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The Nonprofit Sector  Leadership Sioux Falls 27        April 4, 2013
Topics We Will Cover• Statistics on Nonprofits and Philanthropy  – US  – South Dakota  – Local• Trends:  –   Governance  –...
The Statistics are Difficult to        Substantiate• Nonprofit sector very diverse, with few large  players• Government do...
Numbers Change, but          Proportions Don’t• Gifts & bequests – 87% in 1970, 83% in 2000• Giving as percentage of GDP c...
Nonprofits in the USTotal 501(c) organizations -                      1,616,053Total 501(c)3 organizations -              ...
Nonprofit Market is Vast• 75% of US nonprofits have revenue under  $1 million• Largest nonprofits’ revenues only 1.5% of  ...
Nonprofits in South Dakota                        8,950 Organizations                     $8.25 Billion in Income*        ...
Nonprofits in Sioux FallsSioux Falls Development Foundation     (2012 Community Profile)Major Employers (500+ employees)  ...
Source: 2012 Giving USA
2011 Giving by Recipient Type               Recipient Type      $ (billions)Religion                                     9...
Volunteering in the US • In 2011, the number of volunteers reached its highest   level in five years, as 64.3 million Amer...
Where the money comes from and where it goes doesn’t change much over time75% of gifts are made       Religion and educati...
Nonprofits in the News     (usually for the wrong reasons!)•   United Way of America – William Aramony•   September 11 cha...
Regulatory Trends and           Influences• IRS “Intermediate Sanctions”• Sarbanes-Oxley (SOX) – perception, not real• Sen...
Conclusions•   Nonprofit sector is big and influential•   Nonprofit sector is very splintered•   Perception of eroding con...
Thank You!      818 S. Hawthorne AvenueSioux Falls, South Dakota 57104-4537(605) 336-0244 or (888) 4-SUMPTION    www.sumpt...
Nonprofit Sector - Statistics & Influences
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Nonprofit Sector - Statistics & Influences

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Addresses US, South Dakota, and Sioux Falls area statistics involving nonprofits and their role in employment and the economy. Regulatory influences and public perception of nonprofits is also addressed.

Presented to the "Leadership Sioux Falls" group of the Sioux Falls Area Chamber of Commerce in April, 2013. This presentation has been made to many audiences in the past ten years, regularly updated.

Designed to give nonprofit professionals, volunteer board members, and community leaders perspective on the importance and reach of the nonprofit sector. Preparation for leaders to consider nonprofit board service in the larger context of economic development, employment, and governance duty.

Published in: Business
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Nonprofit Sector - Statistics & Influences

  1. 1. The Nonprofit Sector Leadership Sioux Falls 27 April 4, 2013
  2. 2. Topics We Will Cover• Statistics on Nonprofits and Philanthropy – US – South Dakota – Local• Trends: – Governance – Accountability – Public Perception – Regulation
  3. 3. 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 nonprofitsThe Nonprofit Almanac 2008,Urban Institute
  4. 4. 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
  5. 5. Nonprofits in the USTotal 501(c) organizations - 1,616,053Total 501(c)3 organizations - 1,081,891Total 501(c)6 organizations - 69,198Nonprofits comprise about 8.5% of GDPNonprofits comprise about 11% of employment Source: IRS 2012 Data Book; Independent Sector
  6. 6. 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
  7. 7. Nonprofits in South Dakota 8,950 Organizations $8.25 Billion in Income* $15.85 Billion in Assets*2011 SD State GDP=$40.117 BillionSource: TaxExemptWorld.com, US Bureau of Economic Analysis
  8. 8. Nonprofits in Sioux FallsSioux Falls Development Foundation (2012 Community Profile)Major Employers (500+ employees) Type Number Employees Percentage For-Profit 16 20,231 45.77% Nonprofit 7 17,156 38.81%Government 5 6,288 14.23% Other 1 524 1.18% TOTAL 29 44,199 100.0%
  9. 9. Source: 2012 Giving USA
  10. 10. 2011 Giving by Recipient Type Recipient Type $ (billions)Religion 95.88Education 38.87Foundations 25.83Human Services 35.39Public-Society Benefit 21.37Health 24.75International 22.68Arts, Culture, Humanities 13.12Environment & Animals 7.81Foundation Grants to Individuals 3.75Unallocated 8.97TOTAL $298.42 billionSource: 2012 Giving USA
  11. 11. Volunteering in the US • In 2011, the number of volunteers reached its highest level in five years, as 64.3 million Americans volunteered through an organization, an increase of 1.5 million from 2010. • Americans volunteered a total of almost 8 billion hours, an estimated economic value of roughly $171 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
  12. 12. Where the money comes from and where it goes doesn’t change much over time75% of gifts are made Religion and education by individuals – 1.4%- are top causes 1.6% of GDP International causes areCorporate gifts tied to usually at bottom* net revenues (usually Corporate giving tied to 1.2% of pretax profits) HQ and operations locations
  13. 13. 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”
  14. 14. 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)
  15. 15. 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
  16. 16. Thank You! 818 S. Hawthorne AvenueSioux Falls, South Dakota 57104-4537(605) 336-0244 or (888) 4-SUMPTION www.sumptionandwyland.com

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