ASU Lodestar Center


Abstract art photo, featuring warm colors.

Nonprofits have big economic footprint

March 11, 2016 | Abbie Gripman, Community Editor | Arizona Daily Sun

At a March 7 gathering at the Coconino Center for the Arts, representatives of dozens of local nonprofits learned that they’re much more than warm and fuzzy do-gooders, they’re also part of a significant economic footprint.

They were gathered to hear the findings of a new study on the economic impact of nonprofits. Backed by the Arizona Community Foundation and others, the study found that nonprofit organizations statewide are responsible for 8 percent of the Gross State Product and are the state’s fifth largest employer.

Steve Peru, president and CEO of United Way of Northern Arizona, welcomed the assembly. The study, he said, provides a wealth of information.

“We’re hearing it today but we’ve got to do something with it,” Peru said of the study’s findings.

Richard Tollefson of the Phoenix Philanthropy Group, Tony Evans of the L. William Seidman Research Institute and Robert Ashcraft of ASU Lodestar came to Flagstaff to present the findings. Tollefson said they are touring the state to deliver the information.

“We really hope it will change some of your perceptions about the role of nonprofits,” he said.

The study used information from 2014 to answer the question, “What is the economic impact of Arizona’s nonprofit sector?” Researchers used financial data supplied by the Arizona Department of Revenue and survey data to build a picture of the economic footprint of the state’s nonprofits.

Evans said they gathered information from 3,000 of the state’s nonprofit organizations representing healthcare, arts, culture, social services and more. The findings, he said, are conservative, and clearly point to nonprofits as a strong contributor to economic development in Arizona.

The study considered the direct effects of nonprofits such as employment and taxes, the indirect effects such as suppliers and the induced effect that includes staff spending. Overall, they found that the nonprofit sector contributes $22.4 billion annually to the state’s economy.

John Tannous, executive director of the Flagstaff Arts Council, brought the conversation from a state to a local level. He said nonprofits need to use the study’s findings to promote their organizations. The study, he said, gives them tools to communicate with government officials and potential supporters.

Ali Applin of Senestech told the audience that businesses such as hers depend on strong communities to attract the best employees.

“Nonprofits help sell the community,” she said.

Rich Bowen of ECONA and NAU echoed her sentiment.

“At the end of the day,” he said, “what brings (businesses) to Flagstaff is the broader economic vitality.” Nonprofits, he said, are a critical component of that economic vitality.

After the presentations and panel discussions, Debra Harris, board president of the Southside Community Association, said that for small nonprofits like hers, the far-reaching study provided important information that they couldn’t otherwise afford to gather.

The Southside Community Association operates the Murdoch Community Center. “We’re a very small social profit,” she said, using the alternate term to nonprofit. “None of our board members are paid but we pay four NAU students to staff the (Murdoch) Center 40 hours a week.”

The study, she said, will help her and other organizations tell the story that their impact is not just social, it’s economic.


Originally published in the Arizona Daily Sun here.