Nonprofit 101

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Nonprofit 101

  1. 1. Nonprofit 101 November 2010
  2. 2. Agenda • What is a Nonprofit? • Nonprofit Distinguishing Characteristics • Nonprofit Resources: Where does the money come from? • Nonprofit Life Cycle
  3. 3. Your Presenter • Alliance CEO 5 Years • NPower • Former Lobbyist in AZ • 25 years Nonprofit Jobs/Boards • Chair, National Council of Nonprofits
  4. 4. Nonprofits in the U.S.Nonprofits in the U.S. -80,000 20,000 120,000 220,000 320,000 420,000 520,000 620,000 720,000 820,000 920,000 1982 2005 200% Increase in Number of Public Charities • Nonprofits now employ 10% of the nation’s private workers, 25% in Washington, D.C., and 32% in some other cities
  5. 5. Nonprofits in the U.S.Nonprofits in the U.S. • Nonprofits represent $800 billion in annual purchasing power • Nonprofit expenditures account for 8.5% of national income • Nonprofit sector is the 3rd largest contributor to the U.S. GDP, after retail trade and wholesale trade
  6. 6. Arizona Nonprofits More than 20,000 operating – diverse
  7. 7. Arizona Nonprofits • $18 billion impact (450 Super Bowls/year) • More than 120,000 paid employees • Paid/unpaid workforce larger than govt.
  8. 8. Arizona Nonprofits • 60% of Arizonans volunteer time • 60% nonprofits have revenues below $250,000
  9. 9. What is a Nonprofit?
  10. 10. What is a Nonprofit? • Other Terms: Non-profit, Not For Profit, Charity, NGO, Voluntary Org, Social Sector, Third Sector, Independent Sector, 501c3, Tax Exempt • Community Investment Organization • Community Benefit Organizations • Social Profit Organization
  11. 11. What is a Nonprofit? 2 defining criteria
  12. 12. What is a Nonprofit? Owners (no stockholders) • For-Profit: Individuals, Partners, Shareholders • Government: “The People” • Nonprofit: ??? 1
  13. 13. What is a Nonprofit? Owners (no stockholders) 1
  14. 14. What is a Nonprofit? Tax Exemption 2
  15. 15. What is a Nonprofit? Tax Exemption • Corporate Income Tax – state & federal exemptions • Payroll taxes • Sales taxes • Property taxes 2
  16. 16. What is a Nonprofit? Tax Exemption • Annual reporting: Form 990 • Available at www.guidestar.org2
  17. 17. Nonprofit Characteristics 6 defining characteristics6 defining characteristics
  18. 18. Nonprofit Characteristics Mission Focus 1
  19. 19. Nonprofit Characteristics Social ROI 2
  20. 20. Nonprofit Characteristics Assessment of program outcomes 3
  21. 21. Nonprofit Characteristics Role of Governing Boards 4
  22. 22. Nonprofit Characteristics Involvement of volunteers 5
  23. 23. Nonprofit Characteristics Culture 6
  24. 24. Nonprofits - Not Unique • Skill level of staff – Hard to pay for top talent • Scarce resources
  25. 25. Where does the money come from? • Donations • Government • Earned Income
  26. 26. Sources of Nonprofit Income Earned 43% Government 32% Donated (All sources) 25%
  27. 27. Earned Government Donated Human Services 25% 60% 15% Arts 50% 10% 40% Health 54% 45% 1% Education 70% 10% 20% International 20% 20% 60% Income Sources by sub-sector
  28. 28. Comparative Gross Expenditures U.S. GDP ca. $12 trillion Government Expenditures ca. $4 trillion Nonprofit Expenditures ca. $1 trillion Sources of Nonprofit Income* (all subsectors) Earned 43% Government 32% Donated (All sources) 25% Earned Gov't Donated Human Services 25% 60% 15% Arts 50% 10% 40% Health 54% 45% 1% Education 70% 10% 20% International 20% 20% 60% Income Sources by Sub sector*
  29. 29. Sources and Uses ofSources and Uses of Charitable ContributionsCharitable Contributions Donations to Nonprofits, in Billions Individual $229 74% Foundation $39 13% Bequests $23 8% Corporate $16 5% Source: Giving USA Foundation, Giving USA Total Giving = about $300 billion
  30. 30. Sources and Uses ofSources and Uses of Charitable ContributionsCharitable Contributions Giving by Nonprofit Type, in Billions Religion $102 37% Foundations $28 10% Human Services $30 10% Environment/Animals $7 2% International $13 5% Arts/Culture $14 5% Social Benefit $23 8% Health $23 8% Education $43 15% Source: Giving USA Foundation, Giving USA
  31. 31. 31% of private foundation grants go to education ($54.9 M); another 14% are allocated to Social and Human Services ($23.9 M) and another 12.6% ($22.4 M) are allocated to Community Development Where Arizona FoundationWhere Arizona Foundation Dollars Are GoingDollars Are Going Source: Arizona Grantmakers Forum
  32. 32. Nonprofit Life Cycles Concept Incorporation Growth Source: TCC Group Core Capacity Assessment
  33. 33. Questions? • Resources: – Alliance: www.arizonanonprofits.org – National: www.councilofnonprofits.org/resources – “Nonprofitspeak”: Glossary of Terms http://www.idealist.org/media/pdf/career/guide/App
  34. 34. Next Webinar • Dec 14 10:00 am Topic: Nonprofit Collaboration

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