WHO BENEFITS FROM NONPROFIT ECONOMIC DEVELOPMENT? EXAMINING THE REVENUE DISTRIBUTION OF TAX-EXEMPT DEVELOPMENT ORGANIZATIONS AMONG U.S. CITIES

Authors


Kelly LeRoux, University of Illinois at Chicago. E-mail: kleroux@uic.edu.

Abstract

ABSTRACT: Questions surrounding the distribution of benefits have served as the focus for much research on local economic development. While nonprofit community development corporations (CDCs) emerged in the 1960s as one means of redistributing economic development benefits by targeting job training and business growth programs toward the urban poor, CDCs now represent only a portion of all nonprofit economic development organizations (NEDOs) in the United States. Newer forms of these organizations have emerged in recent years, carrying out diverse economic functions. This evolution of the nonprofit economic development subsector raises a critical question: Do nonprofit economic development activities remain concentrated today in poorer cities, or do wealthier cities also have high levels of nonprofit economic development activity? This study aggregates finance data for several types of NEDOs to the city level, for all U.S. cities with population 50,000 and over, in order to examine this question. Multivariate regression is used to estimate the effects of city-level demographic, institutional, and fiscal explanations on the level of NEDO revenues per capita. The findings demonstrate that revenues from some types of NEDOs, such as CDCs, remain concentrated in higher-poverty cities. However, wealthier cities have higher concentrations of revenue generated by nonprofit business assistance organizations and nonprofit real estate organizations. This paper concludes by discussing the implications of these findings for current federal and local policies related to tax-exempt organizations.

Ancillary