The Southeast Gateway section of Bridgeton is not the kind of place where multimillion-dollar corporations clamor to do work.
Boarded-up houses, drug abuse, crime and poverty define the area in Cumberland County's poorest city. But one of the county's largest employers has been directing resources there for seven years. Tri-County Community Action Partnership, with 540 employees in three counties and a budget approaching $50 million, is working to revitalize the neighborhood - and its residents.
Where's the profit in that? Edward Bethea, Tri-County's operating officer, doesn't worry about it.
"Our mission is to provide services that improve the quality of life and increase self-sufficiency," Bethea said.
Such public-minded motives drive a lot of money through the economy. Billions of dollars are taken in each year by area institutions that never turn a traditional profit.
Instead, tax-exempt nonprofits use their income to heal the sick, educate students, feed the hungry and respond to emergencies. They pay salaries for thousands of workers. They may not pay stock dividends, but nonprofits make powerful economic and social impacts.
Tax-exempt, not-for-profit organizations are a $69 billion industry in New Jersey, a Press of Atlantic City analysis of Internal Revenue Service data shows. Nonprofits in only 13 states earn more income than that. New Jersey's nonprofits hold $102 billion in assets.
Nonprofits in Atlantic, Cape May, Cumberland and Ocean counties take in more than $3.6 billion per year and hold $4.4 billion in assets, according to the most recent IRS filings.
Hospitals and health care entities are the biggest earners. Fourteen of New Jersey's 20 largest nonprofits are hospitals, including AtlantiCare Regional Medical Center, the 15th largest nonprofit in income. AtlantiCare, with several organizations that run hospitals, other treatment facilities and community programs, operates on $650 million in revenue and expenses and is this area's largest nonprofit.
The region's largest nonprofits are:
AtlantiCare Regional Medical Center, Atlantic City, $547.3 million in income and $752.7 million in assets
South Jersey Hospital, Bridgeton, $547.3 million in income and $489.3 million in assets
Shore Memorial Hospital, Somers Point, $190.7 million in income and $225 million in assets
Cape Regional Medical Center, Inc., Cape May Court House, $133.1 million in income and $132.3 million in assets
Southern Ocean County Hospital, Stafford Township, $126.7 million in income and $123.4 million in assets
After hospitals, social service organizations - such as Tri-County, Cape Counseling Services in Cape May Court House, St. Francis Community Center on Long Beach Island and the Atlantic City Rescue Mission - are among the largest nonprofits. Unions and college foundations round out the area's largest organizations.
Richard Perniciaro, research dean at Atlantic Cape Community College, said nonprofits do work that government can't or shouldn't do.
"It's an alternative to giving money to government to do something. It allows people to put money into what they think is worthwhile," Perniciaro said.
He said some nonprofits perform less efficiently than others. Perniciaro sees little accountability at some organizations that are funded through government grants. Executive salaries at large nonprofits can rival those of private industry. AtlantiCare's chief officer, David P. Tilton, was paid more than $1.1 million in 2007, according to the hospital's last tax filing.
In addition, some nonprofits, particularly large nationwide charities, spend a majority of money donated on their fundraising activities, leaving less than half of charitable donations to be used for the actual cause.
But overall, a large nonprofit sector can benefit a region like this that has little industry or year-round employment. Most of the dollars brought in are contributed from out of the area or come from corporate and government grants, Perniciaro said. That money pays salaries, and those dollars ripple through the local economy as workers spend them.
"It has the same impact as any other industry bringing money into the region," Perniciaro said.
Hospitals and colleges are creating sophisticated, better-paying jobs, he added.
AtlantiCare spends about 60 percent of its income on salaries, Finance Vice Chairman James Nolan said.
In Cumberland County, the Millville Rescue Squad took in $5.8 million in 2007. Its income has grown to nearly $7 million since it began providing ambulance, fire and towing services at the motor sports park there, Chief John Redden said. That income allows the organization to employ 200 people.
Redden said its tax-exempt status saves taxpayers money. Because of the squad's ability to raise money through contracts, donations and insurance, it can provide Millville 24-hour service for about $70,000 per year, he said. Other cities might pay $1 million or more.
Perniciaro noted that tax exemptions result in host municipalities foregoing property tax payments on large land holdings and buildings. Property owners in municipalities like Somers Point and Atlantic City sometimes have complained about the local hospitals not paying property taxes.
Some universities and institutions make payments in lieu of taxes. But with a hospital or school, it's often a trade-off between tax revenue and local services, Perniciaro said.
Officials at several nonprofits said that under tax-exempt status, income earned in excess of expenses is used to improve the region's quality of life.
Redden said in addition to creating more jobs, the Millville Rescue Squad invests in equipment that enhances safety and performance.
"All profits go back into the service. That's why I embrace being the CEO of a not-for-profit," he said. "I don't have to explain to the board why there's not more profit for them to buy a new Lexus."
Nolan said AtlantiCare has built a new tower at its Atlantic City hospital and a cancer treatment center in Egg Harbor Township. It has invested in high-tech equipment. And last year, AtlantiCare provided $28 million in unreimbursed medical treatment for poor people, he said.
Others said the biggest value of nonprofits is not economic, but in doing work that others can't or won't.
Bethea said that Tri-County directs resources into the worst neighborhoods, the areas in which private businesses won't risk investment. The agency has worked to fix and build housing in Southeast Gateway and to bring in a convenience store. If it succeeds, private investors might pick up on the momentum, he said.
Most colleges rely on foundations to raise money to provide scholarships, said Herman Saatkamp, president of Richard Stockton College. The Stockton Foundation took in $4 million last year and has $8 million built up.
"In a state where funding for higher education is not a priority and tuition is higher than in many other states, how else do you make it possible for students to come to a public college?" he asked.
On Long Beach Island, the St. Francis Center raised $3.8 million last year to provide aid to the unemployed and seniors as well as day care and recreation programs.
And the $4.7 million raised by the Atlantic City Rescue Mission in 2008 allowed it to feed and shelter 14,000 homeless people. Director William Southrey said nonprofits like the mission allow donors to directly help fellow humans in need.
"Most of the time, the state bureaucracy can be heartless and empty, devoid of feeling for the human being," Southrey said. "With a nonprofit, you can become part of helping the impoverished and broken in our society.
"You see where your money goes. It's people to people, a point of human interaction," he said. "With a nonprofit, you can really be part of something important."
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