The Business of Nonprofits

Nonprofits answer the call every time our community needs help. Their influence is a synergistic combination of philanthropic bravado and strength, advocacy for social justice, and direct support. Our nonprofits are a critical backbone in the healing, monitoring and management of humankind.

Most people don’t realize how important nonprofits are as employers, innovators, and critical businesses in our regional infrastructure. Yes, businesses. The dollars they attract and earn circulate in our local economy in the form of wages, taxes, and the purchase of goods and services. Nonprofits help to reduce the cost of government resources, saving taxpayers. And nonprofits restore our environment, teach our children, minister to those suffering, train our workforce, treat people and heal families. In doing so, nonprofits bring people into jobs, help people stay out of prison, provide permanent housing, and improve our quality of life. Their impact builds our economy along with building lives.

Nonprofits across San Joaquin County represent some of our largest businesses, comparable to our for-profit sector in job creation, budget size, influence and impact. And while we might be OK with one fewer coffee shop or one less box store, it is hard to imagine a community without a foodbank, without a homeless shelter, without substance abuse and mental health treatment agencies or those preventing child abuse.

Instead of shareholders motivated to profit, our nonprofit businesses are owned by us, the public, and the dividend they pay is in social good. And we couldn’t thrive as a regional economy without them. In California, our nonprofit sector is the 4th largest employer and pays more than $37 billion in taxes annually. In the San Joaquin Valley, there are over 4,100 nonprofits with assets totaling $4.4 billion, generating over $4 billion in income. Human Services and Education nonprofits are the most numerous. Just like our traditional business sector, nonprofits range from small to huge and bring with them impact that reaches all of us.

Take, for instance, one local nonprofit agency: Community Partnership for Families of SJ County. In 2019, CPFSJ trained 80 volunteers to help 2,000 low-income families file their federal and state income tax returns. The result: over $2.1 million in earned income tax credit dollars were paid out – money that circulated in our local businesses and was deposited in our local banks. CPFSJ’s work in free tax preparation over the past 17 years has helped over 65,000 families and brought $180 million to our local economy. And that’s just one organization. 

COVID-19 interrupted the volunteer pools who support nonprofits and the ways in which nonprofits serve their missions. Many have pivoted to virtual service delivery; others have donned PPE and continue to meet our vulnerable neighbors in person with lifesaving care. As essential businesses, their work continues despite the pandemic and the risks it brings. Their work is reducing generational poverty, defying the odds in restoring lives and ecosystems, and fighting to dismantle institutional racism. They adapt, pivot and succeed even in the face of persistent roadblocks.

The result of their efforts benefits all of us. And as a result, our nonprofit sector deserves our support: in cash donations, the transfer of stock and property assets, in-kind support, volunteer hours, and referrals. Our nonprofit sector makes a business case for your support, along with a philanthropic case, and it is our job to show up for our nonprofit sector and invite them to the table where economic decisions are being made.