The recent announcement by Northwestern University that it was donating $550,000 to the City for the purchase of a new pumper and life-safety fire truck was welcomed, I think, by all. However, there is more to Northwestern’s economic role in Evanston than a single contribution of a few hundred thousand dollars. And there is more to the economic impact of dozens of other Evanston not-for-profit entities that pay little or no property taxes, yet contribute to Evanston’s economic health and stability in so many other ways.
The back-and-forth argument about whether non-profits are a benefit or a burden to the City has echoed through this town for more than the 25 years I have lived here. If we are going to keep arguing about it, let’s look at some facts:
Over half of Evanston’s jobs are in education, health care and social services. Most of those providers are non-profits. In April of 2009 the Federal Bureau of Labor Statistics showed that Metro Chicago employment declined across every economic sector from November of 2007 to the present – except for education and health care.
If one were to add City government and the two school systems to a list of Evanston’s largest employers, non-profits would occupy the first seven listings. Ranking number eight in employment is a manufacturing company; number nine is another non-profit and number ten is Jewel Foods.
To get a better handle on the impact of non-profits on the Evanston economy, this past spring Evanston Inventure – a private, non-profit economic development organization made up of the City’s largest employers – surveyed some 45 Evanston non-profit organizations and institutions. Inventure, with the assistance of the Evanston Community Foundation, asked these organizations and institutions about Evanston-resident employment, local goods and services purchased, amounts of Evanston office space rented and other questions about the dollars each organization paid into the local economy, as well as directly into the City’s coffers during 2008. The survey did not include all non-profits: Some were difficult to reach and others did not provide data after phone calls and written requests, so these figures are on the conservative side. Here are some of the aggregate totals from that survey.
The private, non-profit sector provides over 21,000 full-and part-time jobs in Evanston. This does not include City government, or the two school districts, or the Social Security Administration offices, or the State of Illinois Employment Security offices. It only counts private, non-profit, non-religious organizations.
Of those 21,000 full- and part-time jobs, some 8,464 are held by Evanstonians who received $274,000,000 in annual payroll in 2008. In addition, these 45 private institutions and organizations spent over $28,000,000 on Evanston goods and services.
The non-profits also rented some 246,000 square feet of private building space in Evanston; paid another $7,400,000 in parking and ticket taxes, building inspection fees, building permit fees, sewer and water fees and numerous licensing and user fees. The 45 organizations also paid some $4,100,000 in property taxes.
Northwestern alone paid more than $600,000 in ticket taxes to the City from its sporting events in 2008 as well as another $700,000 in parking taxes. And Mather LifeWays estimates that the cost of City building permits for their two new buildings will cost in excess of $2,500,000,
In its March 24, 2009 edition, the Wall Street Journal reported that non-profits tend to retain their workers during difficult times, keeping cities with large non-profit employers somewhat insulated from major economic downturns and layoffs. Evanston’s unemployment rate has consistently been lower than most of the Chicago region – even during this past year. As reported by the Illinois Department of Employment Security this September, the Chicago Metro area unemployment rate at the end of August was 9.6 percent. Evanston’s rate was 7.2 percent. Only 7 other Illinois cities out of 100 with populations over 25,000 people had unemployment rates lower than Evanston.
Non-profits also attract many highly educated, altruistic workers who enrich both the Evanston community and its workforce – a workforce much sought after by new, knowledge-based businesses.
It is quite likely that the non-profit sector will remain the dominant employer in Evanston for some time – especially since growth in the health-care industry is being powered by new diagnostic techniques, new drugs and new medical procedures and instrumentation – all products of the new “knowledge economy.” This growth will require an increase in newer and better-educated workers – requiring ever-expanding training and educational resources. Evanston will need to encourage the expansion of both its health-care and education sectors as well as seek, attract and retain those knowledge-based companies in other sectors that are experiencing new product innovation.
In the meantime, many of our non-profits will continue to grow and to play a major and important role in our community and in our economy. For this reason they should be respected and supported for their contributions to the local economy as much as any other quality business in Evanston.