11 minute read
NONPROFITS
The Mission-Driven Economy
The crucial role nonprofits play in Alaska
The 5,620 nonprofits in Alaska range from sports leagues and outdoor recreation organizations to rural and urban hospitals, clinics, and community health centers. Nonprofits provide housing— for seniors, individuals with disabilities, or low-income populations—as well as childcare services, youth programs, and vocational training. Civic and social clubs count as nonprofits, and so do colleges, universities, labor unions, and volunteer associations.
According to Alaska’s Nonprofit Sector: Generating Economic Impact, a report released by The Foraker Group in December 2021, Alaska’s nonprofits not only provide essential services but also create jobs, directly employing more than 38,105 Alaskans. Those jobs, as well as the goods and services that nonprofits require, in turn sustain another 57,922 jobs in the state. Altogether, these jobs translate into $4.1 billion in direct, indirect, and induced wages generated by the nonprofit sector. Seven previous reports have reached similar conclusions.
“Every three years we put together this report, and every time we’re showing how truly important Alaska nonprofits are to the economy,” says Laurie Wolf, president and CEO of The Foraker Group, itself a 501(c) (3) nonprofit with the mission of supporting and promoting all other nonprofits. “Depending on the community, nonprofits on average employ 13 percent of the workforce— and in some communities, it can be up to 50 percent.”
Wolf notes that nonprofits are especially important in rural Alaska. “We have no county system of government, so nonprofits fill the roles that governments would play in any other state,” she says. “They provide direct services—they are the utility company, the telephone company, the fire department, the libraries in many communities across Alaska.”
For example, healthcare is often the largest employer in any given region, and the largest hospitals are operated by nonprofits. In the villages, social and human services are generally provided through nonprofits, often associated with tribal entities or Alaska Native regional or village corporations. Nearly one quarter of non-government jobs are tied to nonprofits through indirect and induced effects.
“While many Alaskans think that it’s private industry or government doing the work, nonprofits are actually the backbone of the state,” says Wolf. “We can’t thrive without nonprofits, government, and industry all playing a role and working together.”
United for Social Welfare
Buddy Custard, president and CEO of Alaska Chaduxˆ Network, has a relatively small staff, but the work they do in oil spill prevention and response has a local and global impact.
“We have a staff of sixteen based in different communities in Alaska, and our budget is about $10 million annually,” says Custard. “Despite our size, we support more than 630 companies who rely on our services to deliver fuel and goods to Alaska and the West Coast: one-third of which include European market shipping companies, one-third are based in Asia, and one-third are US shipping companies and facilities, including
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Kuskokwim.com
Laurie Wolf, President and CEO, The Foraker Group
120 facilities that store or transport oil in Alaska.”
In addition to staff, Chaduxˆ relies on many contractors to serve its seventeen response hubs throughout the state. “We have agreements in all of these communities, and we also visit these sites a number of times each year, spending money on travel, lodging, and more, which creates even more of an economic impact in remote communities,” Custard says, adding that the nonprofit also employs Alaska legal, public relations, and marketing firms.
“We contract with incident response professionals to deal with oil spill response, including the Alaska SeaLife Center. And in communities where there is a large fishing vessel population, we pay a retainer to vessel operators in the areas we serve to keep their crews trained so that they can assist when needed,” he adds. “I’m a big believer in leveraging our resources and the finances that we collect to support other Alaska organizations and communities who support us… It’s the Alaskan way.”
As an industry-funded 501(c)(4) nonprofit, Alaska Chaduxˆ Network reinvests in its own programs, with 81 percent of its funds in 2021 going back into compliance, oil spill readiness, and prevention programs and the remaining funds used to support program administration. The nonprofit invested in creating the Pacific Rim Response Center in Kodiak and is also a main funder of the Marine Exchange of Alaska, located in Juneau, a separate nonprofit that tracks and monitors all vessels in the state.
“Alaska is very dependent on the sea lanes, and our communities get most of our goods and commodities from ships. Much of our economy is based on the fishing industry, and all of this could be lost without nonprofits providing costeffective services,” says Custard. “As a nonprofit, our goal is not to bring in revenues for shareholders but to protect Alaska’s environment with a safe marine transportation system.”
Big Help
twenty-two people through its two interconnected 501(c)(3)s. In addition to roughly $1.4 million in annual payroll expenses, the organization puts money back into the community through its use of local vendors, such as accounting and fundraising firms, and by working with local businesses, including Alaska Native corporations, on programs like its Native American Mentoring Initiative.
Perhaps more important, the organization has a huge impact on local youth.
“Our goal is to match youth, which we call ‘Littles,’ with mentors, called ‘Bigs,’ to empower every young person to graduate from high school and to create a path for the future,” says CEO Jillian Richardson. Bigs are much more than playmates for Littles; they boost youth into the adult world. “Some will be ready for the workforce, some will enlist, and some will go on to get secondary education—no matter where they go, we are there to support them in reaching their goals,” Richardson explains. The individual benefits then ripple across society.
“In the long term, when our youth are thriving, the community experiences this in their upward social and economic mobility,” she says. “Some of the outcomes that we measure—which include educational attainment, social/ emotional learning, social connections, and reduction in risky behaviors—are all associated with future impacts and connected with success in life. When kids feel a sense of belonging, they ultimately thrive.”
With staff located across the state, BBBSAK interacts with approximately 400 youth every year. Without the support of this nonprofit, these children—as well as future generations— would feel the loss.
“Maybe one person doesn’t make it into college because there’s not a mentor to support them as they’re filling out the application,” says Richardson. “Or one child never realizes her dreams because she didn’t meet that mentor that inspired her to explore the arts. Even though we have the bigger impact of graduation rates and future planning, it’s these intangible one-on-one stories that are at the heart of our mission.”
Just like for-profit businesses, Alaska nonprofits had a tough time dealing with the COVID-19 pandemic and the resulting Great Resignation.
“Turnover is definitely the number one problem,” says Richardson, “though we’re also in a volunteer recruitment crisis.”
While nonprofits lost fewer jobs overall than other sectors, this number doesn’t account for the loss of volunteers as well as a loss of contracted labor.
“While the state lost 8 percent of jobs during this time, nonprofits lost 4 percent, making nonprofits a stabilizing force in the economy because they lost less overall jobs in the state,” says Wolf. “We don’t have the newest numbers after The Great Resignation to know what it looks like now, but it’s obvious that human services organizations and healthcare facilities—and truly all nonprofits that employ staff—are not immune from the workforce shortages.” Job losses were highest in the social services sector, followed by performing
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Alaska Chaduxˆ Network
Laurie Wolf, President and CEO, The Foraker Group
arts and spectator sports. Nonprofit financial services, educational services, museums and historical sites, and the accommodation and food services industries also lost jobs, though gains were seen in nonprofit utilities, information, and healthcare.
“The pandemic hit in two distinct ways. When you talk about health and human services, for example, nonprofits saw a tripling or quadrupling of demand for services overnight while at same time losing volunteers and having to live within a financial framework of grants and contracts that were already negotiated,” says Wolf. “How do you quadruple an organization without the financial and human resources to do it?”
While some nonprofits were overwhelmed, others shut their doors, such as arts and cultural organizations and animal-oriented organizations. “They lost all of their revenue and had to furlough staff, even while having to maintain their art and artifacts or attend to the health and welfare of animals,” Wolf explains. “It’s hard to rebound and re-emerge into the workforce, which is incredibly competitive, with no revenue to compete in the marketplace.”
To combat these losses, nonprofits need to look at how they’ve done business in the past and focus on what needs to change, according to Richardson.
“Organizations need to adjust to the needs of the workforce, which includes showing more flexibility and emphasizing employees as people first,” she says. “There isn’t the expectation of instant availability anymore; now it’s about getting the job done and being more collaborative. It’s less about rigidity and an employee showing up at a specific time or punitive responses when people are struggling in the workplace. The culture has shifted.”
Richardson, who joined BBBSAK during the pandemic, developed a compensation philosophy that allows the organization to be competitive with the for-profit sector whenever possible, providing wages 90 percent or above the going rate. “At the time, that was very progressive for our organization,” she says, “but while wages is a big one, it’s not the whole piece.”
BBBSAK is now analyzing its benefits package as well. “The simple fact that we offer healthcare is not really good enough,” says Richardson. “The Silver Plan that we have doesn’t work for
families, so we need to figure out how to afford to pay for full family coverage. We’re looking at where we are financially, trying to do the best we can with what we have.”
Because many nonprofits are grant- and donor-funded, money often must be raised to offset new expenses, which became even more difficult when social events and fundraisers were cancelled.
“Not only did this impact us directly, but we also indirectly lost the connections to our donors that we’d spent the last three years building,” says Richardson. “We’re just now starting to dabble in in-person receptions to see if this is something we can move toward.”
Richardson is also hoping that more people will step up to mentor youth, and the organization even makes matches between Bigs and Littles based on COVID-19 safety preferences. In addition, the organization is partnering with corporations to grow its pool of volunteers.
“As a sector, the existing way so many do business is not going to get us to where we need to go,” says Wolf. “That’s why we’re asking the government, business, and philanthropic leaders to reassess grant agreements, government contracts, and philanthropy arrangements to allow nonprofits more room to adapt and be competitive in the marketplace for employees, while also re-envisioning how the mission work gets done.”
Wolf is hoping that volunteers are ready to reconnect after COVID-19. “And nonprofits themselves need to be involved in how we move forward in communities, especially with the infrastructure money coming into Alaska. We need to ensure that we are at the decision-making table because Alaska works better when that happens.”
To meet the new CEO of Providence Alaska, the state's largest nonprofit by number of Alaska employees, choose page 148. To learn which nonprofit Goldbelt CEO McHugh Pierre is passionate about, choose page 152.
