The document summarizes statistics about the nonprofit sector in the United States, South Dakota, and Sioux Falls. It finds that the nonprofit sector makes up a significant portion of the economy but lacks comprehensive data collection. Nationally, 75% of nonprofits have under $1 million in revenue, and giving has remained around 2% of GDP and income. In South Dakota, there are over 9,000 nonprofits with $8 billion in income. In Sioux Falls, nonprofits make up 40% of major employers and volunteering rates are at their highest levels. The document also discusses trends in governance, accountability, and regulation of nonprofits.

1. The Nonprofit Sector
Leadership Sioux Falls 28
April 2, 2014

2. Topics We Will Cover
• Statistics on Nonprofits and Philanthropy
– US
– South Dakota
– Local
• Trends:
– Governance
– Accountability
– Public Perception
– Regulation

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 nonprofits
The Nonprofit Almanac
2008, Urban Institute

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. 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

7. 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

8. 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

9. 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%

10. Source: 2013 Giving USA

11. Source: 2013 Giving USA

12. 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

13. 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

14. 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”

15. 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)

16. 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

17. Thank You!
818 S. Hawthorne Avenue
Sioux Falls, South Dakota 57104-4537
(605) 336-0244 or (888) 4-SUMPTION
www.sumptionandwyland.com