The Star Tribune’s Nonprofit 100 is made up of health care, educational, social services and arts and other organizations. Overall revenue for all four categories increased for the second year in a row, although the growth was generally a few percentage points slower than the previous year. Health care finances generally improved through increased efficiency while education organizations increased revenue overall despite declining enrollment trends. — Patrick Kennedy
Hospitals and insurers are generally healthy
Health care companies dominate the list of 100 largest nonprofit organizations in Minnesota. They take 18 of the 20 top spots on the list and 48 overall. As a group their revenue represents 91 percent of the revenue for all 100 organizations on our list. Total revenue for the group increased 5 percent to $51.1 billion
Most of Minnesota’s hospitals are nonprofits. For the 10 largest health systems, combined earnings hit the highest market in four years, driven by a complicated mix of factors ranging from slower hiring to a bad flu season.
In some cases, financial performance improved with increased efficiency through mergers, while others cited better reimbursement from health insurance companies. Hospitals offered a mixed verdict on the federal Affordable Care Act, which significantly expanded health insurance coverage during 2014. Charity care costs were down, but some hospitals reported more “bad debt” from patients who didn’t pay medical bills. Despite financial improvement for the state’s biggest health systems, the Minnesota Hospital Association said this summer that more than 30 hospitals in the state — mostly small operations — posted losses during 2014.
Sector sees the effect of declining enrollment
Education organizations took 23 of the top 100 spots on the list of the area’s largest nonprofits. They include the state’s private colleges and universities but also the biggest private prep schools in the state and Minnesota Transitions Charter School (ranked 96th), the largest charter school in Minnesota.
Revenue for the group was up 4 percent to $2.8 billion, but that belies a negative trend in school enrollments.
Earlier this month Hamline University’s law school and William Mitchell College of Law (ranked 90th) won approval from the American Bar Association for their plans to merge the smallest and second-largest of the four law schools in Minnesota. Enrollment at each school has been in decline since 2010, 17 percent at William Mitchell and one-third at Hamline. The combined Mitchell Hamline School of Law will be an independent, autonomous school affiliated with Hamline University (ranked 36th) with nearly 1,000 students and 42 full-time faculty.
Overall enrollment at the 17 members of the Minnesota Private College Council (MPCC) has increased 7.8 percent from 2004 to 2014. However, driven by the lingering effects of the recession and a declining number of high school students, undergraduate growth has declined each of the last four years and the graduate head count has increased less than 1 percent in the last five years.
Agencies struggle to keep revenue flowing
Social services organizations provide basic needs programing and other services and are typically the organizations most dependent on government grants, contributions from foundations and corporate giving programs and individual contributions. They take 18 of the top 100 spots on the Star Tribune nonprofit list. As a group, their revenue increased 5 percent, while expenses increased 7 percent.
Second Harvest Heartland, with a 1.5 percent annual revenue drop, was among six of the social services groups on the list to see revenue decreases. The YMCA of Greater Twin Cities saw an 11 percent revenue increase, regaining the top spot.
CommonBond (ranked 90th), a provider of affordable housing, got a new CEO in Deirdre Schmidt, the third CEO in its 47 year history, moved to new headquarters and completed a slew of new affordable housing projects.
Arts & Other
A few big gains help to lift sector as a whole
Organizations in the arts and cultural area saw revenue increase by 4 percent overall, driven in large part by a 77 percent revenue gain at the Guthrie Theater (ranked 77th), a 54 percent increase at the Minnesota Historical Society (ranked 51st) and a 32 percent increase for Pheasants Forever (ranked 56th).
The Minnesota Historical Society’s revenue included a $10.5 million appropriation from the state for renovations and expansion at the historic Oliver Kelley Farm, a National Historic Landmark in Elk River. At the Guthrie, revenue from ticket sales for the year ended Aug. 31, 2014, was on par with the prior year, but contributions, gifts and grants increased by more than 150 percent, from $9.3 million to $23.7 million.
Pheasants Forever delivers more than 90 percent of its revenue to its mission and as a result is one of three organizations in the category to draw the highest four-star rating from rating service Charity Navigator. The others are American Public Media Group (ranked 28th) and Books for Africa (ranked 98th).