Nonprofits by the Numbers

Posted by Joan Ulmer on November 7th, 2014 in Thoughts & Commentary

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I must be desperate for a laugh if I chuckled at this:  last month, the Urban Institute, owner of the National Center on Charitable Statistics, came out with its annual report entitled, “The Nonprofit Sector in Brief 2014:  Public Charities, Giving and Volunteering.”  (This report on the sector is based on data from 2012.)  But it really isn’t about the nonprofit sector, as most of it focuses on public charities[1]—which, according to its own data, are two-thirds of all nonprofits.  So, the real title should be:  “Public Charities in Brief 2014.”

This report reveals some interesting data points that we should all know as we consider and plan for our future.   But a reminder:  while these facts and figures are based just on 501(c)(3) organizations, there are things to be learned for other organizations classified under 26 US Code 501, such as (c)(4)s, (c)(5s) and (c)(6)s.

  • Between 2002 and 2012, public charities grew by 29.6%!   In that 10-year timeframe is the worst economy our country—hey, the world—has seen in 80 years and public charities grew by 1/3.  Rather than being a source of pride, this is actually unsustainable growth in any economic sector, let alone one that survives to a great extent on the kindness of others.  By necessity, either Darwinism will win out and/or public charities will become the gerbils of the nonprofit sector.
  • Almost 2/3 of public charities had income under $500,000—suggesting that it might not be infanticide that prunes the sector, but fratricide.
  • A misleading statistic is that fees for services from non-governmental sources contributed 50% of the total revenue brought in to public charities. But before you go questioning yourself and your nonprofit, that figure is greatly skewed by the inclusion of hospitals, universities, and large-scale sellers of admission tickets. Government dollars (which, again, is skewed because it includes payments from Medicare and Medicaid, but also includes grants and fees for services), contributed 1/3 and charitable dollars a mere 13%.
  • In the following statistic there is a caution about statistics: we must understand what the statistic represents or we can end up comparing apples to oranges and wind up in the wrong orchard all together.  In the year from 2011 to 2012, the number of reporting public charities dropped by 14.5%.  And yet, earlier, it was reported that public charities grew.  What is going on?  The number of organizations filing 990-N (the e-postcard for nonprofits with annual receipts of less than $50,000) increased.  So, some of the bigger nonprofits became smaller, and new nonprofits start out—ready for this?—small.
  • Giving data we all know, but it never hurts to repeat seemingly good news: giving has been increasing for the last four years, growing by 11% from 2009 to 2013.  Adjusting for inflation, we still have not gotten back to pre-recession levels, but at least we’re moving in a positive direction.
  • In the same four year period referenced above, 2009-2013, corporate funding declined by 2%. Yet between 2002 and 2012, inflation adjusted foundation giving increased by 33.5%, for a total of almost $53 billion.  (Slipping in here a statistic from the Fall 2014 State of Grantseeking Report from Grantstation, 46% of their survey respondents applied for more grants than in the previous year, and 32% got more grants and 31% said they received larger grants than in the previous year.)
  • Given the trend of pushing people to volunteer, it is sad to see that only a tad over a quarter of the US adult population volunteered in 2013, the lowest level of volunteering since 2002. And, on top of that, the average number of hours volunteered dipped by just over 2%.  And what are volunteers doing with these hours?  “Social service and care”—serving meals, mentoring, delivering things/people, etc.—took approximately 28% of the hours and “administrative and support” took another 22%.  Only .1% was spent “waiting.”

Two last pieces of information to consider, again from the Grantseeking Report:  21% reported that their number one challenge in going after grants of any kind is a lack of time and/or staff; at 14%, increased competition came in second.

There are lessons to be learned here and plans to be made and/or adjusted.

[1] In case you are confused and scratching your head, all public charities are tax-exempt nonprofits, but not all tax exempt nonprofits are public charities.  Only public charities carry the 501(c)(3) designation.

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