Where Most Needed

The web site of the Vermont Alliance of Nonprofit Organizations (EIN 03-0360296 Form 990) tells us that Vermont has 2,682 nonprofit organizations with $2.8 billion in revenue.  But the Barre Montpelier Times Argus reports that VANPO has decided to cease operations at the end of this month.  The organization had already laid off its lobbyist and cut back its executive director Jane Van Buren to ten hours a week.   

The Form 990 shows what a modest operation this was, with a 2004 revenue of just $214,561.  Of that, about $70,000 was member dues, $90,000 program service revenue, and $54,000 contributions.  The executive director took home $57,000 a year.  The staff count on line 90 is left blank, but the news report tells us that it was three.  This to support a membership of four hundred nonprofits and supporting organizations (such as accounting firms and consultants). 

How can it be that a sector that accounts for 42,373 jobs—12.3% of the state's workforce—can't sustain its own trade association?   The news report explains:  "aside from the academic and health care institutions at the top end, most of the state's nonprofit organizations are small in scale and budget."

By contrast, the Vermont Association of Hospitals & Health Systems (EIN 03-0218615 Form 990) has revenue of $1,256,961 and a staff of nine.  Almost 90% of its income is from member dues.  And its directory page lists just seventeen hospitals and six long term care facilities, most of which are also nonprofit organizations. 

We have noted previously the extreme concentration of resources in the largest organizations in the nonprofit sector.  The failure of VANPO drives home the practical consequences: without active financial support and participation of the largest organizations—universities and hospitals—nonprofit sector organizations may not be viable. 

Recently we noted that the Vermont visiting nurses association, which consists entirely of nonprofit organizations, is being challenged by for-profit competitors.  These nonprofits have among them $90 million in revenue and a strong incentive to work together.  So it could also be that the associations like VANPO that attempt to assemble all nonprofits into a big tent may not be as viable as associations serving groups with a common mission (especially ones facing a common threat). 

The failure of VANPO in the rural state of Vermont could also reflect the concentration of the most innovative and active nonprofits in a few large cities, which we have also noted. 

It is possible, too, that the strategic vision of the organization was flawed.  The organization's web site explains that the original strategy was to pursue an equal balance of income from grants, fee for service, and membership dues.  Though perhaps this was an appropriate strategy for a start-up, after eight years in operation the grant income had practically dried up.  Perhaps the organization needed to pursue an evolving model of support that involved less grant income over time. 

If you are interested in looking at the Vermont nonprofit sector as a whole, I have converted the data from the IRS master file of exempt organizations to an Excel file (4.4Mb) with a pivot table already set up to do analysis.  Since Vermont is a small state, it only has 5,574 records. 

The pivot table is set up (as a starting point) to show the Form 990 income by size of organization and its "foundation" status, which says whether it is a foundation, church, school, hospital, supporting organization, or just a plain publicly supported organization (type 1 or type 2).  Enjoy!