By Sue Fernandez
ANNAPOLIS – Nonprofit organizations don’t want to be left out of state economic development plans.
The Partnership for Maryland’s Future — a coalition of 45 statewide advocacy organizations, foundations and associations — has come up with a wishlist for tax incentives and public relations efforts of the very kind provided to for-profit businesses.
“We hear a lot of talk about business investment, but not about investment in nonprofits,” said Peter V. Berns, executive director of the Maryland Association of Nonprofit Organizations.
Gov. Parris N. Glendening, in his recent State of the State address, declared economic development one of his top three priorities.
“Nonprofits sometimes are forgotten, yet they’re a big part of the state’s economy,” Berns said.
Nonprofits contribute $6.2 billion annually to Maryland’s economy, or 6.5 percent of the gross state product, according to Internal Revenue Service reports from 1989, the latest available.
It’s especially important that the state keep nonprofits’ economic impact in mind with cuts in federal funding on the way, Berns said.
The Glendening administration has no specific economic development programs to help nonprofits, but nonprofits are considered in the overall economic development strategy, said Chuck Porcari, Maryland Department of Business and Economic Development spokesman.
“We’re keeping them in mind just as we’d keep any major industry in mind,” Porcari said.
Nonetheless, the Partnership has some specific suggestions. They are trying to get three bills through the General Assembly this session, which separately would set up:
* Credits for nonprofits that create jobs.
* A committee to oversee the block grants Congresss plans to provide the states to replace some federal welfare progams.
* A task force to spur charitable giving.
Under current law, only for-profit companies may take advantage of the two job-creation tax credits the state offers — one rewarding companies for hiring welfare recipients, and another for companies in enterprise zones. Nonprofits cannot claim either credit since the credits are subtracted from a company’s taxable income.
“If a nonprofit can give somebody a job and is helpful to the economy, why shouldn’t we get help?” asked Lorraine Sheehan, director of Melwood Training Center, a nonprofit organization in Upper Marlboro that provides job training for people with disabilities and helps them find employment. Melwood alone, with a $12 million annual budget, employs about 500 people.
According to the 1990 census, 7.3 percent of Maryland’s adult workforce is employed at nonprofit organizations.
Sheehan said nonprofits sometimes do more for the economy than for-profit firms because they’re more likely to hire workers who have a hard time finding a job.
“Corporations have a slightly different value system than nonprofits,” she said. “Non-profits are more apt to take risks in who they hire.”
The nonprofits agenda also seeks a Partnership Policy Council on Block Grants, which would administer the planned federal block grants.
Sen. Arthur Dorman, D-Prince George’s, said he plans to introduce a bill this week to set up a council made up of nonprofit organization administrators, business leaders and government officials.
Dorman said the council is needed because the federal government is expected to change the way it hands down money to social service agencies. Instead of giving entitlement money to specific programs, states would be handed general grants.
The block grant council could see that state money goes to prograns that serve the full array of needy people, said Robert Hess, director of Action for the Homeless, an umbrella organization for shelters around the state. If the money is distributed only to a certain segment of the community it could end up being wasted, he said.
“The real concern is how to make the most specific use of these dollars and maximize the amount of money that goes into direct services,” Hess said. “It’s going to take creative out-of- the-box thinking.”
Hess said the change to block grants actually could help nonprofits if the money is administered carefully, because the grants allow states more flexibility in handing out funds.
“It could have a positive effect if done right,” he said.
The final bill the nonprofits want passed would create the Maryland Gives! Task Force. Its goal would be to double charitable giving by individuals and corporations in the state. Marylanders who itemized charitable contributions on their 1993 tax returns gave an average of 1.58 percent of their income.
Del. Gerald J. Curran, D-Baltimore, who will introduce the Maryland Gives! legislation in the House, said the task force would come up with ways to make citizens more aware of nonprofit organizations. Public service announcements could be one way, he said. “We’ll try to pull on the heartstrings,” he said. “In general, it’s good practice for the community to focus on charitable giving, it’s something that’s easily forgotten.” -30-
