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Rochester and the rise of the non-profit sector

By PAUL ERICSON
RBJ 75
Rochester Business Journal
July 29, 2011

When reporter Will Astor and I sat down with Rochester General Health System president and CEO Mark Clement for this year's RBJ 75 CEO interview, the session began with a question he posed to us: Why him? Why had we chosen Clement for this high-profile Q&A?

There were several reasons, we told him, but none more important than this one: Over the past year RGHS became the area's third-largest employer, moving ahead of Rochester's longtime jobs champion, Eastman Kodak Co. The health system now trails only the top-ranked University of Rochester and Wegmans Food Markets Inc., the largest privately held company.
 
RGHS' ascendance to the No. 3 spot means two of the area's top three employers are non-profit organizations. The leading public company can do no better than fourth place.
 
Without a doubt, things have changed since the days when Rochester's Big Three meant Kodak, Xerox Corp. and Bausch & Lomb Inc. It is a reshaping of the local economy that we formally recognized in 2009 when, after publishing the 20th edition of Rochester's Top 50 in 2008, we reinvented the supplement by broadening its focus to include not just the leading public and privately held companies but also the area's top 25 non-profit organizations.
 
But as I noted when we introduced the change, this move was only the latest in an evolution spanning more than two decades. Our original aim was to measure systematically the performance of the Rochester area's publicly held companies. In 1996, we expanded the publication to both public and private companies, in separate listings.
 
By 2004, the absence of non-profits seemed glaring, so we added a comparative look at the leading non-profits in terms of employment. But the Top 50 remained "a report on the region's leading homegrown public and private companies."
 
In 2009, we made the switch to the RBJ 75 and began to treat the top 25 companies in all three sectors on an equal basis. Clearly, a publication dedicated to the region's leading enterprises must recognize non-profits' role in the local economy.
 
Our approach to measuring companies' annual performance is well-established. We examine sales, earnings, return to shareholders and changes in employment, among other measurements. The publicly held companies are all homegrown: firms based in Monroe, Genesee, Livingston, Ontario, Orleans, Wayne and Wyoming counties, as well as out-of-town corporations founded in Rochester that have not been sold. Eligibility was determined by each company's status at the end of 2010.
 
Here's how the main RBJ 75 lists are ranked:

  • For the public companies, net income is the primary performance measure.
  • For the private firms and non-profits, total local employment determines the ranking order.

As always, we welcome ideas for new and better ways to take stock of Rochester's leading public, private and non-profit companies. Please let us know what you think of the RBJ 75 and how we might make next year's edition even more valuable. Contact me by phone at (585) 546-8303 or by email at pericson@rbj.net.

7/29/11 (c) 2011 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.


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