Deficit Spending Fueled Nonprofit Growth

The nonprofit sector spent more than it earned in eight of the past 10 years. The gap between revenues and outlays was $62.2 billion, $64.5 billion and $65.5 billion in 2008, 2009, and 2010 respectively.

The deficit spending fueled the nonprofit sector’s growth in total wages and employees, which outpaced government and business between 2000 and 2010.

The data is according to The Nonprofit Almanac 2012, published this week by the Urban Institute Press.

Even during and after the recession, from 2007 to 2010, nonprofit employment grew 4 percent and wages increased 6.5 percent, while they decreased in the business sector by 8.4 percent and 8 percent, respectively, and increased only 1 percent and 4.8 percent, respectively, for government.

Nonprofits paid $587.7 billion in wages and employed 13.7 million people (9 percent of the country’s labor force) in 2010.

Private giving was down 11 percent from 2007 to 2010. While corporate giving dropped 13 percent between 2007 and 2008, by 2010 it had surpassed pre-recession levels.

The Nonprofit Almanac 2012, by Katie Roeger, Amy Blackwood, and Sarah Pettijohn, explores the sector in detail, particularly its role in the economy. Chapters 1-4 offer data on wages and employment trends, financial trends, giving and volunteering, and the size, scope, and finances of public charities between 2000 and 2010 (for which the latest complete data are available). Chapter 5 focuses on the finances of 501 (c)(3) public charities and is summarized in The Nonprofit Sector in Brief: Public Charities, Giving, and Volunteering, 2012.

The Almanac shows:

• An estimated 2.3 million nonprofits operated in the United States during 2010. Some 1.6 million nonprofits were registered with the Internal Revenue Service (IRS), an increase of 24 percent from 2000. Of these, only 40 percent (about 618,000) were required to file a financial return with the IRS because they collected more than $50,000 in gross receipts in 2010.
• 958,740 public charities were registered in 2012, nearly two thirds of all registered nonprofits. They include arts, education, health care, human services, and other types of organizations to which donors can make tax-deductible donations. The number of registered public charities grew 42 percent during the decade, faster than other types of nonprofits.
• The nonprofit sector contributed $804.8 billion to the U.S. economy in 2010, 5.5 percent of the gross domestic product.
• For 2011, private charitable contributions, which include giving to public charities and religious congregations, totaled $298.4 billion.
• For 2011, 26.8 percent of adults volunteered with a nonprofit. Volunteers contributed 15.2 billion hours, worth an estimated $296.2 billion.