Nehemiah Corp. of America may be a nonprofit organization with roots in south Sacramento's Antioch Progressive Baptist Church, but it operates more like a business than a typical charity.
Now the longtime financial player in the national mortgage market is repositioning itself as a major player in local real estate development.
In short, Nehemiah — named for the biblical figure who rebuilt Jerusalem 2,400 years ago, and headed by a politically connected former legislative aide, lobbyist and nightclub manager — is once again testing the bounds of what a nonprofit can be.
President and Chief Executive Officer Scott Syphax sees no conflict between the group's business focus and its underlying mission.
"Profit is important to us, but we have a larger purpose," said Syphax, 46, who was paid $486,000 in 2008 through Nehemiah's for-profit real estate arm, ranking him among the region's highest paid nonprofit executives.
"The bigger purpose is economic empowerment and transformative community development."
The jury is still out on whether the Internal Revenue Service agrees.
Beginning in 1995, Nehemiah pioneered the concept of down payment assistance "gifts" from home sellers to home buyers, pulling in about $200 million in fees for the local group over the years.
Then, despite heavy lobbying by Nehemiah, the federal government in 2008 outlawed such seller-funded down payment assistance, leaving the group looking for new sources of revenue.
Nehemiah is currently staking much of its financial future on real estate development. A for-profit subsidiary, also headed by Syphax, soon will begin construction on Township 9, which could one day bring 2,900 housing units to an industrial area north of downtown Sacramento.
Syphax said Nehemiah needs to produce profits to pay for its charitable programs. In several years of its Form 990 filings, Nehemiah reported to the IRS that it recycled much of the money it earned from downpayment assistance – more than $55 million – for purposes such as construction of affordable housing and grants to community groups.
Still, the group's spending on charitable grants and contributions in the fiscal year ending June 30, 2008, was relatively small – $267,992 – compared with its $13.6 million in revenue, nearly all of which came from down payment assistance.
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