County Council Public Hearing Testimony

April 7 was an historic night for the collective nonprofit sector in Montgomery County. For the first time testimony on the county's operating budget from the nonprofit sector as a whole was presented to the county council in a public hearing. The testimony was developed from the convening of nonprofit leaders on April 1st. Becky Wagner, Nonprofit Montgomery's co-chair, did a terrific job in testifying - unlike most folks who read from their written testimony, Becky spoke directly to the Council about two key issues for the entire sector. These issues: maintaining at least the current level of support for safety net services nonprofits and providing and raising the inflationary adjustment in the County Executive's budget from 1% to 2%, and to 3% if at all possible in this year of huge county deficits. To read the bullet points for the oral testimony and the full written testimony, press on the link for the full article.

ORAL TESTIMONY ON THE ’09 OPERATING BUDGET
To the
MONTGOMERY COUNTY COUNCIL
APRIL 7, 2007

• Nonprofit Montgomery! thanks the members of the County Council

• Unique moment - collective voice – convening of 80

• Rich tradition of county-nonprofit partnership

• We are the social safety net for the community – safety net needs more resources to meet growing needs, but maintain investment at least at current levels; many of us are preparing to serve more as the economic realities settle into our community; we ask your support as we plan to do more, without increases in support.

• Inflationary adjustments for contracts are essential to continue and expand service delivery - the current budget recommends 1% ; We urge a minimal increase of 2%. Just as you are negotiating employee contracts, we know you are aware that we too struggle to pay our employees competitive wages, provide benefits and keep the lights on! (Note: every 1% increase is $225,000 according to council staff).

• We want to work with the County Executive and Council to pursue new ways of doing business: we have begun this conversation with the County Executive and once the budget period is past - we hope to work with you to create efficiencies and develop creative solutions to our County's challenges - e.g., the expanded inclusion of nonprofits in the county’s cooperative purchasing agreements; some advance payment mechanisms for a portion of county contracts, as other jurisdictions have done.

• If you will consider our ability to leverage and save county dollars you will recognize that we are part of the answer to sustaining Montgomery County's service during this economic downturn.

• Recognize our Economic Impact - 16.5% of private employment; $1.7 billion in wages; $3.6 billion in spending in 2000, a substantial percentage of which is spent within Montgomery County.

• Use our Eyes, Ears and Expertise

WRITTEN TESTIMONY ON THE ’09 OPERATING BUDGET
To the
MONTGOMERY COUNTY COUNCIL
APRIL 7, 2007

Nonprofit Montgomery! thanks the members of the County Council for the opportunity to testify at this public hearing on the FY’09 Operating Budget. Thank you also for the role the Council has played in continuing the rich tradition of partnership between county government and nonprofits.

This is a unique moment for the Montgomery County nonprofit community because this is the first time we are coming before you with a collective voice to address budget concerns that affect the nonprofit sector as a whole.

Eighty nonprofit leaders came together at a convening on April 1 co-sponsored by Nonprofit Montgomery! and the Funders Roundtable of Montgomery County to discuss the County Executive’s proposed FY’09 operating budget and to consider a collective response to the budget on issues representing the nonprofit sector as a whole. Our written and oral testimony represent the consensus of the convening attendees, after discussion and lively debate.

As is always true at Nonprofit Montgomery! convenings, nonprofit leaders in attendance represented large, mid-size and small organizations who deliver critical services for Montgomery County. Some of the leaders present are at the helm of nonprofits with a long and rich history. Others, most often working in communities that embody the “new” Montgomery County, are delivering needed services. Many of these organizations are not only of high quality, but have grown from community grassroots and meet the particular requirements of ethnic, cultural and other communities.

County government enlists the skills and abilities of the nonprofit sector to carry out many of the county’s goals and mandates to provide a social safety net for Montgomery County’s most vulnerable residents. At the same time, the nonprofit sector leverages many times over every county dollar we receive with private funding, state and federal government grants and contracts, as well as volunteer hours. In addition, we prevent current and future costs that would otherwise be required if our programs did not exist. We have included below specific information developed recently on the impact and return on investment of the county’s nonprofit sector.

Our written testimony has three parts:
• two recommendations on budget issues that affect the nonprofit sector as a whole;
• specific ways in which we hope you will work with us in the important period after the budget has been adopted; and
• statistics on the impact and return on investment of the nonprofit sector in Montgomery County. (Attached to the testimony is an expanded briefing on the impact of nonprofits in the county, including leverage of dollars received, cost savings and economic impact)

Recommendations on FY’09 Operating Budget

1. Investment in social safety net programs for poor and vulnerable - Working with county government, the nonprofit sector is the social safety net for the most vulnerable of Montgomery County’s residents. Given the economic realities at the national, state, county and individual levels today, we continue to lose ground as more and more residents face economic hardships including loss of jobs, health care insurance and, in some cases, their homes.

There is no question that a strong and adequate safety net needs more resources to meet the county’s growing needs. We want to make this point clear because we are already seeing significant increases in service requests across the sector. We recognize the arduous decisions you face in crafting a balanced budget when confronted with unprecedented deficits in the coming years. However, we ask that you, at minimum, maintain the investment in safety net programs serving our most vulnerable neighbors in the FY’09 operating budget.

2. Inflation adjustment - Nonprofits are facing major increased costs for energy and health care similar to the county government and other Montgomery County businesses. In addition, one of the well-documented dilemmas for nonprofits is providing fair compensation to staff members in terms of both salaries and benefits while also keeping our commitment of offering services to those who need them.

Our staff members are facing the same economic challenges bringing many of their fellow county residents to our doors. As nonprofit leaders, we must find ways to make fair compensation adjustments so employees can meet their own “inflation adjustments.” Reasonable inflation adjustments for contracts are essential to continue and expand service delivery.

The County Executive’s budget recommends 1% inflationary adjustment. We urge the Council to adopt a minimal increase of 2%. Just as you are negotiating employee contracts, we know you are aware that we too struggle to pay our employees competitive wages, provide benefits and keep the lights on!

Working Together on New Ways of Doing Business

One of Nonprofit Montgomery!’s goals is to bring nonprofit leaders together to share ideas, “best practices,” and innovations in order to continually strengthen the county’s nonprofit sector as a whole. In many cases, we will be building on innovations that are already being developed by nonprofits within Montgomery County but are not necessarily known widely. In other cases, taking an evidence-based approach, we will be identifying what has worked in other areas.

We want to work with the County Executive and Council to pursue new ways of doing business. With the support of the County Executive’s Office of Community Partnerships, we have begun this conversation with the executive branch. Our top priority for this work in 2007-2008 has been the solicitation, execution and administration of county contracts with the nonprofit sector. We have an ongoing procurement working group comprised of County government department heads and nonprofit leaders. The group, chaired by David Dise and Uma Ahluwalia, is implementing a jointly developed work plan.

Based on this work, Nonprofit Montgomery! is taking the lead in putting forth ideas and generating feedback from nonprofits about ideas for increased nonprofit inclusion in county contracts that could yield cost savings. Thus far, the top 3 areas of interest to nonprofits – given their wide ranging impact on the budgets of nonprofits– are gasoline, insurance and telephone services. Another area we are exploring is various methods of providing advance payments on selected contracts with nonprofits, based on techniques and experiences from other jurisdictions and Montgomery County’s own past experience with this approach.

We believe there are many other creative solutions that can be developed with this type pf partnership approach. We look forward to working with you and your staffs to create efficiencies and develop creative solutions to our County's challenges during this difficult period.

Impact and return on investment of the nonprofit sector in Montgomery County

If you will consider our ability to leverage and save county dollars you will recognize that we are part of the answer to sustaining Montgomery County's service during this economic downturn. Nonprofits save money, multiply every dollar they receive, and strengthen our county, our communities and our residents in innumerable ways.

The nonprofit sector is also an important part of the overall economic base of Montgomery County. The sector comprises 16.5% of private employment; $1.7 billion in wages; $3.6 billion in spending in 2000 (latest published figures), a substantial percentage of which is spent within Montgomery County.

What follows is a detailed overview of the ways in which investments in nonprofits in Montgomery County provides a substantial ROI to the County. We hope it will provide valuable information to you, and also serve as the basis for further discussion with you and your staff.

IMPACT and RETURN ON INVESTMENT

Nonprofits save money, multiply every dollar they receive and strengthen our county and our communities. A few examples follow:

Nonprofits save money by preventing and solving problems, now and in the long term.

 If 50% of elderly adults who receive in-home care from the Jewish Social Services Agency (JSSA) were instead placed in nursing homes, the total annual cost would be 15 times higher – or $96 million a year – than the $6 million it costs for JSSA to provide services and keep those 1,000 elders in their homes.

Nonprofits multiply the financial resources they receive from individuals, corporations, government, and foundations by accessing other funding sources, employing volunteers, and using every donated good and service.

 Manna Food Center turns each dollar of cash into $5 worth of food through food donations and distribution. Manna serves 2,000 families each month with donations from grocery stores, community food drives, individuals, and the USDA surplus food program.

 Interfaith Works has a $47,000 contract supporting the Interfaith Clothing Center and Up-county Interfaith Clothing Center. This $47,000 contract leverages $230,000 in contributions from individuals, corporations and foundations. It results in contributions of clothing and household goods valued at $3.4M and 19,900 hours of volunteer service. The program served 14,548 individuals last year. The opportunity to access services at the centers helps families pay their less forgiving bills such as rent and utilities.

 The Arts and Humanities Council reports that more than 11,000 volunteers contributed close to 800,000 hours in 2001 at a value of $11.2 million.

Nonprofits strengthen our community by connecting people to each other, to services and to issues that matter to all of us.

 The United States has more soccer players than any other nation, and soccer is the fastest growing team sport in the country, in part because it crosses so many cultural boundaries. MSI, the largest youth sports organization in Montgomery County, provides 15,000 young people with the chance to play soccer, regardless of age, location, income, or physical ability. MSI receives no county funding and contributes to the maintenance and development of soccer fields at county public schools and parks.

 IMPACT Silver Spring educates and trains diverse residents in leadership and advocacy so that they can work across lines of race, class, and culture on challenging community issues. Parents who participate in IMPACT’s Parent Training Institute learn how to get involved in their children’s education, joining action teams at local schools, creating parent groups for immigrant parents, collaborating with administrators to make school-wide improvements, and making PTAs more inclusive. Last year, IMPACT engaged 200 minority, low-income parents – many of them immigrants – in five schools.

 In 1990, Imagination Stage in Bethesda pioneered its innovative approach to bringing together deaf and hearing students in the same classes and productions. Last year, more than 1,000 children and young adults participated in its Deaf Access programs and exhibit tours, along with more than 20,000 audience members.

 Identity, serving up-county Latino youth, is working to challenge negative stereotypes often associated with Latinos throughout the county. Youth volunteers are actively engaged in developing peer networks and contributing to the general community, including volunteering. They are also engaging their parents in community activism, especially in their schools.

 The Music Center at Strathmore in Maryland is a state-of-the-art 1,976-seat concert hall and education center. Supported by a public and private venture between the State of Maryland, Montgomery County, and corporate and individual philanthropists, the Strathmore offers audiences an impressive range of arts programming through its founding partners: the Baltimore Symphony Orchestra, the Washington Performing Arts Society, the National Philharmonic, the Levine School of Music, CityDance Ensemble, and the Maryland Classic Youth Orchestra.

ECONOMIC IMPACT

Working in partnership with business, government and concerned citizens,
nonprofits have a substantial impact on the economic base of Montgomery County.

 Nonprofit employment accounts for 16.5% of total private employment in Montgomery County, representing 38,650 jobs.

 From 1998 to 2005, nonprofit employment in the county grew 22.11% compared to a total employment growth of 9.8%. Nonprofit wages in this period grew 68.7% compared to total wage growth of 45.2%.

 In 2005, Montgomery County nonprofits generated $1.7 billion in wages or 6.3% of the County’s total wages from public and private sectors combined

 In 2000, nonprofits in Montgomery County spent nearly $3.6 billion, a significant percentage of which was spent within Montgomery County.

 Statewide, Maryland’s nonprofits generated $9.9 billion in wages in 2005, or more than 8% of the state’s total payroll. These wages translated into an estimated $450 million of personal income tax revenue for Maryland’s state and local governments and approximately $1.9 billion in federal tax revenues.

The Context

Have you used nonprofit services lately? Although we often think of nonprofits as serving only our most vulnerable neighbors, in fact, every person at every income level in Montgomery County has turned at some time or another to a nonprofit for services, whether to attend a world class symphony, to make sure a middle-school daughter is in a vibrant after-school program, to provide day care services for an elderly dad with Parkinson’s, or to advocate for improved traffic patterns, additional stop signs or storm drains for the neighborhood.

One of the main selling points for businesses and individuals moving to Montgomery County is the high quality of life, and much of this is made possible through the nonprofit community. Although we all use nonprofits - and also often volunteer our time and money to them - few of us know the impact of the nonprofit community and the tangible and quantifiable results they provide so cost-effectively.

What nonprofits do best is change lives by leveraging public and private dollars to achieve concrete, measurable results. This has already translated into huge cost savings for County government and the private sector, whose employees also use nonprofit services. As if this payoff wasn’t enough, nonprofits employ a significant percent of the private workforce in the county (16.5%) and generate substantial personal income tax contributions.

Thank you for the opportunity to share this testimony.

~ MaryAnn Holohean
Director
Nonprofit Montgomery!