Nonprofit Sector Grew Faster than Business, Government

November 6, 2012 — Nationally, the nonprofit sector's growth in total wages and employees outpaced government and business between 2007 and 2010, but nonprofits as a whole are spending more than they generate, according to newly published information.

According to The Nonprofit Almanac 2012, published last week by the Urban Institute Press, from 2007 to 2010, nonprofit employment grew 4% and wages increased 6.5%, while they decreased in the business sector by 8.4% and 8%, respectively, and increased only 1% and 4.8%, respectively, for government.

Nonprofit organizations did not escape the recession unscathed. Private giving was down 11% from 2007 to 2010. While corporate giving dropped 13% between 2007 and 2008, by 2010 it had surpassed pre-recession levels.

However, in eight of the past 10 years, the nonprofit sector spent more than it earned. The gap between revenues and outlays was $65 billion in 2008, 2009, and 2010.

"The growth trends should not mask the cutbacks and hardships that nonprofits, especially small ones, have experienced these past few years. Some closed their doors during the recession; others cut staff, wages, or activities to stay afloat. Still, the nonprofit sector continues to show its resilience and has become a larger part of the U.S. economy since 2008," said Thomas Pollak, director of the Urban Institute's National Center for Charitable Statistics.

The Almanac shows that
  • An estimated 2.3 million nonprofit organizations operated in the United States in 2010. Some 1.6 million nonprofits were registered with the Internal Revenue Service (IRS), an increase of 24 percent from 2000. Of these, only 40% (about 618,000) were required to file a financial return with the IRS because they collected more than $50,000 in gross receipts in 2010.

  • Arts, education, health care, human services, and other types of organizations to which donors can make tax-deductible donations, account for nearly two-thirds of all registered nonprofits. The number of registered public charities grew 42% over the decade, faster than other types of nonprofits.

  • The nonprofit sector contributed $804.8 billion to the U.S. economy in 2010, 5.5% of the gross domestic product.

  • In 2011, private charitable contributions, which include giving to public charities and religious congregations, totaled $298.4 billion.

  • In 2011, 26.8% of adults volunteered with a nonprofit. Volunteers contributed 15.2 billion hours, worth an estimated $296.2 billion.