures.
to nonprofit sector revenue, expenditures and assets is
overall impact on all sectors as a result of nonprofit activity
throughout the state’s economy. Specific information related
presented on the next page.
The largest public charities are mostly hospitals and
Alaska Native health and social service nonprofits.
Because Native nonprofits are unique to Alaska,
it is useful to present their spending separate from other
public charities.
The largest Native nonprofits generated nearly
$1 billion of expenditures in 2004.
Public charities providing a broad range of social
services are the largest category in numbers and
the second largest in total expenditures. The top ten
largest public charities are hospitals and comprehensive
healthcare providers that serve Alaska Native
communities.
The largest public charities, accounting for about
two-thirds of total public charity expenditures (over
$1.3 billion), are health related. The majority of
non-government expenditures for health care in Alaska
are made by nonprofits.
Every nonprofit payroll dollar
translates to $1.46 in total
economic impact , and
every nonprofit job translates into an
additional 1.56 jobs.
nonprofit expenditures
TOTAL SERVICE-PROVIDED NONPROFIT
REVENUES IN 2004 (in millions)
member-serving nonprofits
$869.15 - 25%
While the amount of federal dollars going to
Alaska nonprofits is significant, other trends, and
the economic/political climate, suggest that fewer
federal dollars will be available in the future, and more
diversification in nonprofit incomes streams is necessary.
A majority of federal dollars contributed in Alaska go
to tribal organizations.
NONPROFIT EXPENDITURES: 2004
(in millions)
public charities (501c3)
$2,506.39 - 72%
civic leagues (501c4)
public charities (501c3)
$115.61 -3%
civic leagues (501c4)
$102.77 -3%
$1,400
Revenues of Alaska’s service-providing nonprofits
(excluding revenues of foundations and other funding
intermediaries which flow through to service providers)
were nearly $3.5 billion in 2004.
Of the total service provider revenue in 2004
(excluding the revenues of foundations and other
funding intermediaries), public charities accounted for
most of the total, at a little over $2.5 billion.
Of the $2.5 billion in revenue for public charities, the
vast majority comes from three sources: (1) earned
income, including fees, contracts and charges for
services, (2) government grants, and (3) individual,
corporate and foundation contributions. The breakdown
for those sources of incomes is shown below:
PRIMARY REVENUE FOR ALASKA
PUBLIC CHARITIES BY PERCENTAGE
contributions 9%
$79.90 - 2%
$1,600
earned income 34%
government grants 57%
In Alaska, government grants, particularly from the
federal government, account for the largest share of
revenues for public charities, providing $1 billion
annually. This excludes federal government payments
for services such as Medicaid and other funds that flow
through state government.
The total expenditures by funding intermediaries
in 2004 were nearly $60 million. The Rasmuson
Foundation was the largest in expenditures, with
$18 million, nearly $10 million more than the next
organization on the list.
$2,391.40 -71%
other (501c)
FEDERAL GRANTS TO NONPROFITS
IN ALASKA
member-serving
nonprofits
$822.12 -24%
Overall nonprofit expenditures were $3.4 billion in
2004, almost identical to revenues.
$1,200
$1,000
Other
Tribal
$800
$600
$400
$200
Within total spending, expenditures by public
charities in Alaska in 2004 were $2.4 billion, and total
revenue was just over $2.5 billion.
Of the top 10 civic organizations, fisheries-related
nonprofits account for $45,282,217 in expenditures.
$0
‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04
Source: Federal Assistance Award Data System (FAADS) and ISER.
Charitable contributions in Alaska totaled roughly
$260 million to nonprofits in 2004.
62% to 67% of those contributions came
from individuals, compared to 83% nationally.
• National studies suggest that the contributions of
people who don’t itemize are about 23% as large as
reported itemized contributions.
In 2006, a Boston University study reported that
Alaska ranked 51st among all states and the District of
Columbia in giving from households with annual income
over $200,000.
Based on The Foraker Group’s Model of
Sustainability, it is clear that Alaska nonprofits must
raise more charitable dollars from individuals. In order
to effectively change the charitable giving landscape,
nonprofit organizations must allocate appropriate
human and internal capacity to create an atmosphere
that encourages individual philanthropy. Board and staff
should emphasize clear accountability, communication
and transparency to donors as well as lead by example
in their own personal giving. Creating this organizational
change will take time and financial resources to achieve
and organizations should look for collaborative
opportunities with private and public partners and
other nonprofits that support and encourage their
systemic shift.
PAGE
nonprofit revenue
Organizations concerned with arts and culture tend
to be smaller than the other major public charity
categories – among that group the largest in
expenditures is the Alaska Native Heritage Center,
at close to $5 million.
Member-serving nonprofits generated expenditures
of $822 million in 2004. The largest are the utility
cooperatives, both electric and telephone, with
combined expenditures of $516 million. Most of the
others serve employee, business, professional or
social groups.
MEMBER-SERVING NONPROFITS
501(c)# Category
Total in AK
(c)12 Mutual Companies, Co-ops
24
(c) 9
Voluntary Employee’s
Beneficiary Societies
19
(c) 6
Business Leagues,
Chamber of Commerce
147
(c) 5
Labor, Agriculture Organization 81
(c)14 State-Chartered Credit Union
2
(c) 8
Fraternal Beneficiary Societies 31
(c)19 Post or Organization of
War Veterans
26
(c) 7
Social and Recreational Clubs 16
(c)10 Domestic Fraternal
Beneficiary Society
20
(c) 2
Title-Holding Companies
10
(c) 13 Cemetery Company
1
(c) 17 Supplemental Unemployment
Benefit Trusts
1
TOTAL
378
Source: NCCS CORE Files and ISER
Expenditures
$516,318,951
$153,957,065
$58,074,092
$50,461,450
$24,247,070
$7,745,205
$4,526,135
$3,705,871
$1,688,078
$828,905
$437,871
$127,905
$822,118,598
Among other funding intermediaries, the United
Ways in Anchorage and Fairbanks accounted for
$7.5 million in expenditures.
While this study did not determine whether all foundation/
funding intermediary expenditures remained in Alaska, the
mission for each of these organizations is to support Alaska
organizations.
nonprofit assets
ASSETS OF NONPROFITS IN 2003
(Million $)
TOTAL
Public Charities (501c3)
Funding Intermediaries (501c3)
Civic Leagues & Social Welfare (501c4)
Other 501c
$6,170.10
$2,399.70
$1,002.16
$276.94
$2,491.53
Source: NCCS CORE Files and ISER.
Total nonprofit assets at the end of 2003 – the most
recent year data was available – were $6.1 billion,
mostly divided between the public charities ($2.4 billion)
and other member-serving nonprofits ($2.5 billion).
Measured by either per-capita gross receipts or
per-capita assets, Alaska nonprofits tend to be much
smaller than the U.S. average; gross receipts of Alaska
nonprofits in 2004 were $1,683 compared to $4,266 for
the entire U.S.
Of the $2.4 billion in assets, public charity assets
were concentrated in health and human service
organizations.
196 reporting funding intermediaries are based in
Alaska, including family foundations like the
Rasmuson Foundation, corporate foundations like the
CIRI Foundation, and federated funders like the
United Way of Anchorage.
Total assets for funding intermediaries in Alaska
were over $535 million in 2004. The largest funding
intermediary – the Rasmuson Foundation – had
assets of over $428 million.
6
PAGE
employment & wages impact
Other studies – including The Foraker Group’s 2006 Benefits
More Alaskans per capita work for nonprofits than in the
Survey – show that while the sector employs 10.3% of the
nation as a whole. The percentage of the Alaska workforce
workforce in Alaska, there continues to be a shortage of
employed by nonprofits is a little over 10%, whereas the
health insurance for those workers. This is especially
national percentage is just over 7%. Even more significant,
important when one considers the fact that the nonprofit
while national growth in nonprofit sector jobs has been
employee population is often considered “less healthy”
steady, in Alaska it has been going up – from 7% of the total
actuarially, and therefore requiring more medical care and
workforce in 1990, to over 10% today.
treatment. While most of the nonprofit wages are paid in
urban areas, they are much more important to the state’s
As a share of employment, then, nonprofits are much more
rural economies, as measured by the nonprofit share of
important in Alaska than in the United States as a whole.
total regional employment. Due primarily to the importance
of health/social service organizations in the rural regional
EMPLOYMENT SHARES IN 2004
ALASKA
government 27.5%
centers, the share of nonprofit employment can be up to
twice as high as the state average.
Over the last 15 years nonprofit sector employment
numbers have grown significantly. Alaska nonprofits
employed 30,895 workers in 2004 – 10.3% of the total
Alaska workforce – compared to 17,093 in 1990, when
nonprofit workers comprised 7% of the total.
private nonprofit 10.3%
private for-profit 62.2%
U.S.
government 14.9%
private nonprofit 7.2%
private for-profit 77.9%
Source: U.S. Census Bureau, American Community Survey, Table S2408.
Since 2000, growth in the nonprofit workforce has continued
to outpace other sectors of the economy, growing five
times faster than private, for-profit employment. Similarly,
nonprofit payrolls are burgeoning. In 2004, the nonprofit
sector payroll was over $1.5 billion, paying for over 30,000
employees. Nonprofit compensation levels are lower than
the governmental sector, and most parts of the private
sectors, but on par with the for-profit service industry.
Between 1990 and 2000, nonprofit workers
increased by 52%, compared to 16% for the private
for-profit sector, and 4% for government. Since 2000,
growth in nonprofit workers has continued to outpace
the other sectors of the economy.
Public charities themselves employ 27,039
workers, or 90% of total employment in the sector.
Through a multiplier effect, nonprofit impact on
additional employment, from nonprofit worker spending
of payroll and nonprofit purchases from other
businesses, is an additional 15,027 jobs. These jobs
tend to be more concentrated in urban areas than the
public charity jobs themselves, which are more evenly
distributed across the state.
8
NONPROFIT WAGES
2004 WAGE RATE COMPARISON
Statewide, total employment (with multiplier)
attributable to the nonprofit sector is 43,458 with an
associated payroll of $1.519 billion.
The total direct payroll of the nonprofit sector
is $1.151 billion.
Nonprofits are most prevalent (compared to private
firms) in the healthcare and social services sectors
where 73% of employment is among nonprofit
organizations. The next sub-sectors in line – education
and arts/culture – are all much smaller in both payroll
and jobs.
The wage rate is higher in the healthcare sector than
in the other sectors.
PUBLIC CHARITY EMPLOYMENT DETAIL
TOTAL
Health
Social Services
Civic
Education
Arts/Culture
Payroll
(Million $)
$1,007.102
$636.049
$282.977
$18.773
$29.176
$16.531
Annual
Wage
$39,464
$31,786
$28,074
$29,084
$29,781
Employment
27,039
15,841
8,442
595
931
481
Source: NCCS CORE Files and ISER.
Among other nonprofits (non 501(c)3 and 501(c)4),
the largest payroll and employment is associated with
public utilities – electric and telephone – organized as
cooperatives. They also pay the highest average wage.
The wage rate in the private nonprofit sector is
comparable to that of the private service sector, and
varies among the different nonprofit categories. As
mentioned, the electric co-ops have relatively high
wage rates. The lowest wages are in the social
assistance category.
The private nonprofit wage rate in 2004, of $2,846
per month, was below that of the government and the
private for-profit sectors of the economy. However. it
was about equal to the average of the service producing component of the private for-profit sector,
$2,763.
Sector
Monthly
Annual
TOTAL
$3,218
$38,615
Government
$3,477
$41,719
Federal
$4,813
$57,759
State
$3,342
$40,104
Local
$2,955
$35,464
$3,171
$38,047
Goods producing
$4,683
$56,194
Service producing
$2,763
$33,160
$2,846
$34,154
Private For-Profit
Private Nonprofit
(service producing )
Source: Alaska Dept of Labor, Employment and Earnings data, ISER.
The largest nonprofit organizations are among the
largest overall employers in the state, and that
percentage is increasing. In 1994, 14 public charities
existed among the 100 largest private employers; that
number increased to 19 by 2005 and included two large
utility cooperatives.
The 10 largest public charity employers are directly
related to health or social service providers connected
to a regional health provider.
In 2000, at 9.2%, Alaska was ranked 10th in the
nation in concentration of nonprofits in total
employment. Vermont was the highest, at nearly 12%,
and Nevada the lowest at approximately 3%.
In Alaska, nonprofit employment increased 51.9%
between 1990 and 2000, while private for-profit
employment grew only 15.8% and government
employment by only 3.6%. In contrast, the nonprofit
sector employment grew 19.8% in the United States
while the private for-profit sector grew by 12.3% and
government by 7.7%.
The nonprofit share of employment has been
increasing in Alaska for at least the last 14 years,
while it has changed very little in the United States
as a whole.
TRENDS IN EMPLOYMENT SHARES:
ALASKA VS. UNITED STATES
ALASKA SHARES
U.S. AVERAGE SHARES
80%
10
The higher concentration of employment in the
nonprofit sector in Alaska is mirrored in the higher
concentration of nonprofit organizations per capita in
Alaska compared to the U.S. That pattern of high
density exists across all the major nonprofit categories
with the exception of foundations, where Alaska has
only half the U.S. average, based on population.
In 2000, 42.2% of the nonprofit employment was in
Anchorage. When combined with Fairbanks, Mat-Su
and Juneau, the number increases to nearly 78%.
Although the number of nonprofit workers is smaller
in the rural census areas than in urban Alaska, the
importance of nonprofit jobs is greater in rural areas, as
measured by the nonprofit share of total regional
employment. Due primarily to the importance of health
and social service organizations in the rural regional
centers, the share of nonprofit employment can be
twice as high as the state average.
As the first report of its kind, “The Foraker Group Report
on the Alaska Nonprofit Economy” clearly articulates one
This report reveals the impact of the nonprofit sector on
fact that heretofore has been purely anecdotal – that the
Alaska. At this point, however, the report is a “snapshot”
nonprofit sector has a significant impact on the Alaska
of that impact. It is necessary to further identify and track
economy. The key findings of the report are compelling:
important trends over time. To do this, The Foraker Group will
regularly update the benchmarks outlined in this summary.
THE NONPROFIT SECTOR IS A MAJOR PART OF
THE STATE’S ECONOMY – more than in many other
states. Alaska has approximately 6,000 nonprofit
organizations. That’s one nonprofit for every 110
people, more per capita than any other state in
the union.
THE SECTOR MAKES SIGNIFICANT
EXPENDITURES. Taken together, nonprofit
organizations in Alaska spent nearly $3.5 billion in 2005
– with the top three healthcare providers accounting for
one-third of that spending.
THE SECTOR PROVIDES A GROWING
EMPLOYMENT BASE. The number of jobs in the
sector has grown more quickly than in other parts of
the economy. The sector employs 10% of the state’s
workforce – approximately 30,000 employees.
NONPROFIT REVENUE COMES FROM THREE
PRIMARY SOURCES – fees, government, private
giving – with the federal government providing the
largest amount of funding at roughly $1 billion each
year. Trends suggest government funding will decrease,
making it necessary to increase funding diversity in
the future.
INDIVIDUAL GIVING IS THE LOWEST IN THE
NATION. Alaska ranks 51st behind all states and the
District of Columbia in giving from households making
over $200,000 annually.
PRIVATE FOR-PROFIT
70%
conclusion
DIRECTIONS FOR THE FUTURE
60%
50%
While the report is full of valuable information about the
sector, some areas are not covered – areas that should be
part of future inquiries – including:
More in-depth examination of individual philanthropic
giving activities among Alaskans
Comprehensive analysis of the impact of for-profit
charitable giving on the sector
A full analysis of how state dollars are directed into
the sector
Job retention and job satisfaction trends
Urban – rural migration of jobs within the sector
The impact of regional as opposed to both
community-level and state-level decision making
on nonprofit dynamics
A strong nonprofit sector is an important part of growing a
vibrant economy, building healthy Alaska communities,
and creating a dynamic state. For the sector to remain
healthy and continue its contribution to the state’s
economy, nonprofits must become sustainable. This will
be accomplished when organizations become more clearly
focused on their core purpose, have adequate human
capacity, raise enough unrestricted dollars to ensure
40%
financial resilience and support for their mission, and
30%
engage in complimentary collaborations.
GOVERNMENT
20%
To effectively change
10%
1990
PRIVATE NONPROFIT
2000
Source: U.S. Dept of Commerce, Bureau of the Census.
2004
PAGE
STATEWIDE EMPLOYMENT TRENDS
the
charitable giving landscape ,
organizations should look for collaborative
opportunities with private and public partners
and other nonprofits that support and
encourage their systemic shift.
For a full copy of the report, visit The Foraker Group’s
website at www.forakergroup.org
An chorage, Al aska
907 -743-1200 or 1-877-834-5003
ww w.f orakergroup.org