Charities Account for 5.2% of the Economy, Study Finds

Nonprofit organizations accounted for 5.2 percent of the nation’s economic output and paid 8.3

percent of all wages and salaries in the United States in 2005, according to a new report by the National Center for Charitable Statistics at the Urban Institute.

About 1.4 million nonprofit groups were registered with the Internal Revenue Service in 2004, the most recent year for which complete data are available. When religious congregations are added in, the total number of nonprofit organizations comes to nearly 1.6 million. (Roughly half of the nation’s 350,000 religious groups register with the IRS, although they are not required to do so.)

In 2005, individuals, corporations, and foundations gave $260-billion in donations, and 29 percent of Americans volunteered.

Those are among the findings from the Nonprofit Almanac 2007. The center has released highlights from the new almanac — the first version published since 2002. (See tables showing key findings.) The complete almanac is scheduled to be published in January.

Nearly half of the nonprofit organizations registered with the IRS received at least $25,000 in revenue in 2004, which means they were required to file a federal income-tax return. (Religious congregations are exempt from the filing requirement, regardless of their size.) Those groups reported total revenue of $1.4-trillion and total assets of $3-trillion, according to the almanac.

The vast majority of those funds, however, were received and held by a small number of nonprofit groups. Just 0.1 percent of nonprofit organizations take in $500-million or more in revenue annually, yet they account for 27.2 percent of both total income and assets. In fact, the 0.6 percent of all nonprofit groups that earn revenue of $100-million or more annually received 52 percent of all income and held 57 percent of all assets in the nonprofit world.

Small Groups

More than four-fifths of all groups that filed tax returns received less than $1-million in revenue in 2004. The combined assets of those organizations accounted for 4.4 percent of the total.

Hospitals make up just 1.1 percent of all nonprofit groups, but they receive by far the biggest share of revenue of any type of nonprofit organization, at 42.5 percent.

Organizations that provide human services account for the largest number of groups (34.5 percent), but take in just 13.6 percent of revenue. Colleges and universities also account for a large share of all nonprofit revenue (11.6 percent), even though they account for just 0.6 percent of all organizations.

The rate of volunteering by Americans increased slightly from 2002 to 2005, rising by less than 2 percent.

Nearly a third of all women volunteered their services in 2005, compared with a quarter of all men, both up slightly from 2002.

Among racial and ethnic groups, the biggest increase was among blacks, whose rate of volunteering rose from 19.1 percent to 22.1 percent. Whites were the most likely to offer their services to charity (30.4 percent); Hispanics the least likely (15.4 percent).

A free copy of the highlights of the Nonprofit Almanac is available online.