Download - 2014 04-np sector
The Nonprofit Sector
Leadership Sioux Falls 28April 2, 2014
Topics We Will Cover
• Statistics on Nonprofits and Philanthropy– US– South Dakota– Local
• Trends:– Governance– Accountability– Public Perception– Regulation
The Statistics are Difficult to Substantiate
• Nonprofit sector very diverse, with few large players
• Government does not allocate resources to data collection on nonprofits on par with other economic sectors
• Employment data is kept by states; some states limit how data can be used
• New reliance on NAICS system is a problem – no distinct category for nonprofits
The Nonprofit Almanac 2008, Urban Institute
Numbers Change, but Proportions Don’t
• Gifts & bequests – 87% in 1970, 83% in 2000• Giving as percentage of GDP constant at
about 2% over past 30 years• Individual giving as percentage of annual
income constant at about 2% over past 30 years
• Corporate giving as percentage of revenue constant at 1.2%
Nonprofit Nation, Michael O’Neill
Nonprofits in the US
Total 501(c) organizations - 1,599,013
Total 501(c)3 organizations - 1,052,495
Total 501(c)6 organizations - 66,985
Nonprofits comprise about 5.5% of GDP
Nonprofits comprise about 9.2% of employment
Source: IRS 2012 Data Book; Independent Sector
Nonprofit Market is Vast
• 75% of US nonprofits have revenue under $1 million
• Largest nonprofits’ revenues only 1.5% of annual giving
• Only ¼ of 501(c)3s file a Form 990/990-EZ
Nonprofits in South Dakota
9,063 Organizations
$8.06 Billion in Income*
$16.9 Billion in Assets
*2013 SD State GDP=$42.464 Billion
Sources: TaxExemptWorld.com, SD GOED
Nonprofits in Sioux Falls
Sioux Falls Development Foundation
(2013 Community Profile)
Major Employers (500+ employees)
Type Number Employees Percentage
For-Profit 15 20,038 44.74%
Nonprofit 6 17,936 40.05%
Government 5 6,289 14.04%
Other 1 524 1.17%
TOTAL 29 44,787 100.0%
Source: 2013 Giving USA
Source: 2013 Giving USA
Volunteering in the US
• In 2013, the number of volunteers reached its highest level in five years, as 64.5 million Americans volunteered through an organization, an increase of 1.7 million from 2010.
• Americans volunteered a total of almost 8 billion hours, an estimated economic value of roughly $175 billion.
• A majority of Americans assisted their neighbors in some way and more than a third actively participated in a civic, religious, or school group.
• Americans overwhelmingly volunteered in schools or with other youth organizations, working to advance the lives of young people.
Source: www.volunteeringinamerica.gov
Where the money comes from and where it goes doesn’t change much over time
75% of gifts are made by individuals – 1.4%-1.6% of GDP
Corporate gifts tied to net revenues (usually 1.2% of pretax profits)
Religion and education are top causes
International causes are usually at bottom*
Corporate giving tied to HQ and operations locations
Nonprofits in the News(usually for the wrong reasons!)
• United Way of America – William Aramony• September 11 charity• American Red Cross – 9/11, etc.• Jerry Sandusky/Penn State/The Second Mile• “Pennies for Charity” and state AGs• Katrina• Nonprofit hospitals• University endowments• Local “Scandal du jour”
Regulatory Trends and Influences
• IRS “Intermediate Sanctions”• Sarbanes-Oxley (SOX) – perception, not real• Senate Finance Committee• House Joint Tax Committee (hospitals)• Panel on the Nonprofit Sector• IRS Governance Best Practices (now included in
2008 Form 990 questions)• IRS Inquiry Letters (hospitals, universities, other
“non-charity” nonprofits)
Conclusions
• Nonprofit sector is big and influential• Nonprofit sector is very splintered• Perception of eroding confidence in charity• Trends toward more public scrutiny• “Where was the board?”• IRS changing role – reluctantly - from pure
financial regulation to broader governance oversight
Thank You!
818 S. Hawthorne Avenue
Sioux Falls, South Dakota 57104-4537
(605) 336-0244 or (888) 4-SUMPTION
www.sumptionandwyland.com