Report Finds Nonprofits Are Driving Force Of Berkshire Economy
A report by a Williams College economics professor finds nonprofits in Berkshire County account for nearly half of the region’s economic activity.Funded by Williams College and a number of area nonprofits, Stephen Sheppard’s report finds nearly 375 nonprofits account for $2.4 billion in economic activity among a total of $5.6 billion in Berkshire County. The overall local economy is operating at 14 percent below its peak output in 2005, but Sheppard says nonprofits have recovered to pre-Recession levels.
“That helps suggest ways in which the local nonprofit sector is building back and helping to bring the whole economy forward,” said Sheppard.
Sheppard says in 2010, all of the nonprofit sectors except arts and culture were spending more money than they were bringing in, helping to stabilize the local economy, but putting the organizations under stress.
“Fortunately they have been able to respond,” he said. “The economy has improved somewhat. They’re now operating, in the most recent data available, at ratios between 0.87 and 0.95. So that suggests that the local nonprofit sector remains reasonably healthy.”
Using data from as recently as 2012, the report finds nonprofits generate nearly 27,500 jobs directly or indirectly along with nearly $1.5 billion in expenditures each year. Sheppard says with limited wage information, the majority of those positions are living wage jobs.
Tristan Wilson, the managing director of Barrington Stage Company, says the Pittsfield-based nonprofit theatre company’s annual budget has grown by 35 percent to $3.8 million since 2006.
“We bring in close to 300 artists, staff and technicians every summer,” Wilson said. “We rent houses all over the county. We spend close to $250,000 a year just on housing. It goes right in the landlords’ pockets here locally and that money rolls right on back into the community.”
Wilson added that almost one-third of Barrington Stage’s budget funds area educational and youth outreach programs.
“The way that nonprofits and cultural institutions invest in the community is so much more than just funds,” Wilson said. “Our goal is to impact lives in this community.”
The total number of nonprofits in Berkshire County jumped from 346 to 373 between 2010 and 2012. Health nonprofits lead the way on revenue by sector with $870 million in 2012, followed by education and human services. Sheppard says a real difference between sectors is assets to expenditures, where arts and culture are leaders.
“The only metropolitan area in the United States that has higher levels of arts and cultural expenditures per capita than Berkshire County is metro Washington, D.C.,” said Sheppard.
The report finds nonprofits provide $100 million in state and local tax revenue each year. Sheppard says since nonprofits account for such a large piece of the Berkshire County economy, the focus should be on supporting them instead of trying to squeeze more out of them to help other sectors looking to recover in a post-industrial economy. For instance Massachusetts has allocated nearly $10 million for the Berkshire Innovation Center at the former General Electric site in Pittsfield. State Representative Tricia Farley-Bouvier of Pittsfield says nonprofits improve the region’s quality of life which attracts employees in manufacturing and other economic sectors.
“They’re looking for a good educational system,” Farley-Bouvier said. “A big issue in recruiting is the trailing spouse. What kind of quality of life does the trailing spouse have? What kind of job opportunities does a trailing spouse have?”