1. 1
Introduction
The nonprofit sector in McLennan County is comprised
of a vibrant group of individuals committed to the
betterment of society through service and philanthropy.
From homeless shelters to primary health services,
from food banks to educational outreach, nonprofits in
McLennan County provide essential services for many of
our residents as well as entry points for our residents to
become further involved in the community.
In addition to providing dedicated manpower to help
address and solve community problems through coalition
building, leadership development, and provision of
essential services, nonprofits have proven themselves
to be a powerful force with regards to their economic
impact. Economies all over the world are impacted by the
employment nonprofits provide, the spending they engage
in to conduct operations, and the tremendous amount
of social capital they leverage to spur volunteerism for
community benefit.
Overview of the Nonprofit Sector in Texas
As of June 2011, there are 66,229 registered public chari-
ties in Texas (the total number of nonprofit organiza-
tions is much greater), with 40,839 filing with the IRS.
Their revenues and assets are listed as $59,341,350,153
and $127,222,545,857, respectively. In 2006 there were
59,057 nonprofits registered in Texas, 20,655 of which
filed. This represents an increase of 7,172 registered non-
profits, or 12.1% during a 5 year period.
Texas nonprofit organizations employed 403,196 paid
workers during 2008. This represented 3.8% of the total
Texas workforce (governmental, for profit, and nonprofit
sector employees) and 4.6% of the total private workforce
(private, profit seeking businesses and nonprofits). These
workers earned $16.8 billion in wages in 2008, or 3.6% of
the state’s total payroll. Like most of the nation, health
and educational nonprofits, including large hospitals and
universities, constitute most of the areas of nonprofit
employment. Despite the economic recession that began
in 2007, nonprofit employment increased by 3.1% between
2007 and 2008 in most professional fields. 1
However, in most fields where both the for-profit and
nonprofit sector operate, nonprofits lost overall market
share to private providers over the previous six years
(with the Houston-Sugarland-Baytown and Fort Worth-
Arlington MSAs being regional exceptions). This means
that though nonprofit employment and service provision
has increased, private for-profit providers of those same
services (in specific fields) have grown at a much faster
rate, allowing for-profits to capture a greater share of the
revenues and jobs in those fields.
In the state of Texas as a whole, nonprofit average weekly
wages are 7% below for-profit workers and 6% below
state government workers, but 11% higher than local
governmentworkers. Wagegapsinthestateareimproving,
as nonprofit workers were earning 13% below for-profit
workers in 2004. However, there is high variance in
weekly earnings by field for nonprofit workers in general,
and in fields where both the private and nonprofit sectors
operate, nonprofit workers are sometimes more highly
compensated. However, professionals working in the top
tiers of the health and education sectors may skew both of
the figures concerning the wide variance in compensation
as well as compensation by field.
1 This could suggest that the nonprofit sector has a countercyclical
effect on job growth, as nonprofits often are strained to provide more
services in down economies and thus hire more workers in response.
However, this could be due to higher amounts of educational
enrollment that happens in down economies.
State of McLennan Nonprofits 2011
Economic Profile
The purpose of this report is to highlight the
size, scope, and societal benefits provided by the
nonprofit sector, specifically 501(c)3 charitable
organizations, in McLennan County.
i
ii

2. 2
In McLennan County, Nonprofits employ a little over
19,000 people, or 8% of all residents. They employ
11.3% of the private (non-governmental) workforce
in McLennan County and 2.4% of the nonprofit
workforce in the state of Texas.
Considering only 990s from 2009 and 2010, the most
available data, 92.5% of our nonprofits accounted
for $546,821,065 in wages and other forms of
compensation pumped into the local economy.
McLennan County residents also have a great
capacity for giving.
iii
iv
v
vii
viii
Overview of McLennan County
According to the 2010 census, McLennan County has
234,906residents,anincreaseof10%fromthe2000figures
(213,517 individuals). While median household income
is $40,038, 20.7% of all people in McLennan County and
28.8% of all people in Waco live in poverty,2
according to
the latest American Community Survey. Median wages
are $13.98 per hour ($559.20 per week) and as of July 2011
unemployment is at 8.4% in both Texas and McLennan
County specifically.
The Nonprofit Sector in McLennan County
As of June 2011, McLennan County has 784 registered
501(c)3 nonprofits, 255 (32.5%) of which file with the
IRS. Per capita, this means there is approximately 1
charitable nonprofit for every 300 people in McLennan
County. Nonprofit organizations in McLennan County
are fortunate to have 2,944 individuals serving on various
boards of directors, with the average board size at about
12 people. The most common board size is 7 members.
25,632people,orabout11%ofthecounty’sresidents,serve
as volunteers in non-governance capacities. Considering
that the estimated dollar value of 1 hour of volunteerism is
$21.35 for the state of Texas, the economic impact of these
individuals is huge. However, these figures do not capture
the number of nonprofits who operate in McLennan
County but are not registered here (larger organizations
that might have a wider regional or state focus) nor the
countless forms of social organizations committed to
solving community problems that have not registered as
formal organizations. So it is reasonable to assume that
an even greater number of people in McLennan County
are generously donating time in the service to nonprofit
organizations.
2 However, poverty figures are still based on the original indicators
for poverty (what it would take to provide 3 square meals a day under
the USDA’s thrifty food plan x 3, adjusted for family size, number of
children, and a host of other factors) adopted by the Johnson Admin-
istration in the 1960s. Many have questioned the relevance of the
measure as the overall cost of food has decreased as a percentage of
income but housing and medical costs have dramatically increased.
Nonprofit workers represent a higher percentage of the
workforce in McLennan County than many of the other
counties in Texas.
Again, these numbers do not capture larger organizations
with a branch operating in McLennan County nor do they
capture the true economic impact that volunteerism has in
our community. Figures for employment are also highly
skewed due to large levels of employment and higher
salaries for organizations involved in higher education
and hospitals. These organizations, while nonprofits, also
tend to make a large share of their income from program
service fees (tuition, medical billing, etc.) and rely less
than other organizations on contributions from donors.
Charitable Giving in McLennan County
In 2005, of the 91,504 households in McLennan County,
16,002 of those households (17.49%) itemized a deduction
towardsacharitablepurpose. OutofatotalAdjustedGross
Income of $3,825,755,000, a total of $90,409,000 (2.36%
of AGI) was given to charitable causes. In 2006, out of
a reported AGI of $4,018,079,000 in McLennan County,
residents gave $88,830,000 in charitable contributions.
Finances of McLennan County Nonprofits3
Revenue Mix and Expenses
Nonprofits earned $1,177,786,724 in revenues in FY 2009.
$61,817,013, or 5.2% of total revenues, is made up of some
kind of governmental support. Contributions (which
includes government grants but also includes membership
fees, individual donors, and some special events) make
up 10.7% of revenues while program service fees (which
can include government contracts) make up 89.2% of
revenues. However, these figures are highly skewed due
3 This nonprofit finances section only considers data from the
2009 fiscal year (meaning some nonprofits with 990s from 2010 are
excluded). This is largely because the 2009 fiscal year represents the
biggest chunk of available data. Thus, we are only understating total
figures.
vi

3. 3
Figure 1: McLennan County Nonprofits By Type
Education, besides
Higher Education
19%
Arts, Culture
and Humanities
9%
Higher Education
2%
Public and
Social Benefit
15%
International and
Foreign Affairs
1%
Human
Services
Health Related
(Non-Hospitals)
6%
Hospitals
1%
Environment/
Animals
2%
Unknown/
Unclassified
1%Mutual/
Membersh
ip Benefit
0%
Religion-
related
to large hospitals and higher education institutions. For a
more detailed breakdown of revenue sources, see the table
at the end of this document.
Expenses totaled $1,253,306,508 for a net deficit
of $75,527,170 for nonprofits in 2009. 42.9% of all
organizations that filed in 2009 ended with a deficit.
Assets and Liabilities
Despite many nonprofits functioning with a deficit,
overall assets increased in FY 2009 from $13,499,623,750
to $14,955,202,660 for an overall gain of 10.8% over FY
2008. However, liabilities also increased by 15.8% from
$12,587,060,889 to $14,582,009,748. Much of the deficit
then has been absorbed into these organizations’ fund
balance either through drawing down assets or absorbing
more liabilities. Net assets decreased by 58.5% from
$912,562,861 to $378,954,897. Though the McLennan
County nonprofit sector as a whole has considerable
assets, it also has nearly as much liability.
When excluding hospitals and higher education
institutions from the mix, we see that the remaining
organizations actually hold very few of the total assets in
McLennan County (6.4% of total assets at the end of the
fiscal year) and actually lost assets in 2009. While this
group decreased its liabilities by $7,156,354, or 1.5%, it
absorbed much of its deficit in its fund balance with a
decrease of $61,847,342 or 11.1% over the course of the
year.
The marked difference between considering all
organizations and then excluding hospitals and higher
education institutions is striking. When excluding these
organizations, the remaining organizations accounted for
60.9% of the fund balance at the beginning of FY 2009
and only maintained 3.7% of the total liability. Thus,
when looking at net assets of the nonprofit sector, if you
exclude hospitals and higher education institutions (and
thus their liability), nonprofits in McLennan County
hold $493,534,619 in net assets, or more than when you
consider all organizations.
Diversity of Nonprofits in McLennan County
One hundred and seventy-four (22.2%) of registered
organizations are classified as religious organizations by
the National Center for Charitable Statistics (NCCS),
the source of this data. For a further breakdown of
organizations by type, see the graph above.
Conclusions about the State of the Sector in
McLennan County
The Nonprofit Sector in McLennan County leverages
substantial amounts of resources both in terms of dollars
and human capital in order to provide essential services
that improve the quality of life in McLennan County. As
this report shows, it takes the dedicated support of private
philanthropic individuals, entities, and community
volunteers to sustain the impact the sector has in the
community.
The information provided in this report only provides a
snapshot of what is occurring in the sector and does not
reflect all of the complexities that underpin the sector or
the local economy. This snapshot does however illustrate
the economic and social impact of nonprofit organizations
in McLennan County and the diverse contributions of
the sector to McLennan County’s quality of life. Waco
Foundation will continue to explore and share nonprofit
trends in subsequent reports throughout the coming years
and continue to use this and other means to help evaluate
the impact of the sector in our community as well as the
role that we at Waco Foundation can play in multiplying
that impact.

4. 4
Notes on the Methodology:
Waco Foundation purchased 2 datasets from the National
Center for Charitable Statistics to conduct this analysis:
the June 2011 IRS Business Master File and the Core 2009
PC File. The Business Master File provided us with 784
registered charitable 501(c)3 nonprofit organizations
while the Core File provided us with key financial
indicators for 276 filing organizations, both private
charities and foundations. A few of those organizations
were found to not be currently registered with the IRS
and were excluded from this analysis. 3 organizations
did not have 990s before the 2007 fiscal year, and they
were excluded from all aspects of financial and personnel
analysis. Where more current financial information could
be found than the NCCS data from a more current 990
(through use of Guidestar), it has been included in the
analysis. The numbers of different types of returns as well
as the percentage they make up in the data are included in
the table on page 5.
The NCCS also classifies charities by type, and some of
these classifications were revised. The Brazos Higher
Education Authority, Inc. and its affiliates were classified as
“Education” organizations rather than “Higher Education”
organizations despite their extensive involvement in
student loans for higher education. The same is true for
organizations that provide support services to Baylor and
its alumni. Thus, they were reclassified for the purposes of
this analysis. Organizations related to 2 major nonprofit
hospitals in the county were also reclassified as “Hospital”
organizations if they were not classified as such already.
Whetherthestatisticsandfiguresarereferringtoregistered
organizations vs. filing organizations should be clear from
the language of this report.
There are also limitations to the data used due to the nature
of the 990. First of all, like all documents, it is subject to
reporting errors. It also does not capture organizations
which operate in McLennan County but are not registered
here. The Form 990 covers only nonprofit organizations
and does not classify nonprofit organizations by the North
American Industrial Classification System(NAICS). As
such, it is not possible to use these data to compare
nonprofits to for-profits or government without
considerable difficulty. Form 990 treats certain key
variablesinamannerthatwasdevelopedforotherpurposes
but is not well suited for studying the behavior of nonprofit
institutions. Thus, for example, it does not distinguish
between market sales, on the one hand, and government
contracts and reimbursement payments (e.g., Medicaid)
on the other. This can lead to gross under-statements of
the extent of government support in the revenue base of
the nonprofit sector, which can lead, in turn, to serious
policy errors. Similarly, the 990 form groups government
grants together with private philanthropic contributions,
thus potentially overstating the extent of philanthropic
support. These limitations are well understood and are
taken into account when interpreting the data.
Research compiled by public policy analyst
Zacary Bryan
*
viv

5. 5
990 Fiscal Year Number of 990s Percentage of Total 990s
Before 2007 3 1.2%
2007 6 2.4%
2008 10 3.9%
2009 175 68.6%
2010 61 23.9%
Total Number of 990s 255 100%
End Notes
i National Center for Charitable Statistics, available at http://nccsdataweb.urban.org/tablewiz/tw_bmf.php.
This includes the most up to date data from the IRS Master Business File, after the recent revocations an
nouncement by the IRS.
ii Texas Nonprofit Employment Update by Lester M. Salamon and StephanieLessans Geller (Baltimore: Johns
Hopkins Center for Civil Society Studies,July 2010) Available at http://www.ccss.jhu.edu/pdfs/NED_
Bulletins/States/NED_Bulletin35_Texas_2010.pdf. Their data comes from the Quarterly Census of Employ
ment and Wages (QCEW) conducted by the Bureau of Labor Statistics. Only nonprofit organizations with
four or more employees are required to fill out the survey, so this data may exclude smaller nonprofits.
iii From 2005-2009 American Community Survey.
iv Bureau of Labor Statistics, Quarterly Census of Employment and Wages. Available at http://www.bls.gov/
cew/. Accessed September 1, 2011.
v Independent Sector, Value of Volunteer Time. Available at http://www.independentsector.org/volunteer_
time. Accessed August 5, 2011.
vi Ibid, Texas Nonprofit Update. Only Smith, Bell, and Bowie Counties have higher levels of nonprofit em -
ployment than McLennan County.
vii Taken from an overview of McLennan County given by the National Center for Charitable Statis
tics whose source is an IRS dataset from 2005, available at http://nccsdataweb.urban.org/PubApps/
geoShowVals.php?id=305621&code=48309
viii From Adjusted gross income and charitable giving by county as reported on IRS tax return Form 1040,
Schedule A, by households that itemize deductions, from IRS Tax Return Summary Files (1997 to 2006)
http://nccsdataweb.urban.org/tablewiz/cg.php.
viv For more information on McLennan County Nonprofits, please refer to the graphs and charts at the end
of this document.

6. Source: NCCS Database (IRS Business Master File June 2010) Years 2005-2010
McLennan County Nonprofits by Type
NTEE Major Group 12 Number of registered
nonprofits
Percentage of the
whole
Arts, Culture and Humanities 70 8.9%
Higher Education 12 1.5%
Education, besides Higher Education 147 18.8%
Environment/Animals 18 2.3%
Hospitals 7 0.9%
Health Related (Non-Hospitals) 47 6.0%
Human Services 167 21.3%
International and Foreign Affairs 11 1.4%
Public and Social Benefit 120 15.3%
Religion-related 175 22.3%
Mutual/Membership Benefit 3 0.4%
Unknown/Unclassified 7 0.9%
Total 784 100.0%

7. McLennan County Nonprofits Financial Data
Table 1: Gross Receipts and Human Capital
Gross
Receipts
# of voting members on
BOD
Total Number of
Employees
Volunteers Estimated or
Actual
Total
Salaries
Totals 2,007,713,226 2,944 19,056 25,632 546,821,065
Average 7,967,115.976 12.16528926 89.46478873 220.9655172 2,189,836.56
Median 220,108.5 9 1 20 14,259
Mode #N/A 7 0 0 0
Totals Excluding Higher Ed and Hospitals 396,388,108 2,693 5,159 23,296 108,380,994
Average Excluding Higher Ed and
Hospitals
1,679,611 12 26 233 463,167
Median Excluding Higher Ed and Hospitals 198,999 9 1 25 14,850
Mode Excluding Higher Ed and Hospitals #N/A 7 0 0 0
Table 2: Revenue and Expenses
Government
Grants and
Contracts
Total Contributions Program
Service
Revenue
Total
Investment
Income
Net Income From
Special Events
Total
Revenue
Total
Expenses
Revenue Less
Expenses
Totals 61817013 125946291 1050977741 17513543 4117501 1198555076 1253306508 -75527170
Average 490611.2143 719693.0914 6005587.091 100077.3886 23528.57714 6730209.851 7161751.474 -431583.8286
Median 0 59145 7745 582 0 236406 207037 3451
Mode 0 0 0 0 0 #N/A #N/A #N/A
Totals Excluding
Higher Ed and
Hospitals
61,397,096 120,264,835 79,425,248 19,100,675 3,914,991 222,705,749 217,665,237 -14,457,323
Average Excluding
Higher Ed and
Hospitals
491,177 678,684 447,997 107,684 23,069 1,134,474 1,228,002 -80,823
Median Excluding
Higher Ed and
Hospitals
0 55,950 1,571 306 0 176,230 168,573 3,696
Mode Excluding
Higher Ed and
Hospitals
0 0 0 0 0 0 #N/A #N/A