Where's the money for nonprofits?

November 2, 2012 Updated Nov 2, 2012 at 7:52 AM EDT

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Where's the money for nonprofits?

November 2, 2012 Updated Nov 2, 2012 at 7:52 AM EDT

The nonprofit sector in Western New York continues to grow, with more large agencies bringing in more dollars than ever before.

The 2012 Million Dollar Nonprofits list has grown to 292 organizations with combined revenue of $2.27 billion and each one generating at least $1 million. That's up 9 percent from the $2.08 billion generated by the 282 agencies on last year's list.

Yet executives say their fiscal situation is challenged year after year as resources get tighter in the face of increasing demand for services.

"Right now a lot of them are just holding on," said James Boles, president and CEO of People Inc., a nonprofit agency that serves individuals with developmental disabilities and seniors.

People Inc. is at the top of the Million Dollar Nonprofits list for the 15th consecutive year, reporting $125 million in revenue and nearly 3,150 full- and part-time employees. That's up from last year's list, when the agency had revenue of $118 million and 2,800 employees.

Million Dollar Nonprofits is part of a comprehensive research report by Business First compiled using data from 2010 tax filings, the most recent year for which complete data was available. The report can be seen in the All About Nonprofits special publication, included this week for subscribers and on newsstands Nov. 2.

Among the findings:

• 292 nonprofit organizations in Western New York had revenue of more than $1 million.

• Combined revenue topped $2.27 billion, with 11 organizations bringing in more than $30 million apiece.

• 57,000 individuals are full- or part-time employees of the region's largest nonprofits, with nine organizations reporting 1,000 or more on the payroll.

• 490 individuals earned $50,000 or more, with 14 earning salaries of $250,000 or greater.

Executives from the smallest and largest agencies on the list weighed in on the ongoing challenges they expect to face this year. They are preparing for changes at the state and federal levels that will affect how they are funded and how they deliver services, as well as how they can afford to retain and insure their workforce.

Agencies that serve the developmental disabilities population account for four of the top six largest organizations in the eight-county region. All are anxious as the state shifts away from fee-for-service to a managed-care environment. That includes The Resource Center in Jamestown, ranked second with $107 million in revenue.

"The state is realigning all of its plans, investments and energies toward this new system. At the same time, state government has implemented major funding cuts to providers," said Paul Cesana, executive director and CEO. "Our main challenge is to continue to look for radically different ways of meeting our mission."

Fundraising remains a major source of concern for many executives, as well. More agencies finished the fiscal year with fewer assets than in previous years, indicating many have had to dip into savings.

Connecting with donors to fill that gap is paramount.

A recent survey by Business First and the United Way of Buffalo & Erie County backed that up, with 76.7 percent of individual donors attributing their charitable contributions to personal connections to organizations. Among the 529 individuals who participated in the online survey, 41.6 percent said confidence in the services provided was a major influence, while 27.4 percent cited efficient management.

Michael Gross is executive director of Heritage Centers, which ranked sixth with revenue of $42.3 million. He pointed to an educational project planned for this year.

"There are no governmental dollars that can be used to help and all renovations will come as a result of fundraising," he said. "The health of the economy is extremely important to the cause as there are so few corporations/people in Western New York who can help at the level that is needed."

And as government dollars continue to decline, the task of balancing a budget grows even more difficult. Proposed changes to the state minimum wage rates won't help either, especially among nonprofits that rely heavily on part-time staffers, said John Murray, president/CEO of YMCA Buffalo Niagara. The $13.7 million organization was ranked No. 47.

"An increase in the minimum wage will ripple through the wage structure, increasing the cost of service delivery," he said. "It will require not-for-profits to seek out new and expanded revenue sources to offset increased wage and payroll tax costs or to reduce expenses to maintain a positive financial position."

Thomas Guagliardo is CEO of Big Brothers Big Sisters of Erie County, a $1.2 million agency ranked 270th among the Million Dollar Nonprofits. It is struggling not only with declining funding but with a demand for more volunteer mentors.

"The decrease in state and federal funding happened so drastically that our challenge in the year ahead is to replace those dollars just as quickly as they have declined," he said.

Others point to government cuts while demand grows: The Food Bank of WNY, which ranked 17th with revenue of $17.4 million, lost about 1 million pounds of food products from government programs while the number of households relying on its services rose from 30,550 to 36,207.

"This has significantly impacted our member agencies and we are doing our best to make up this deficit with additional donations of food and monies," said Marylou Borowiak, president and CEO.

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