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GIVE and TAKE

The rich get richer and the poor get poorer among Colorado Springs nonprofits

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One of a rare breed: Col. Max Miller spends countless - hours in his home office scrambling to help needy - military families. - SEAN CAYTON
  • Sean Cayton
  • One of a rare breed: Col. Max Miller spends countless hours in his home office scrambling to help needy military families.

When he left civilian work two years ago, retired Air Force Col. Max Miller never expected to spend long hours every day volunteering for a nonprofit. He wasn't the type.

But when Miller, 67, noticed the heart-wrenching toll Operation Iraqi Freedom was taking on poor military families in El Paso County, he dropped everything and rolled up his sleeves.

"When I wasn't sleeping or eating, I was working," he says about serving as a caseworker for The Home Front Cares, a local nonprofit founded in 2003 that helps families of soldiers.

In an average week, Miller continues to meet with four needy Army or Air Force families, usually headed by a deployed soldier's spouse struggling to feed her children. He also connects financial assistance to families of wounded Iraq war veterans, "some of the finest people in the world," he says.

And, he could add, some of the lowest paid. A private with four months of experience, for example, earns $14,821 a year, along with a housing allowance.

"A lot of low-ranking people just don't make enough money," he says.

Miller, it turns out, has joined thousands of people in another army of sorts: the diverse ranks of Colorado Springs' nonprofit sector.

The Home Front Cares has grown from an idea into a $250,000 operation in two years. With an almost all-volunteer staff and an avalanche of community support, it has enjoyed success that proves an exception, not the rule, for nonprofits that directly benefit local people.

In terms of resources and manpower, more prominent in Colorado Springs are dozens of tax-exempt evangelical Christian and sports organizations that have little direct connection to the city's needy.

Rich and poor

The top two Colorado Springs nonprofits, by last year's revenues, are evangelical organizations that draw upon international funding pools, according to Guidestar ( guidestar.org ), an organization that tracks nonprofits across the United States.

Young Life, an organization dedicated to introducing Jesus Christ to youth worldwide, pulled in more than $169.1 million in revenue in fiscal year 2004, up from $157 million in 2003. Focus on the Family, a Christian media empire that distributes its materials to millions around the world, reported 2004 revenues of $136.6 million, up from $127.9 million the year before.

Focus on the Family employs 1,300 at its Briargate campus and Young Life employs 120 on North Cascade Avenue. The United States Olympic Committee, an organization that promotes American amateur athletics, employs 284 at its complex east of downtown. The organization reported revenues of $83.6 million in 2003. (Revenues in 2002 spiked to $155 million because that year's Winter Olympics brought in a lot of money, including $60 million for broadcast rights from NBC.)

Groups like Focus and the USOC raise money from private donations, grants and other fundraising activities, investments and appreciation of assets.

While national nonprofits appear to be in good financial shape, many of the locally focused groups are struggling with flat or decreasing budgets. For example, the regional Care and Share Food Bank, which distributes food to more than 400 pantries and soup kitchens across southern Colorado, brought in $9.2 million in revenue in 2004, down from $10.2 million in 2003.

"There seems to be less money for low-income people," says Gary McDonald, president of Care and Share, which is part of a national network of food banks.

Nonprofit headquarters with the top yearly property tax - potential.At left, Focus on the Family, over $1.1 million... - SEAN CAYTON
  • Sean Cayton
  • Nonprofit headquarters with the top yearly property tax potential.At left, Focus on the Family, over $1.1 million...

This month, in response to the typical summer lull in donations, Care and Share cut the amount of food for needy families in half.

Many local nonprofits, McDonald says, have seen demand for services soar due to a host of reasons. The economy has been soft; state and federal governments have eliminated programs; and glitches in the state's welfare computer system have delayed assistance for numerous families.

Revenues for locally focused nonprofits statewide have remained stagnant or have faltered, according to the Colorado Association of Nonprofit Organizations, while the lines at soup kitchens have grown. Marian House Soup Kitchen, run by Catholic Charities of Colorado Springs, has seen demand for meals increase by 6 percent every year for the last five years. This increase has come at a time when the nonprofit has struggled to secure funding for its largely volunteer- and donation-driven program that feeds 450 people a day, says Kurt Bartley, executive director of Catholic Charities of Colorado Springs.

"The neediest people are the least likely to advocate for themselves," McDonald says. "The rich are getting richer and the poor are getting poorer."

A Republican philosophy

Despite the glaring gap between the haves and the have-nots, the nonprofit world is far from black and white. In fact, it's one of the most dynamic aspects of the local economy. To be fair, an apples-to-apples comparison can't be made between an international fundraising behemoth like Young Life and a scrappy, locally based nonprofit like The Home Front Cares. Their only real connection is that they're based in the same community and don't pay property taxes.

More than 800 area nonprofits typically collect more than $25,000 in revenue per year each, bringing in an aggregate of almost $1.5 billion in revenue each year, according to Guidestar.

El Paso County Assessor John Bass says if all nonprofits paid property taxes, government could raise $18.7 million in El Paso County annually. That translates to about $34 for every man, woman and child.

Religious nonprofits, including soup kitchens, own property worth almost $574 million and are protected from about $10.8 million annually in local property taxes.

"That's a lot of lost revenue with those facilities," says Mary Ellen McNally, a former city councilwoman who has served on the boards of many local nonprofits during her 41 years living in the Springs.

If Focus on the Family were to pay property taxes on its massive complex, for example, a whopping $1.1 million a year would be generated for local government agencies.

That colossal nonprofit organizations exist in a community ruled largely by small-government Republicans isn't surprising.

"As long as our City Council and County Commission is populated with conservatives, nonprofits will have to grow to provide services to the community," McNally says. "That's a Republican philosophy. I agree with that."

The problem is that the city's biggest nonprofits don't really provide many local services, while local nonprofits that do may face an uphill battle in securing private donations.

A 2002 study by the Pikes Peak Community Foundation, a nonprofit dedicated to boosting local philanthropy, found Pikes Peak area residents contribute 17 percent less to charitable causes than the national average.

Boundless questions

Pick a cause, almost any cause, and there's a Colorado Springs nonprofit to match.

...New Life Church, $809,000. - SEAN CAYTON
  • Sean Cayton
  • ...New Life Church, $809,000.

If you're passionate about trails and clean mountain air, hook up with the Trails and Open Space Coalition. If you want to support gay youth, look up Inside/Out Youth Services. Or if you want to protect traditional families against the "homosexual agenda," check out Focus on the Family.

"Nonprofits are the answer to a question someone has about society," says Michael Hannigan, executive director of the Pikes Peak Community Foundation.

"The questions are boundless," he says. "The size of the answer depends on the size of the question."

In principle, the tax break nonprofits enjoy is given in return for their lessening the burden on government, which otherwise would provide social services. But in practice, all kinds of organizations -- everything from various advocacy groups to the Pikes Peak Jazz and Swing Society and community band camps -- avail themselves of tax relief.

"Anyone can set up a nonprofit for $500 and a couple hours of time," says William Lyons, a local consultant to the nonprofit sector. "Most of them you'll never hear about."

And then there are mega-charities living the good life in Colorado Springs, headquartered in gorgeous buildings and bringing in truckloads of money while enjoying tax shelters.

Play and pray

Across the spectrum of Colorado Springs' major employers, including the military and high-tech industries, non-profits play a small but important role. Around 5 percent of the workforce collects a paycheck from either a religious or athletic nonprofit, according to the Greater Colorado Springs Economic Development Corporation.

The city is home to 37 national sports organizations, many of them affiliated with the United States Olympic Committee, which moved here in 1978.

And at least 20 national and international religious organizations, comprised mainly of huge evangelical enterprises, are headquartered here.

One of the city's oldest nonprofit charitable institutions, the El Pomar Foundation, helped bring these colossal groups to Colorado Springs by donating $4.2 million to the USOC and $4 million for the purchase of land to Focus on the Family.

There was a time when city leaders considered courting national nonprofits the key to breaking Colorado Springs out of economic doldrums. They arrived in two major waves. First came the national sports organizations, starting in the late 1970s, when the economy was dangerously dependent on military spending. Then came the early 1990s proliferation of evangelical groups that followed Focus on the Family. This provided much-needed economic stimulus following the collapse and subsequent scandal of the Federal Savings and Loan Insurance Corporation, when the city was known as the "foreclosure capital of America."

"Houses were being auctioned off at two or three hundred a month after foreclosure," recalls Rocky Scott, who served as CEO of the Economic Development Corporation for 16 years before leaving the job and moving to northern Colorado this year. "It wasn't a pretty sight."

In regards to Colorado Springs' current economy, he adds, "If you look at the total amount, [nonprofits] make a net contribution. Property tax is a fairly small component to overall revenue for the city and county."

Nonprofits pay salary taxes, and their employees buy homes, shop and bring in out-of-towners for meetings, he says.

Yet a 2004 survey by the Mountain States Employers Council found that in the Colorado Springs area, nonprofit workers earned $34,944, or 9 percent less than the $38,400 salary of the average workforce member -- including everyone from engineers to truck drivers.

Something strange

The U.S. Olympic Committee headquarters, $600,000... - SEAN CAYTON
  • Sean Cayton
  • The U.S. Olympic Committee headquarters, $600,000...

A decade after it attracted so many national nonprofit headquarters to town, the EDC's fevered campaign is over.

"We don't go around looking for national nonprofits," says John Cassiani, EDC marketing executive.

He adds that "they're not even in the Top 5" of the city's most-wanted industries: aerospace, data centers, finance and insurance, clean manufacturing and software.

In fact, nonprofits can make the job of economic development tricky. Evangelical nonprofits -- primarily Focus on the Family -- have brought worldwide media attention to Colorado Springs, branding it as a clearinghouse for right-wing reactionary politics.

The city gained a reputation for anti-gay bigotry in the early 1990s as the birthplace of Colorado's Amendment 2, a state law that ensured employers could make hiring decisions based on sexual orientation. It later was struck down by the U.S. Supreme Court. Amendment 2 was authored by a now-defunct Springs nonprofit, Colorado for Family Values, and received support from Focus on the Family.

This reputation dies hard, and it's something the EDC finds it needs to cut through to attract businesses and jobs.

Cassiani travels the country to promote Colorado Springs as a great place for business. When he visits companies on the East and West coasts, he says he often hears statements such as, "We've been hearing strange things come out of Colorado Springs."

Often by bringing company leaders to Colorado Springs, he can show them firsthand that the city isn't so narrow-minded.

"If they get the chance to [visit], we have a real high closing ratio," he says.

Taking it back

Tax shelters for lavish properties have caused grumbling among Colorado Springs citizens for more than a decade. In 1996, local attorney John Patrick Michael Murphy led an unsuccessful charge for a statewide constitutional amendment that would have forced nonprofits that don't perform typical government services to pay property taxes. He believes citizens should be able to choose whether to subsidize religious or athletic groups.

Almost 10 years later, Murphy maintains that the need to revoke tax protection for many nonprofits has grown.

"The footprint of tax-free real estate in El Paso County has continued to enlarge and increase in number," he says. "The abuses just abound."

Other community leaders may not be as critical of religious and sports nonprofits, but they see a need to shift away from encouraging nonprofit jobs to relocate here.

"We need to get primary jobs in here," McNally says, "and nonprofits are not primary jobs. They're service jobs."

Cutting deep

At the top of his list of priorities, Charley Shimanski doesn't count providing balance to Colorado Springs' economy and navigating its political wars.

...and the World Arena, $531,000. - SEAN CAYTON
  • Sean Cayton
  • ...and the World Arena, $531,000.

As president of the Colorado Association of Nonprofit Organizations, he's fighting to keep the doors of smaller local nonprofits open during tough times.

The softening of the U.S. economy after the tech bubble burst five years ago has hurt charitable foundations that help fund local nonprofits, he says.

Meanwhile, $1 billion in cuts to state-funded programs over the last five years, combined with federal cuts, have increased demand for nonprofit services.

"Foundations across the board are seeing more and more demand for funding, and they can't keep up," Shimanski says.

Mary Lou Makepeace, a former Colorado Springs mayor and now executive director of the Gay and Lesbian Fund for Colorado, a foundation that helps community nonprofits, confirms the trend.

"Our requests for funding have gone through the roof and our funding has remained stable," she says.

Slashed government programs have most severely hurt local nonprofits that help the needy, Shimanski says.

"It's exacerbated a bad situation for needy people and the charities that help them," he says.

"Everyone is feeling this pinch," says Bob Holmes, executive director of Homeward Pikes Peak, a local nonprofit that coordinates area homeless service agencies. This year Homeward Pikes Peak saw its federal grant for housing and caring for chronically homeless people cut by 80 percent, meaning that 20 fewer chronically homeless people will receive help.

Pikes Peak Mental Health, a nonprofit that serves patients in Colorado Springs and the surrounding seven counties, today receives roughly 26 percent the amount of state and federal funding for uninsured patients that it did in 2003. Two years ago, the organization was forced to eliminate or reduce the hours of 43 positions; five additional positions were affected last year.

And the Southern Colorado AIDS Project was forced to close the doors of its Pueblo office this year after losing two big federal grants.

The race to the ballot

Nonprofits serving the needy across the region see few signs of relief.

"The potential for further cuts is looming," says Cynthia Zupanic, spokeswoman for Pikes Peak Mental Health, who is keeping her eye on developments in both Washington D.C. and Denver.

The U.S. Congress, faced with the need to reconcile a federal budget deficit of $300 billion, may send further painful cuts cascading down to the local level.

But more immediately, all eyes are on Colorado's voters. This November they will decide whether to approve a bipartisan budget fix that, for five years, would suspend spending limits required by the Taxpayer's Bill of Rights.

Shimanski points to the $500 million or more that state lawmakers would need to cut from the state budget if Referenda C and D on the ballot don't pass. He says those cuts would ripple through the economy, driving demand for ailing nonprofits.

In contrast to the glimmering structures that house - national nonprofits, the Marian House Soup Kitchen gets - by with modest digs and resources. - SEAN CAYTON
  • Sean Cayton
  • In contrast to the glimmering structures that house national nonprofits, the Marian House Soup Kitchen gets by with modest digs and resources.

He says the referenda are essential to local nonprofits' survival.

Colorado House Speaker Andrew Romanoff, a champion of the compromise budget fix, agrees.

"The most vulnerable citizens are almost always the first casualties of a budget crisis," he says. "There's a limit to the ability for struggling nonprofits to step in."

While public interest in the November vote has remained lukewarm due to the abstract nature of the debate, Romanoff predicts people will support it if they realize who might lose out if it doesn't pass.

"If it means a senior doesn't get a meal or a soldier doesn't get vocational rehabilitation," he says, "those stories are gripping."

Whether those stories are gripping enough remains to be seen. If Romanoff is right, voters will have the chance to influence how well Colorado Springs' needy local nonprofits keep up with their well-heeled neighbors.

Top ten non-profits in Colorado Springs by revenue:

Young Life $157,024,040

Compassion Int'l Inc. $143,128,496

Focus On The Family $127,974,380

Colorado College $95,042,441

USOC $83,665,587

Greenlands Reserve $29,865,057

Resource Exchange Inc. $27,103,057

Int'l Bible Society $25,856,363

Bethesda Foundation $24,821,934

Pikes Peak Mental Health $24,621,765

data: 2003 fiscal year

data source: Guidestar guidestar.org

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