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Giants of Nonprofit 

A look at Humboldt’s biggest, brawniest –- and wealthiest -– nonprofit enterprises

Chances are, you've spent time inside some of Humboldt's biggest nonprofits while going about your daily business. Maybe you deposited a check at the local credit union office. Or saw the doc for your pesky sinus infection at an Open Door clinic. Or maybe -- let's hope not -- you've whiled away tense hours inside the emergency room at St. Joseph Hospital; why your arm decided to try to depart your body at that particular moment was hard to fathom, but there it was, jutting crooked and wrong from your dislocated shoulder, and so there you were, sitting on the white sheet filling out forms with your shaky other hand.

If you live in Eureka, you could conceivably visit all three of these outfits in one foot-propelled afternoon if you had to, because they've each got offices within mere blocks of each other.

That's small-town for you. But there's nothing small-town about these particular nonprofits and several of their fellows. These are operations serving, in some cases, tens of thousands of people in the North Coast region, people who likely consider them indispensable. They have gross receipts ranging from $10 million to nearly $200 million dollars. Their impacts are large, as are their budgets.

But as nonprofits, they are supposed to put every dollar gained right back into the operation. That means no "profit," and so no income to pay taxes on. Most of the biggest nonprofits here don't have to pay property taxes, either. From the curmudgeon's corner: That's a heckuva lot of uncollected tax dollars -- what do we get instead? Well, the idea is, we get something better than tax dollars from nonprofits, something that perhaps wouldn't take place or even exist if the entity didn't get those tax breaks. We get groups that feed the hungry or heal the sick, sharpen the mind or soothe the soul. We get community, given a helping hand by hundreds of thousands of dollars of foregone property taxes that Humboldt County would otherwise collect.

In mid-2010, Humboldt County had 915 registered nonprofits, according to the National Center for Charitable Statistics. That's one nonprofit for every 147 people who live here. Most have budgets a fly wouldn't land on, their missions seemingly sustained on the diet of a breatharian. More than half -- 525 -- on the NCCS' list reported zero gross receipts. Three brought in just $41, $30 and $5.

It would be foolish to suggest that, say, the Orleans Rod and Gun Club (one of the tiny-dog zeroes) has anything in common with St. Joseph Hospital in Eureka ($186 million in gross receipts), other than some tax exemptions. The ones at the top of the heap are another sort of creature. They're complex and more business-like. They include our community's largest employers. And they do pay some taxes -- they kick in the regular employers' share of Social Security contributions for people on their payroll. Their employees pay income taxes like everyone else, and spend money here in Humboldt, helping power the region's economic engine.

The very, very big nonprofits, ones earning $500,000 or more (of which Humboldt has about 80), receive greater scrutiny from the Internal Revenue Service and have to undergo extensive audits. And, since we know you'll be asking, their boards go through detailed machinations -- regional and industry-wide surveys -- to determine what their top executives should be paid. Some, like the Humboldt Area Foundation, deliberately aim to pay less than most comparable organizations. "We're on the low end, basically because we want to be -- because we're on the North Coast, and that's where we should fit in," says executive director Peter Pennekamp.

So who are our big dogs and what are they doing for the public good? They are hospitals and clinics and backers of Humboldt State University. They're a credit union and an international media training group and agencies built on the big and small dreams of our social, charitable, religious, scientific, trade-association-happy selves.


Let's say you were the one with shoulder askew, or the broken leg, or the stabbing pain in your gut. And let's say, after you'd been fixed up and eventually sent home, you worried about how you were going to pay for it. No insurance. Low income.

Well, as a nonprofit, St. Joseph Hospital has to have options for you. It's part of the charity care it must provide -- that, plus a host of community benefits above and beyond standard health care.

The rules, in fact, for reporting on charity care and community benefits have tightened since passage of Obama's Patient Protection and Affordable Care Act in 2010.

Now hospitals have a new schedule -- Schedule H -- to fill out with their tax forms, where they must clearly state the community benefits they provide. They also have to do a community health needs assessment every three years, polling residents on unmet health needs. The hospitals then design their community benefits to meet those needs. Another new rule requires hospitals to prove they're not charging uninsured patients premium rates, and that they're doing their best to tell patients about financial assistance options before they get treatment. And, they're not allowed to hound low-income patients for payment. Some of these are provisions long sought by Sen. Chuck Grassley, R-Iowa.

These new rules don't rattle the folks at the Sisters of St. Orange's two St. Joseph Health System hospitals in Humboldt County -- Redwood Memorial in Fortuna, a critical-care rural hospital opened in 1957, and St. Joseph Hospital in Eureka, opened by the Sisters in 1920 and now a full-service acute-care facility with heart and cancer specialty services. They've been doing those things already.

So, actually, when you entered the emergency room with your arm a-dangling, if you'd not been in excruciating pain you'd have noticed financial assistance brochures in the waiting room. As you were admitted, the subject of your ability to pay or your insurance status likely came up. And if you'd moaned, "I can't pay for this!" they'd have hooked you up pronto with someone to help, says hospital spokesperson Courtney Hunt-Munther. Later, when you got your bills, they'd have mentioned the assistance program, too. As for the community needs assessment and community benefits reporting, St. Joe's has been doing that since the early 1990s, says Kathy Hayes, director of community benefits.

According to St. Joseph's latest community benefits report, the St. Joseph-Eureka hospital in 2009 spent 9 percent of its total operating expenses on charity care and community services, including $2 million on charity care (financial assistance) and $2.7 million in community services for low-income people. It also includes $9 million that the hospital says it swallows because it isn't paid enough by the state's Medi-Cal program or the county Medical Services Program.

On top of that, the hospital also figures that the federal Medicare program should have paid it $12.5 million more than it did in 2009. About 75 percent of its business is Medicare- and Medi-Cal-related.

Redwood Memorial spent 14.6 percent of its total operating expenses on charity care and community services in 2009, including $737,000 in charity care and $1.4 million on community services for low-income people. It figures it should have been paid $3 million more for people in state and local programs and $2.2 million more for people on Medicare.

One of the biggest community benefits from both hospitals is free to discounted care to patients depending on their incomes -- nobody is turned away.

Eighty percent of the Humboldt population is eligible for some sort of discount, says Sister JoAnn Eannareno, a Sister of St. Joseph of Orange and vice president of Mission Integration.

"If you have an income five times the federal poverty level, you'd be eligible for a discount," Hayes says.

In addition, St. Joe's has six community resource centers, in Rio Dell, Fortuna, Loleta, Blue Lake, Eureka and Willow Creek. Collectively, they provide food for thousands of people and even mail services for 275 homeless people who don't otherwise have fixed addresses (without which they can't get certain services). The hospital system also provides childbirth education for Hispanic families, and has collaborated with the Open Door clinic to bring the dental van to low-income elementary schools.

"The past three years, we've been focusing on food security," says Hayes. "We see that the lack of food is a very big deal; with the economy the way it is, people -- they're eating cheap and not healthy."

In this way, the hospital system hasn't strayed far from its early days in Eureka, back in about 1919 when the Sisters put in a vegetable garden on what today are tennis courts in Henderson Center.

"Without knowing it, that was the beginning of community benefit," says Sister JoAnn Eannareno.

Now, that benefit has grown into one whopping business, which owns property worth at least $181 million in Eureka and another $27 million in Fortuna, according to the Humboldt County Assessor's office. If that were taxed at the roughly 1.1 percent local rate, it would yield nearly $2.3 million in taxes.

 

It's soothing in here. On the little television in one upper corner of the waiting room of the Eureka Open Door Clinic, a South African landscape unfolds in waves of golden grass and jags of volcanic peaks. South African voices sing in warm a cappella, and the camera closes in on a group of huge antelope who are, the narrator tells us, kindly licking the sweaty salt off of each other. Then we're watching fuzzy little ice rats, nose-smooching. On the walls of the cheery waiting room are more animals, denizens of a row of brightly colored children's paintings.

There's a busy burble up at the front windows, near the door, where patients come and go in a steady stream. A man and his tiny daughter, an older woman shuffling painfully toward a nurse, a middle aged woman who arrives and promptly falls asleep in her chair.

Since 1971, Open Door has been serving anyone who walks in, regardless of ability to pay. That works out, today, to about one in four Humboldt County residents, says Jim Bella, Open Door's chief financial officer.

Open Door is one of the bigger portals for health care in Humboldt. Another is United Indian Health Service Inc., which serves nine tribes in Humboldt and Del Norte counties, about 8,000 people. Along with its main clinic, Potawot Health Village in Arcata, it has five other clinics with a mission of providing health care to the American Indian community.

United Indian Health Service includes traditional values in its approach to health care, according to its top executive, Vida Khow, who started in June.

"We focus a lot on the traditional foods, the healthy traditional foods, and encouraging people that these foods have an impact on the health of our bodies, ultimately preventing some of the chronic diseases that we're seeing such as diabetes," Khow says. "There's a variety of fresh vegetables that are grown locally that were in existence years and years ago, and we actually have those in a garden at Potawot to encourage people to also grow their own."

Like Indian Health, Open Door also has multiple clinics throughout Humboldt County. It receives payment in a variety of forms -- grants, patient payments, and Medicare and Medical reimbursements.

The recession has hit Open Door hard, Bella says. Laws have changed, and some things are no longer being reimbursed.

"Two years ago Medi-Cal eliminated the optional benefits -- that included, for us, primarily dental care for adults," Bella says. "It also included podiatry, and we have a large population of people with diabetes around here who need their feet to be taken care of. They're coming to us still, and that's part of the four to five million [dollars] in uncompensated care."

Open Door hasn't raised its fees, however.

"We are squeaking by," Bella says. "We are doing less, we are not hiring to fill vacancies, we have not had raises for quite a while, at least two years."

With clinics and offices in Arcata, McKinleyville, Willow Creek and Eureka supporting medical, prenatal, pediatric, dental, telehealth and visiting specialists services, Open Door rents five sites and owns four. It does not have to pay property taxes on what it owns -- roughly $6.2 million worth of land, buildings, fixtures and equipment.

 

 

The foyer of Coast Central's main branch and headquarters, in Eureka on Harrison Avenue, is festooned with community spirit. Colorful posters for local events and fund-raisers plaster the glass walls: Paddlefest, Backpacks for Kids, a Rotary shindig. Framed, on another wall, is the Credit Union Code of Ethics, next to print-outs of the latest financial reports.

Beyond the glass entry is a hushed, big, comfy, wood-trimmed space with tasteful tan-gray leaf-print carpet and matching chairs, botanical prints, a huge bird painting on one wall -- and a row of friendly tellers who don't let you walk two feet into the place without calling out, "May I help you?"

It's like a lot of financial institutions that way. Smartly outfitted, serene, professional. But unlike a bank, this place, a credit union, is nonprofit. Or, more accurately, "not-for-profit." The other nonprofits on our top-10 list are all 501(c)(3)s, or charitable institutions. Coast Central Credit Union falls under IRS tax law 501(c)(14), which governs nonprofit financial institutions. It earns its nonprofit tax-exemption status by being a cooperative owned by its members -- each owns one share -- and with a volunteer board of directors.

And unlike any of the other nonprofit behemoths in Humboldt, it does have to pay property taxes on real estate and equipment. It handed over $140,000 in 2009.

A credit union is like a bank, and its CEO can have a very bank-like salary. But a credit union does not have stockholders to please with hefty dividends (or else). And a credit union is more restricted than a bank in the way it can do business, says Dennis Hunter, Coast Central's vice president of marketing.
"We can't go out and get some of those big loans the giant banks can," Hunter says. "We can only have 12 percent of our loan portfolio go to business loans. And so we run a business ... but anything above running the business and the required reserves we have to keep, we return all of that to our members in terms of lower loan rates, higher deposit rates -- although no rates are good now -- and lower fees."
Coast Central Credit Union operates 12 branches in three counties, Humboldt, Del Norte and Trinity, and to date has 53,287 members.

Coast Central also contributes hundreds of thousands each year to the community in charitable grants. Among the grants awarded this year are $21,550 to Trinity Life Support to buy an emergency generator, $8,450 to Humboldt Medi-Trans for its new medical van, and $20,000 to North Coast Honor Flight.

And that CEO salary?
"We kind of look at it as, we have $900 million in assets -- we have to have someone qualified to run an organization like that," says Hunter.

Hunter says CEO Dean Christensen is the reason Coast Central, which started as a Humboldt County federal employees credit union in 1950, has "grown phenomenally."
When Christensen came to Coast Central, in June 1989, the credit union had $107 million in assets. As of July 2011, it has $913 million. The credit union has gone from having 16 percent of the population market share in terms of members in June 1989 to nearly 30 percent today.

 


In October 2008, a 6.4 magnitude earthquake hit Pakistan followed by severe aftershocks. Internews stepped into the immediate chaos.
"We were able to help get little, small, tiny radio stations up and running, broadcasting information that these refugees in the Hindu Kush mountains needed," says David Creekmore, Internews' chief operating officer. "For instance, to keep bugs away, they were soaking their tents in gasoline. But it was causing fires. ...The radio station that we assisted in setting up -- but that was conducted by citizens -- those Pakistani journalists were able to get the word out about the flash fires."
That's an anecdotal example of the sometimes huge impact, Creekmore says, of the nonprofit that helps people worldwide develop their own independent media. Internews, founded in Arcata in 1982, has helped develop 4,800 independent media outlets around the globe, and each year it trains up to 10,000 people to be media professionals.

It has worked in Central America and the Caribbean, East Asia and the Pacific, Europe, the Middle East and North Africa, Russia and the new independent states, South Asia, Sub-Saharan Africa, and beyond.

A year after the big earthquake in Haiti, when there were huge cholera outbreaks, Internews got the local radio stations to air news about the outbreak instead of just pop music.

"And there's no doubt those broadcasts saved lives," says Creekmore.
Internews also aims to have more systemic impacts -- that is, to, as Creekmore puts it, help people "build free and open societies" -- an outcome he admits can be tough to measure.

Internews doesn't get any benefit from the property tax break it would be entitled to -- it rents its Arcata headquarters.


Remember that flap last year, when California State University, Stanislaus balked at revealing how much it (and its donors) had paid Sarah Palin to speak at a fund-raiser? Actually, one of the university's foundations wrote the Palin contract, and the foundation believed it didn't have to reveal anything. Students, and a lawsuit, ferreted out the info: a $75,000 speaking fee; a donor-provided private jet from Alaska to California, plus $2,500 in lodging, security and local transportation, according to the Associated Press.

Well, such juicy info should be much more accessible come the new year, when Senate Bill 8 goes into effect. SB 8, sponsored by Sen. Leland Yee -- who twice failed to get the thing past former Gov. Arnold Schwarzenegger -- was signed by Gov. Jerry Brown Sept. 6. It requires university foundations in the UC and CSU systems to comply with the California Public Records Act and disclose, upon request, contracts, financial records and correspondence. Opposition to the bill centered around a desire to protect donors' privacy; the bill Brown signed allows protection of a donor's anonymity unless "the donor receives something from the university valued at over $2,500 or in which the donor receives a sole source (no-bid) contract within five years of the donation," according to Yee's news release. A donor attempting to influence curriculum or university operations likewise would not have anonymity.

The transparency and accountability seems sensible -- university foundations haul in the cash, which supports major functions. At Humboldt State University, two foundations are among the top 10 nonprofits in the county, budget-wise. One, Humboldt State University Sponsored Programs Foundation, had gross receipts in 2009 of $18.5 million, the other, Humboldt State University Center, had gross receipts that year of $16.5 million.

HSU spokesman Paul Mann says the university expects it will get a few more public records act requests at first under SB 8, then they will likely taper off.

The Humboldt State University Sponsored Programs Foundation handles research grants and contracts that fund faculty and student researchers' salaries.

The Humboldt State University Center says its overall purpose is "the development of persons as well as intellects." In 2009 it provided dining and bookstore services for more than 7,800 students and funded CenterArts performances (attended by 23,777) among other things.

HSU provides other community benefits, says Mann, including its one-on-one mentoring of small businesses, its opportunities for Native American students, production of the monthly Economic Index and its student volunteers.

 

 

Changing Tides Family Services was formed in 1975 by a group of community members who saw a dearth of childcare and child-abuse prevention resources in Humboldt County. It was a revolutionary move, said Carol Hill, Changing Tides' executive director.

"In 1975, providing support for childcare or even thinking about it was kind of radical," Hill says.

Today, Changing Tides, whose mission revolves around helping families to be "healthy, successful and strong," is one of the largest, most diverse local agencies. Its employees connect community members with childcare providers but also with mental health and developmental disability services, including in-home respite service workers.

Changing Tides is what's called a "flow-through" agency. It's not a big fund-raising organization. Rather, like its counterpart organizations in the other California counties, it manages state subsidies for qualifying families, who have to meet certain income requirements or be in school. Changing Tides used to operate 15 child care centers, but doesn't anymore -- they were losing too much money, says Hill. Now it focuses on helping people select a provider for whatever its needs are, and then reimburses the provider with state funds.

In 2009, the organization flowed through $4.8 million in state funds on behalf of 1,100 families and 400 to 500 local childcare providers, says Hill. "That includes the whole gamut of licensed family childcare homes, centers, after-school programs, recreation programs, friends, family and neighborhood caregivers," she says.

Changing Tides owns a building on Seventh Street in Eureka, where some of its offices used to be; it's for sale for $379,000, Hill said. According to the assessor's records, it was last assessed as being worth $174,086. Add to that $273,620 in personal property, and the total value of property exempt from taxes is $447,706 -- if taxed, that would yield about $4,925 in taxes.

Since last year, Hill has faced extra challenges: a delayed state budget resulting in no money to reimburse childcare providers and elimination, statewide, of the program that helped pay for childcare for families who had gotten off public assistance. (A lawsuit got the program reinstated, and Hill and her crew spent the rest of last year re-enrolling families). This June and July, Changing Tides had to dis-enroll 100 families because of reduced state childcare subsidies.

 

The Humboldt Area Foundation was formed in 1972 on a 16-acre knoll in Indianola. The land was owned by Lynn and Vera Vietor, long-time ranchers and timber growers; Vera, who died six months after Lynn, bequeathed the property to the new foundation, along with some seed money. The regional foundation provides grants, manages funds, conducts training and offers other support to individuals and organizations on the North Coast. It is, as its mission states, a "staging ground for residents ... to improve economic, social and environmental conditions of the redwood and rivers region."

It's working with 10,000 donors at any given time, says Executive Director Peter Pennekamp, and Humboldt Area Foundation manages between 700 and 800 funds a year. Humboldt Area Foundation doesn't pay property taxes on its main operation on Indianola Road, which the assessor's office lists as valued at nearly $1.2 million.
The Humboldt Area Foundation's 25 staff members get directly involved with some projects. Right now, foundation staffers are working with residents of Del Norte County and with the Yurok Tribe on ways to make kids healthier, reduce obesity and reduce violence, among other goals.

"One of ways health suffers is from bad economic outcomes," Pennekamp says. "When people don't get through high school, for the rest of their lives they're earning less. Take a whole community where that's the standard, it really increases health problems."

It's a 10-year project in collaboration with the local hospital, a major endowment and other foundations. Already, a big community garden has sprung up in Klamath Glen.
"Every school now has fresh vegetables," Pennekamp says. "The kiosk for the football games, they now sell fresh salads."

The work is all community driven, says Pennekamp, with staffers merely helping get things rolling.

"It's people getting together, people basically doing democracy, organizing in their churches, sometimes in food pantries, and saying -- not just this is what we need, but this is what we will do," he says.

 

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Heidi Walters

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Heidi Walters has been a staff writer with the North Coast Journal since 2005.

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