Jennifer Hutchins, Executive Director of the Maine Association of Nonprofits
Updated: September 23, 2019
Commentary
Maine’s economy needs nonprofits
By Jennifer Hutchins
When talking about a strong Maine economy, industries like marine resources, tourism and biotech justifiably top the list. Yet, the pursuit of a prosperous Maine requires deeper understanding of how communities thrive, including the wide variety of roles nonprofits play in sustaining and enriching community health and vibrancy.
Every day, nonprofits support Maine’s future by focusing on early care and education and connecting youth with service and work opportunities. They promote economic development by counseling and investing in entrepreneurs and small businesses. They provide an essential safety net of physical and mental health services for those in need, and they enrich our natural and built environments through environmental preservation and the arts.
In a 2019 report, “Adding Up Impact: Maine Nonprofits at Work,” the Maine Association of Nonprofits outlines the economic impact of Maine’s nearly 3,000 reporting public charities, which includes 501(c)3 organizations that are registered in Maine, file tax returns and operate for public-benefit purposes. Public charities are only part of the nonprofit sector, making up 73% of the total number of tax-exempt organizations in Maine.
Public charities employ over 98,000 people, or one in six Maine workers, making this sector a more significant employer than nearly all other industries in the state. Some 37% work in hospitals, 30% work in other health care and social assistance organizations and 18% work in education. Other types of nonprofit employment include professional services, environmental protection and the arts.
Maine nonprofits contribute $12 billion a year to the economy.
Maine’s nonprofit sector paid over $4.7 billion in wages in 2017, or 17.9% of the state’s total payroll. These wages translated in an estimated $271 million of personal income tax revenue for Maine’s state and local governments and over $809 million in federal tax revenues. For instance, the Island Institute’s annual payroll of over $3 million to 54 full-time employees, who are dedicated to the long-term sustainability of Maine’s island and coastal communities.
Maine nonprofits contribute $12 billion a year to the economy through wages paid, retail and wholesale purchases, and professional services contracts. While the number of charitable nonprofits in Maine has grown 5.5% over the last decade, expenditures have grown an average of 5.3% each year. Maine’s art and cultural nonprofits alone generate over $150 million in annual economic activity, supporting over 4,000 full-time jobs. In Greater Belfast, Waterfall Arts is one of 20 arts groups contributing $2.7 million to the region’s economy.
Hospitals are significant economic drivers. While they represent fewer than 2% of charitable nonprofits, they account for the majority of the spending, 56.1%. On the other hand, human service organizations, which care for vulnerable populations in every far-reaching corner of the state, represent a third of these organizations and only 10% of the spending, showing that many are very small and community-based, often relying on volunteers.
Maine ranks in the Top 10 nationally for volunteerism. Representing more than a third of residents, nearly 425,000 people contribute 39 million hours and an estimated $948 million in time and talent to improve communities. Volunteers at the Jewish Community Alliance of Southern Maine contribute 2,000 hours of services annually by distributing 53,000 pounds of food, 1,549 kosher meals on wheels and a quarter million diapers.
Maine has one of the more robust nonprofit sectors in the country, working closely with partners in government and business to ensure the health and well-being of all Maine residents. Yet as nonprofits are challenged by economic trends and are continually asked to do more with less, it remains important to fully comprehend their significance to Maine’s future. For a closer look at the economic impact of Maine’s nonprofit sector, “Adding Up Impact” is available at nonprofitmaine.org.
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