Atlanta Luring Major Charities

April 1, 2008       Natalie Ghidotti      

Some are dubbing it the new nonprofit Mecca, and Atlanta’s civic leaders are just fine with that label.

Atlanta has always been a draw for nonprofits. There are 7,500 nonprofits in the metro Atlanta area, according to the Georgia Center for Nonprofits. And during the past 15 years a number of national nonprofits moved headquarters operations to the city.

Points of Light & Hands On Network announced at the end of January that the newly merged organization would locate its headquarters in Atlanta, the original home of the Hands On Network. Habitat for Humanity International, which has always been based in Americus, Ga., about three hours south of Atlanta, announced in 2006 that the nonprofit would move its administrative headquarters to the big city.

Other mega nonprofits have made their home in Atlanta for years: the Arthritis Foundation moved to Atlanta in 1977, the American Cancer Society in 1987, CARE in 1993 and the Boys & Girls Clubs of America in 1994.

“Clearly, Washington (D.C.) has been headquarters for many. But to see other national nonprofits making their home here in Atlanta — that made it a logical opportunity for us,” said Michelle Nunn, CEO of the Points of Light & Hands On Network, of the organization’s recent decision to operate the merged staff in Atlanta — Points of Light had been in Washington, D.C.

City representatives and nonprofit executives who have made the move to Atlanta list many of the same reasons for the attraction. The highest on the list was quick and easy access to the country’s busiest airport, Hartsfield-Jackson Atlanta International Airport. For those nonprofits doing global business, access to direct flights to Europe, South America and Asia was cited as a motivation to move.

“Ten years ago, the airport offered only a handful of direct flights to Latin America,” said Hans Gant, senior vice president of economic development for the Metro Atlanta Chamber of Commerce. “Now, there are more than 35 direct flights to that area. And the direct flights to Africa have really picked up during the past two years. Nonprofits can now reach their constituents anywhere in the world quickly. That’s a huge perk.”

Duane Bates, director of public and media relations for Habitat for Humanity International, agreed that Atlanta as a transportation hub is a huge selling point for national nonprofits. “We have established offices around the world. Having immediate access to such a large airport allows us to facilitate meetings with those offices much more efficiently and economically.”

Atlanta’s crime issues, which according to Sperling’s Best Places outpaced New York City’s, haven’t detracted nonprofits from seeking out the Southern city. For example, on a scale of one to 10 for violent crime, New York City rates a six while Atlanta gets a nine from Sperling’s. Greg Donaldson, national vice president for corporate communications with the American Cancer Society, said the crime rates were considered a wash compared to the many benefits of moving from New York City to Atlanta during the late 1980s.

“The key criteria were that the city chosen have a more central location within the continental United States and that it have top-tier air service,” Donaldson said. “In Atlanta’s case, the city fathers also put together an incentive package that sealed the deal; just as they did when we recently relocated to downtown Atlanta.”

The city has been hard at work attempting to change the perception of Atlanta’s downtown crime “problem,” said Richard Orr, senior project manager for communications & membership for the Central Atlanta Progress Inc. “With all the convention and sports traffic, downtown has more than half of the population of the city here on any given day. And with that, we still only make up 4.6 percent of the city’s crime.”

Atlanta’s crime rates have improved during the past 15 years but are still not as low as other metropolitan areas. According to Money magazine, which annually ranks the “Best Places to Live,” Atlanta’s personal and property crime incidents in 2006 were 376 per 1,000 compared to New York City (89), Chicago (176), Dallas (257) and Washington, D.C. (171).

Smart City While trying to downplay high crime rates, city officials instead tout Atlanta’s positive attributes, including an educated and skilled workforce. According to the U.S. Census Bureau, Atlanta ranks No. 7 when it comes to the “smartest” cities in America. More than 44 percent of the city’s residents 25 and older hold bachelor’s degrees.

And according to a study released in 2006 by Portland, Ore., economist Joe Cortright of Impresa Consulting, metro Atlanta is winning the war on attracting the coveted “Young and Restless” educated 25- to 34-year-old population. The study found that from 1990 to 2000, Atlanta increased its young adult population 46 percent, which was faster than any of the top 20 most populous metropolitan areas in the country.

With numerous top universities nearby – including Emory University, University of Georgia, Georgia State University, Kennesaw University, Morehouse College, Georgia Institute of Technology and others – the city of Atlanta boasts a ready and willing workforce, said Nancy Longacre, vice president of the Georgia Center for Nonprofits. Three of these universities – Kennesaw, University of Georgia and Georgia State – offer nonprofit management degrees, which greatly helps area organizations in finding qualified candidates.

“These programs help build a pipeline for recruitment,” she said. “If you need an intern or a young entry-level person, the pipeline is always full.”

With the highest concentration of Fortune 500 companies in the country (13 global headquarters in the city), Atlanta has ready access to not only C-level executives but also an experienced support staff, Gant said. “There’s no doubt the talent many of these nonprofits are seeking is right here.”

Dr. John Seffrin, CEO of the American Cancer Society, said the talent pool was one of the deciding factors when the nonprofit moved from New York City to Atlanta in 1987. The organization only took about 23 percent of its workforce with it during the move, so hiring new staff was a major push once new roots were established.

Dollars & Cents Of course, economics plays a major role in any decision to move headquarters, particularly cost of living. Seffrin said it was often hard to attract employees to the New York area because of the high cost of living and that’s not the case with Atlanta.

“You can find other low-cost locations but none that are close to a major airport,” said Charles Whatley, director of commerce and entrepreneurship at the Atlanta Development Authority. “We’ve got the big-city appeal with lower costs.”

Gant said that in any given year, three to four nonprofits are looking to relocate headquarters to Atlanta. Most are comparing the city to other popular headquarter cities, such as Chicago, Dallas and Washington, D.C. He said the growth of nonprofits in the area definitely helps “sell” the city. “That’s their first question: what other nonprofits are in the area? They want to be able to learn from and leverage the experience of other nonprofits.”

Any major move requires a detailed economic analysis. Nunn with Points of Light & Hands On Network said her group’s analysis projected a savings of $1 million to $4 million during the next five years by moving to Atlanta.

“It was a tough choice,” she said. “Washington represents an important set of stakeholders. But we feel we can still maintain a presence there without having our entire operations based there.”

When Habitat for Humanity made the decision to move from its long-time home base in Americus, Ga., to Atlanta, it had much to do with the significant cost savings of headquartering in a metropolitan city versus in a town three hours away from a major airport. But although the nonprofit now has 161 employees in its Atlanta headquarters, it still has 281 employees located in Americus (with another 335 in offices around the world). While some staff members were relocated from Americus to Atlanta, mostly vacant and new positions were moved to the city headquarters, Bates said.

Financial Incentives Typical with any major corporate relocation are financial incentives offered by the city and state. These are also fairly typical with large nonprofits, though not on as grand of a scale. All of the major nonprofits in Atlanta received an economic incentive during the relocation.

The American Cancer Society was given a city variance to construct a six-story building on a plot of land designated for only a five-story building. Habitat for Humanity received $250,000 from the city of Atlanta’s Economic Opportunity Fund.

But much like in Colorado Springs, Colo., and the powerful foundation that helped make the city into a Mecca for evangelical organizations, a similar situation can be said about Atlanta’s nonprofit boom. In the Colorado Springs case, local foundation El Pomar donated $4 million in 1991 to help build a new headquarters for Focus on the Family. That move opened the floodgates for other Christian-related nonprofits. More than half of the city’s 50 largest Christian organizations followed the Focus move.

In Atlanta, many of the larger nonprofits have received private foundation grants to complete their moves. The major force behind these higher-profile moves has been the Robert W. Woodruff Foundation, the foundation of the former leader of the Coca-Cola Company. Foundation President Russ Hardin said the group has no agenda to attract national nonprofit headquarters to Atlanta. He said each funding case has been individual and based on the organization’s mission.

In the recent past, The Woodruff Foundation has helped several organizations with relocation costs, including the Boys & Girls Club of America (which has had a long-standing relationship with the foundation), CARE, the American Cancer Society (the foundation had an interest in luring the health services nonprofits to Atlanta’s “epicenter” of global health, granting each organization large “moving” grants) and Habitat for Humanity, a Georgia-grown nonprofit that the foundation leaders admired.

In 2006 when Habitat made its move, the Woodruff Foundation provided a $2.5-million grant to help cover moving costs. Large donations were also given by individuals Richard Bowers and J. Ronald Terwilliger. This month, the Woodruff Foundation is expected to vote on a grant that will support the Points of Light & Hands On Network with capital improvements to its new Atlanta headquarters.

Hardin emphasized that all of this support has nothing to do with an official mission to lure nonprofits to the city. “We’re not just willy-nilly trying to attract headquarters to Atlanta,” Hardin said. “There’s been a reason for all of our relocation support.” NPT

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