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Nonprofit Economic Impact Study Results Released

New report finds that Greater New London’s 150 public charities are an engine for economic well-being throughout the region

A new report found that nonprofits which provide a variety of human and public services to residents in the region are a key engine for economic health in New London County. But as government economic aid shrinks within the county, local human service agencies are falling behind their peers in other regions of the state at an alarming rate. The result could prove devastating to a regional economy that appears poised for growth over the next few years.

New London County’s health and human service nonprofits – 150 in all – account for more than 11,000 jobs and nearly $560 million in wages which accounts for seven percent of the area's entire economy.

The report, Nonprofit Economic Impact Study (NEIS), funded with grants from the Chamber of Commerce of Eastern Connecticut, the United Way of Southeast Connecticut, and the Community Foundation of Eastern Connecticut and authored by economist Stanley McMillen, Ph.D., demonstrates the impact these organizations have on workforce development, transportation, educational programs, and critical access to healthcare for individuals and families. Moreover, these nonprofits often provide the same, if not better services than those funded by local, state, and federal agencies for less money.

But the report also found that many of these agencies are at risk. While donor contributions and gifts are up 24 percent statewide, they have decreased by an alarming 22 percent in New London County – at a time when Norwich and New London ranked among the ten cities in America hardest-hit by the Great Recession of 2008.

Despite this downward spiral in funding, many of these organizations have seen a demand for their services dramatically increase. The report found that between 2009 and 2011:

  • The number of food stamp recipients grew by 66 percent in New London County while statewide, the increase was 52 percent;
  • New London County residents who applied for Temporary Family Assistance grew by 3 percent – almost equal to the entire state;
  • The percentage of students eligible for free or reduced cost school lunches grew by almost 40 percent between 2004 and 2011 while the rest of the state saw an increase of only 24 percent;
  • Individuals and families receiving services from domestic violence shelters grew nearly seven percent against the state’s 2 percent decrease in need for such services.

"These numbers reflect the way in which nonprofits have borne the cost of providing these services in southeast Connecticut without increased funding from state government," said Tony Sheridan, President of the Chamber of Commerce of Eastern CT. "We are optimistic about job creation in our region, especially with the addition of positions at Electric Boat and Pfizer, but we can ill-afford to have an under-developed workforce who rely on these services to secure these jobs."

Virginia L. Mason, President & CEO of the United Way of Southeastern Connecticut said that area nonprofits cannot and should not bear the entire burden of the Recession, especially when charitable giving tinkers on the mood of the economy.

"We and our regional nonprofit partners have always met the challenge of serving those in need and we will continue to do so," Mason said. "But the heavy lifting needs to be spread among the local, state, and federal agencies who have realized the fruits of our labor through highly skilled labor, children and young people whose academic futures are more brighter than ever before, and families and individuals who have benefitted from free or low-cost access to healthcare, support housing, food pantries, and cultural arts programs."

"Our generous donors see the value of the work carried out by these 150 community organizations, many of whom also receive grants from the Community Foundation of Eastern Connecticut," said Jennifer O’Brien, Program Director at the Community Foundation. "But our efforts must be bolstered by essential and significant support from government resources in order for our families to get ahead."

Read the Executive Summary of the report or the presentation.