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HELENA - Nonprofit groups have emerged as a hidden giant in the Montana's economy, paying $648 million in wages in 1998 and making up the fifth-largest source of wages in the state, a report from the Big Sky Institute for the Advancement of Nonprofits says.

These groups collectively pay more wages than any sector of the economy except for services, which paid the most wages at $2.3 billion, and then government, retail trade and manufacturing. The nonprofits paid six times the wages of agriculture and nearly three times what mining did in 1998, according to the institute.

Nonprofits received more than $2 billion in revenue in 1998, for an increase of 167 percent over the $1.2 billion in 1999, the institute said.

The Montana nonprofits, which numbered 1,228 in 1998, include groups involved in health care, education, environment, recreation and sports, arts, culture, humanities, religion, community involvement, public safety, research, science and other areas.

Mike Schechtman of Helena, director of the Big Sky Institute, which has been collecting the statistics. Under federal law, the Internal Revenue Service requires nonprofits to file an annual report if they have annual revenues of at least $25,000.

He said nonprofits need to engage in "fundamental economic education" about the role that nonprofits play in their communities and state

"It's hard for people to get their arms around the policy until you know the data," he said.

Schechtman said the institute also is going to solicit ideas from a variety of sources on what state and local governments can do to help strengthen the nonprofits.

The organization is in the midst of having town meetings in 19 communities to gather information about the needs of nonprofits in the state.

A big project for the institute is to develop a state association for nonprofits as 40 other states have. Such a group, Schechtman said, could provide secure, affordable health insurance for employees, life insurance, improved benefit plans, insurance coverage for directors and officers, general liability insurance coverage, training and professional development opportunities, opportunities for organizational development, discounts for big-ticket expenses and access to new sources of funding.

"Now, nonprofits often either don't have an opportunity for training or some of the workshops are just too expensive," he said.

One initiative Schechtman would like to pursue is to get the state Labor and Industry Department to code its monthly statistical reports to include for-profit or nonprofit groups to make it easier to track the group.

Paul Polzin, director of the University of Montana Bureau of Business and Economic Research, said the institute is right that nonprofits "are a sizeable part of the economy."

However, he said the state is already collecting these figures and putting them in its statistics.

"So there is a little bit of double counting," Polzin said.

Schechtman said it isn't double counting, but counting two different ways.

Schechtman helped found the Big Sky Institute in 1999 and went full-time Jan. 1.

If the nonprofits decide they want to strengthen that sector in Montana, they must decide how best to do that, he said, and how to get regional and national foundations to give to nonprofits here.

Schechtman's research examined the 10 states that with the least money in foundation assets. They are Montana, Alaska, Wyoming, North Dakota, South Dakota, Mississippi, West Virginia, Maine, Vermont and New Hampshire.

The top 10 states in foundation assets averaged $9.3 billion per state in foundation assets in 1990 and it grew to $26.2 billion per state in 2000. Meanwhile, the 10 states with the lowest foundation assets grew from an average of only $.063 billion per state in 1990 to an average of $0.398 billion in 2000.

Schechtman refers to the difference between the top 10 and bottom 10 states in foundation assets as the "philanthropic divide."

The Big Sky Institute is working on a national project on how these 10 states with the lowest assets can work together to become a larger national force.

"We think we need to do the right thing in Montana to strengthen our state nonprofit sector, but we can only do so much pulling ourselves up by our own bootstraps," Schechtman said. "How do we get the attention of the national foundations to invest in sector development in these 10 states?"

If you're interested

HELENA-The Big Sky Institute for the Advancement of Nonprofits has been having town meetings in 19 communities to discuss the needs of the state nonprofit organizations:

Here are the remaining meetings, which run from 7 p.m. to 9 p.m. in the particular city:

May 14, Livingston, City-County Building.

May 15, Billings, Deaconess Hospital, Fortin Conference Center.

May 16, Miles City, Holy Rosary Health Care.

May 21, Polson, library.

May 22, Kalispell, Westcoast Kalispell Center Hotel.

May 23, Libby, City Hall, Ponderosa Room.

May 29, Bozeman, library.

May 30, Missoula, First Methodist Church.

May 31, U.S. Department of Agriculture service center.

To be announced, Browning.

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