While many people equate charitable nonprofit organizations in Arkansas with collecting money, a recent study found that Arkansas charitable organizations contributed more than $14 billion to the state’s economy from 2005 to 2008. The study, the first of its kind in Arkansas, was commissioned by UALR’s Center for Nonprofit Organizations and the Arkansas Coalition for Excellence. The study was conducted by the Institute for Economic Advancement (IEA) at the University of Arkansas at Little Rock College of Business.

The report, “Benefits of Doing Good: The Structure, Contribution, and Impact of Arkansas Nonprofits on the State’s Economy,” was released during a reception today at the Arkansas State Chamber of Commerce.

The study analyzed a sample of 1,490 tax exempt nonprofits in Arkansas. These nonprofits are among 13,456 charitable organizations in the state that have registered with the IRS distinction between 1995 and 2008. The nonprofits analyzed in the study had combined revenue of $9.9 billion and assets of $1.2 billion during the three-year period and directly employed approximately 68,000 workers.

The sample nonprofit organizations with 501(c) 3 tax exempt status are restricted to foundations, charities, social welfare organizations, educational institutions, and business leagues. The report describes the Arkansas nonprofit sector in terms of its activities, composition, employment levels, and earnings of its employees that helped determine the sector’s economic impact.

For a number of years, growth of a nonprofit sector has been targeted as a means of economic development in various states across the country. In Arkansas, the nonprofit sector was first identified as “target niche” for Central Arkansas in 2004 report to the Metro Little Rock Alliance. In 2007, the Arkansas Economic Development Commission identified the state of Arkansas as a prime location for nonprofits to locate and designated nonprofit headquarters and operations centers as a target industry.

Among other findings of the report:

• The nonprofit industry’s contribution of $8.3 billion in goods and services to the state supports a total output of $15.5 billion; adds $8.6 billion to gross state product through value-added activities; supports 189,077 jobs; and contributes nearly $6.6 billion to labor incomes.
• From 2005 through 2007, nonprofits in Arkansas paid its non-voluntary officers, directors, and employees more than $75 million in salaries and wages. The healthcare and social assistance sector reported receiving the highest share of compensation — an average weekly wage of $636 as compared to $666, the average weekly salary for all Arkansas industries.
• Out-of-state grants received by Arkansas nonprofits totaled 44 percent of the $247 million of grant funds — an important measure of nonprofit organizations’ contribution to economic activity within the state.
• Four industries dominate the nonprofit sector in Arkansas: healthcare and social assistance; educational services; arts, entertainment, and recreation; and “other services.”

The study’s report was supported by the Winthrop Rockefeller Foundation, Arkansas Community Foundation, the Arkansas and Northwest chapters of the Association of Fundraising Professionals, Leave a Legacy Arkansas®, Northwest Arkansas Community Foundation, and Alfred L. Williams and Elaine Eubank.

The full report is available online.