Photo by Dominic Hernandez
For a business model that’s not all about making big money, nonprofits are big business.
They are part of Virginia’s third-largest employment sector, accounting for 365,200 jobs, according to a 2012 study.
In the Richmond region, their numbers include multimillion-dollar operations, including the University of Richmond ($200 million in revenue), Goodwill of Central Virginia ($69.9 million in revenue) and the YMCA ($41.2 million in projected revenues). Nonprofits employ about 1 in 14 workers in Richmond, the Tri-Cities; and Chesterfield, Goochland, Hanover, Henrico and Powhatan counties, according to the study. They generate about $5,000 per capita each year in expenditures.
“The nonprofit sector plays a major role in [the economy], including wages for employees and the same kinds of business expenditures made by for-profit businesses,” says Nancy Stutts, director of nonprofit studies at the L. Douglas Wilder School of Government and Public Affairs at Virginia Commonwealth University.
They are often run by boards whose members are drawn from some of the elite for-profit traditional corporations in the city: Altria, Dominion Energy, WestRock Co. and Wells Fargo.
Unlike private sector concerns, much of what nonprofits do, and their finances, are open for review. We took advantage of those open records to get an idea of the impact of nonprofits on the Richmond area, and to gain a better understanding of how they operate, why they’re needed and what they mean to the communities they serve.
How to Assess a Nonprofit
There are hundreds of local nonprofit organizations and charities in the greater Richmond area in need of support, but how do you choose where to put your talent, time and dollars to work? Here’s some advice from Nancy Stutts, director of nonprofit studies for the L. Douglas Wilder School of Government and Public Affairs at Virginia Commonwealth University.
Do your homework. At a minimum, look at the organization’s IRS Form 990 and its online presence and see if its values align with yours.
Contact the organizations you are considering to see if there’s a time when you can tour their facilities and observe their programs.
At the very least, speak with someone who works for or volunteers with the nonprofit. —Lynda Firth Raines
How Nonprofits Work
Q: What is a nonprofit?
A: Most are public charities, but the category also includes private foundations, civic groups, chambers of commerce and social clubs, like country clubs. All churches are nonprofits, whether they register as nonprofits or not.
Q: What about funding?
A: Say you start a nonprofit food bank. Unlike a restaurant where you have paying customers, you have no direct payer market, just hungry families in need of your services. You have to find indirect payers to help fund your work. That generally entails donations or lining up public and private grants.
Q: What are the disadvantages of going the nonprofit route?
A: Fund-raising will be your greatest challenge and expense. Hiring the services of a grant writer can also be costly.
Q: How does a nonprofit differ from a traditional business?
A: Your finances are open to public inspection. The public may obtain copies of state and federal filings to learn about salaries and expenditures.
Q: What are the differences in the boards associated with a typical nonprofit?
A: A governing board leads an organization, setting policy and direction and providing financial oversight. A working board comprises governing board members who serve as unpaid staff. Junior boards are younger professionals who help the nonprofit through volunteer work and fundraising activities.
Sources: Nancy Stutts, L. Douglas Wilder School of Government and Public Affairs at Virginia Commonwealth University; The Foundation Center’s GrantSpace
Nonprofit Spotlight: Art for the Journey
Photo courtesy Art for the Journey
Founder Mark Hierholzer combines his passion for art with his background as a mental health professional through this group, which he says is dedicated to promoting "the well-being and healing of children and adults through creative expression.” Art for the Journey focuses on people who otherwise have few opportunities to engage in the arts, such as people in prison or those facing financial hardships. —Stuart DuBreuil
