Amaze Your Friends with these Nonprofit Factoids

When we believe something to be true but don't have the data to support that idea, what happens when we do find the hard evidence? Two things: either we find out we were wrong after all or . . . we were right and now we have the facts to put into a grant proposal.

Rick Cohen mined metric tons of data to bring us some newly published, meaningful facts about the nonprofit sector that we should be aware of . . . and use.

1. It's official: we're underpaid.

Nonprofit managers make $34.24/hour on average, compared with $36.18 in comparable state government positions, $39.75 in federal government, and $41.86 in private sector positions, according to the Bureau of Labor Statistics National Compensation Survey. Office and administrative support staff in the nonprofit sector also come up short: average hourly earnings of $15.46 compared to $15.53 in the private sector, $15.92 in state government, and $16.76 in local government. On the other hand, the relative gap among positions is smaller in our sector. So . . . should we be demanding more from our funders -- not because we're greedy but for the sustainability of our work?

2. Maybe I should look for a job in local government: Nonprofit human services workers are paid about the same as in the for-profit sector, but considerably less than in government. So . . . With so much of nonprofit human services supported by government money, why don't government contracts provide for wages that are comparable to what they pay their own staff for similar jobs? And, why don't we in the nonprofit sector pay more attention to low-wage employees, themselves the crucial, person-to-person mission delivery systems?

3. More than one-third of the nonprofit sector are not 501(c)3s: The Teamsters Union, the National Football League, the Chamber of Commerce and the Board of Realtors are all nonprofits of the "other c's" such as 501(c)6 and 501(c)4. While only (c)3s can can receive donations that are tax-deductible to the donor, these other nonprofits don't pay corporate income tax. Since these organizations benefit from tax-exempt status, why don't we do more to make their finances transparent, and hold them accountable to the public purpose?

4. There are more 501(c)3s than most people realize: According to the Internal Revenue Service Data Book there are 1,186,915 501(c)3s, up 13.5% since 2005. So . . . Is the potential power of so many organizations being realized? And word is that despite the recession, the rate of formation of public charities hasn't declined much in recent months. So . . . perhaps nonprofit creation isn't driven by the availability of funds, but by seeing a need?

5. But many registered nonprofits are either miniscule in size or no longer exist. The Internal Revenue Service estimates that 222,600 nonprofits with revenues under $25,000 will file the 990-N e-postcard in 2009, but it's possible that just as many are no longer in business. Nonprofits with revenues under $25,000 are now required to file the 990-N, a sort of "proof of life" annual form that should help adjust inflated numbers of nonprofits to more accurate figures. Failure to file for three years running gets you kicked off the IRS rolls of registered nonprofits. So . . . if you're a small nonprofit, be sure to file your 990-N!

6. And hospitals and universities have most (55%) of the nonprofit sector's money: Nonprofit hospitals are only 1% of 501(c)3s, but have 41.5 % of our sector's revenue! While there are only 2,640 higher education institutions, they have average revenue of $159 million each, totaling 13.8% of the sector's revenue.

And funding for hospitals doesn't include funding that goes to mental health, disease-related charities, or medical research. So . . .that leaves 35.4% of all nonprofit revenues to be shared by the remaining 625,193 reporting nonprofits engaged in arts, culture, and humanities, environmental quality and protection, diseases and disorders, crime reduction, legal advocacy, employment and jobs, food, agriculture, and nutrition, mental health, medical research, housing and shelter, public safety, recreation and sports, youth development, human services, civil rights and social action, community improvement and development, science and technology research, public and society benefit, religion and spiritual development, and mutual and membership benefit work.

Source: National Center for Charitable Statistics Dataweb

7. Part Timers R Us: Almost one in four (22 - 24%) of nonprofit employees are part-time, a much higher rate than the overall average of around 18% of all U.S. workers. So . . . is it a reflection of flexibility that nonprofits provide their willing staff, or does it reflect a lack of funding to afford them as full-time staff?

Sources: the nonprofit number is from unpublished Current Population Survey (CPS) data from the U.S. Bureau of Labor Statistics; the overall part-time workforce numbers come from published CPS information.

8. There are twice as many employees in the nonprofit sector than in the construction industry . . . and we need health insurance, too. There are 15.4 million workers employed in the tax exempt sector, more than twice as many as in construction (6.4 million), according to the Department of Health and Human Services. The tax exempt data doesn't distinguish between (c)3s and other 501's), but Lester M. Salamon of the Johns Hopkins University Center for Civil Society Studies suggests 9.4 million workers (of his lower estimate of 12.8 million total) comprise the "charitable" part of the nonprofit sector.

Although national health reform has moved toward giving tax benefits to small business employers who provide their employees with health insurance, nonprofits have been unassisted by this effort since we don't pay corporate income taxes. Nonprofit advocacy efforts resulted in the insertion of some benefits for small nonprofit employers in the draft Senate bill, but legislators and policy-makers are more prone to ignore nonprofit employers and their 12 to 15 million workers.

9. United Way donations are shrinking: 57% of United Ways reported declines in donations from last year, while just 32% showed increases. The largest loser was the Erie County, Pennsylvania United Way, which saw donations plummet 67.5%. So . . . the United Ways' role of providing substantial, unrestricted funds to human services continues to decline . . . as even more people apply for help.

10. Community foundations -- the highest growth area in philanthropy -- have a lot less money, too. Investment returns decreased by 27% (median) in a survey by the Council on Foundations. So . . . they'll have less money to put into grants for the next year or more.

11. And total charitable giving has decreased by the largest percentage in five decades. According to Giving USA, giving by individuals, corporations and foundations has decreased by 5.7% between 2007 and 2008. So . . . because of the lag time between financial changes at foundations and grant award dates, and the likelihood of a "jobless recovery," things won't be turning around any time soon.

12. Kansas City here I come . . . they got some crazy little donors there and I'm gonna get me some . . . Individual giving in Kansas City, Missouri increased by 128% . . . compared with the national average of 30% from 1997 to 2007. Kansas City donors -- the nation's most generous -- gave $3,375 in 2007, compared with $2,247 nationally. So . . . Fats Domino was right (again).

Blue Avocado columnist Rick Cohen appears in every other issue (that is, monthly). The former Executive Director of the National Committee for Responsive Philanthropy, he is National Correspondent for Nonprofit Quarterly. He is underpaid.

See also:

Comments (12)

  • Thanks, TJ. You can probably guess that I like numbers. However I'm always distressed about how flimsy some of the numbers describing the nonprofit sector tend to be. In Nonprofit Quarterly's nonprofit infrastructure study (http://www.nonprofitquarterly.org/images/infrastudy.pdf), the authors (including me) bemoaned the state of basic and applied research on the nonprofit sector. Groups that are doing fabulous work, like the Urban Institute's National Center for Charitable Statistics, the team at Guidestar, and Les Salamon's shop at Johns Hopkins, have to struggle for foundation resources to pay for their data collection activities. The NPQ study authors recommended that the federal government ought to devote funding to collecting data on the nonprofit sector commensurate with the funding at the Bureau of Labor Statistics, the Department of Commerce, and other federal agencies to collect, chew, and disseminate data on swaths of the for-profit and governmental sectors. There's all that money that foundations pay into the federal Treasury as excise taxes; wouldn't it be great to get access to a piece of that to fund this kind of nonprofit sector data gathering?

    Nov 02, 2009
  • Dear Rick: A very interesting article overall. However, I have a question.
    After reading the NYTimes article provided by the Giving USA link in Paragraph 11 of your article, I would give this information a slightly different spin than you did. The article notes that, "Even with the steep drop, charitable giving remained strong. Last year’s giving outstripped all previous years on record except 2007, though the outlook for next year remains uncertain."
    In other words, 2007 represents an apparent blip or even an anomaly. I'd like to know more about the percentage increase of 2008 over 2006 as a possible gauge of what to expect in 2009 and 2010. What does the trend line from 2002 to 2006 look like?
    I haven't the time or resources today to do that additional research. Your help would be most welcome in this regard.
    Thanks so much,
    Cassandra Flipper, Executive Director, Bread & Roses

    Nov 02, 2009
  • Dear Rick,
    In item #3, you pose the question of why "we don't do more" to make the finances of "other" 501(c)s "transparent." FYI, all 501(c) organizations are required to make their tax returns available to the public, and these documents are routinely posted on Guidestar.org. Your question makes it appear that trade associations have something to hide, when in fact we are subject to the same IRS "transparency" requirements as are c-3 charitable organizations.
    --SG, manager of a c-6 and a c-3

    Nov 04, 2009
  • Dear SG: Thanks for the clarifying note. There are transparency issues with much of the tax exempt sector, so to impute that there's something wrong with (c)(6)s is not correct. We've seen many public universities camouflaging some expenses behind their 501(c)(3) foundation arms, we've seen some really hard-to-follow transactions between related 501(c)(3) and 501(c)(4) entities, we've seen prominent national politicians use 501(c) appendages to hide unreported lobbying interactions, and more. I would amend my statement to suggest that we should do more to increase the transparency of all 501(c) organizations. I hope that improved transparency and reporting are on the agendas of the national nonprofit infrastructure organizations that are rethinking the nonprofit accountability agenda in this new political environment. Thanks for the correction.

    Nov 04, 2009
  • Rick,
    Do you have any facts about the average percentage of revenue that non-profits receive from grant funding? I run a 501c3 that is looking at about 16% of revenue from grant funding for fiscal year 2010 and would like to have a strong case to present to the potential grant givers.
    Chris

    Nov 04, 2009
  • Dear Chris: The problem--or challenge--in your question is the challenge in all of the data on nonprofits. We're trying to come up with facts about 1.2 million 501(c)(3)s or 1.8 million total tax exempt organizations that are exceptionally diverse, often connected by no more than a shared tax status (think of the connection between nonprofit Harvard University and a local nonprofit food pantry). What kind of nonprofit are you talking about (that is, what does it do functionally, what swath of the nonprofit sector is it in?)? And what do you mean by grant funding? Foundation grants? Government grants? That would help to clarify things. I'll pose the question to the Avocado's readers to see if they have any good data on your question, but defining what kind of nonprofit and what you mean by "grant funding" would help. Thanks.

    Nov 04, 2009
  • Hi Rick,
    Great information! I have a request---the AAFRC shows in their "Where Does the Money Come From?" the following breakdown ( think this was for '06' or '07...):
    Individuals $222.89 75.6%
    Foundations $ 36.50 12.4%
    Bequests $ 22.91 7.8%
    Corporations $ 12.72 4.36
    Where might I find statistices (reliable) that show the amount of government grants (local, state and federal) that is given to nonprofit organizations?
    Also, I joined Freelancers Union to get health insurance!
    Anne

    Nov 13, 2009

  • Hi Anne: Sorry to be so slow in responding. Regarding solid data on government grants (or government grants and government fees) going to nonprofits, I usually turn to the Urban Institute's Center for Nonprofits and Philanthropy, whose Nonprofit Almanac provides sort of a gross total of government support for nonprofits (the 2008 summary that is downloadable online, http://www.urban.org/UploadedPDF/411664_facts_and_figures.pdf, says that for 2005, government grants constituted 9.0% of revenues of reporting charities and fees for services and goods from government were 20.4% of nonprofit revenues).


    Even the latest Congressional Research Service report on the nonprofit sector relies on Urban's 2008 Almanac for the government calculation--and oddly doesn't seem to be able to offer a reliable breakdown of government resources between federal and state/local (the CRS report, which was just released in November, cites another Urban Institute study that for 2001, only 12% of nonprofit revenues originated with state and local governments and another 37% were federal dollars flowing through state and local governments--but if Medicare and Medicaid were subtracted out, the state/local origination proportion drops to only 9% and the federal flow-through rises to 61%). Nonprofit Quarterly's "Illustrated Nonprofit Economy" got Urban to help generate 2006 data on sources of revenue for 10 major categories of nonprofits (hospitals and nursing homes; colleges and universities; health; human services; religious congregations; community services; education; arts; international; and environment/animals), and put the state and local amount at $85 billion compared to $298 billion from the federal government, $649 billion in program fees from private sources, $233 billion from individuals, $41 billion from foundations, $23 billion from bequests, $19 billion from federated drives, $14 billion from corporations, $161 billion from interest/dividends and sales of assets, and $35 billion from memberships and miscellaneous.


    For those 10 buckets of nonprofits, of government revenues going to the sector, over 20% appear to originate with state and local governments. NPQ's Illustrated Nonprofit Economy is a nice graphic presentation, available for purchase from the Quarterly (www.nonprofitquarterly.org). But it took a yeoman effort to put that data together. We need better statistical tracking of government flows, especially now that the state and local governments are facing deep and persistent budget deficits. Congrats on joining the Freelancers Union for health insurance. Thanks for the inquiry.
    Rick Cohen

    Nov 21, 2009
  • Anonymous

    Wilbur Harrison, not Fats Domino sang "Kansas City." Tsk Tsk

    Oct 05, 2010
  • You're right, although Fats Domino covered it. Thanks for the correction . . . !

    Oct 05, 2010

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