Profiting from nonprofits

July 25, 1994

There is more to economic life than business corporations and government agencies. The Maryland Association of Nonprofit Organizations (Maryland Nonprofit) says there are 12,224 nonprofits in Maryland, of which 2,510 have annual revenue exceeding $50,000. They employ 180,000 Marylanders, or 7.3 percent of the work force, about the number working for local government.

This is not a surprise to Baltimoreans who have been cheered by the arrival of two such nationally distinguished nonprofit organizations as the NAACP and Catholic Relief Services as stimulants to the Maryland scene and local economy.

Now in its second year, Maryland Nonprofit issued a report, "Partnership Principles," to call attention to this sector of the economy that is neither business nor government: hospitals, universities, museums, social agencies and advocacy groups touching the environment and everyone in it.

Examining the relationship between nonprofits and government, the group wants government to become more aware of what it is dealing with, to utilize the nonprofit sector's expertise in designing policies and programs and to cultivate it in Maryland economic development strategy.

Coincidental with this report, Lester M. Salamon, director of the Institute for Policy Studies at the Johns Hopkins University, has an article in the current issue of Foreign Affairs on the explosion of nonprofit organizations worldwide.

Mr. Salamon sees an "associational revolution," in the wake of the failure of socialism and the crisis of the welfare state.

In all continents, "people are forming associations, foundations and similar institutions to deliver human services, promote grass-roots economic development, prevent environmental degradation, protect civil rights and pursue a thousand other objectives formerly unattended or left to the state."

"The third sector has clearly come of age on the global scene," writes Mr. Salamon, "but it must now find ways to strengthen its institutional capacities and contribute more meaningfully to the solution of major problems -- all without losing its popular base and flexible capacity for change."

That is what Maryland Nonprofit is trying to achieve here, which means in large part the professionalization of the most numerous and smallest organizations with help from the largest and most professional. It also involves clear recognition from officials in government on what and whom they deal with in many contracts, services and policies.

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