The Nonprofit World: Financial and Employment Trends

JOB MARKET

Nonprofit organizations in the United States spent nearly $785-billion in 1999, accounting for

8.5 percent of the nation´s gross domestic product, according to data released last week. When inflation is taken into account, that is an increase of $189-billion in a decade.

The growth in spending is in part a reflection of the number of nonprofit organizations that have been created in the last decade, according to The New Nonprofit Almanac and Desk Reference. It noted that the nation had more than 1.2 million charities, foundations, and religious groups in 1997, an increase of 31 percent over 10 years.

The almanac focuses on groups it calls independent-sector organizations: those operating under Sections 501 (c) (3) and 501 (c) (4) of the Internal Revenue Code plus religious organizations, which are not required to file with the Internal Revenue Service.

Most of the data are for 1997 or 1998, but a few figures are more recent. The almanac is published by the Urban Institute´s Center on Nonprofits and Philanthropy, a think tank in Washington, and Independent Sector, a Washington organization that represents charities and foundations.

Among other key findings:

• In 1998, one of every 12 paid employees in the United States worked for an independent-sector organization. Such organizations had 10.9 million workers, compared with 8.6 million a decade earlier. Those independent-sector employees made up 9.3 percent of all nonagricultural workers in the United States in 1998.
• Those employees received $258-billion in wages in 1998. That is a fivefold increase from 1977, when such workers received $47-billion. Off all independent-sector fields, health services saw the largest increase from 1977to 1998 in the percentage of wages it pays, jumping from 48.8 percent to 54.3 percent. Social and legal services and arts and culture organizations also saw modest increases in their shares of the total independent-sector wages. Education and research groups declined as a percentage of the total wages paid by independent-sector groups from 1977 to 1998, from 28.3 percent to 20.8 percent. Civic, social, and fraternal organizations and foundations also saw modest dips in their percentage of total independent-sector wages. In both 1977 and 1998, religious groups paid 8.8 percent of all independent-sector wages.
• Seven of 10 workers at independent-sector organizations are female. Social-services and legal-services groups, as well as health-care groups, have the highest percentages of female workers, while arts and religious groups have the lowest. Of the total work force in the United States, 46 percent are women.
• Blacks represent 14 percent of all workers in independent-sector groups, and Hispanics 7 percent. In all areas of the economy, 11 percent of all workers are black and one in 10 is Hispanic.
• The average annual turnover rate for the nonprofit field for the years 1992 to 1997 was 3.1 percent, higher than the 2.7 percent rate the almanac calculated for businesses and 1 percent for government employers in the same time period.
• Health-care groups produce nearly half of all revenue earned by independent-sector groups. Education and research organizations had the second-largest share of revenue, at 18 percent. Social-services and legal-services groups accounted for 12 percent of revenue.
• Total revenue of independent-sector groups, which was $665-billion in 1997, grew by an average of 2.7 percent a year from 1992 to 1997. From 1987 to 1992 the growth was more substantial — an average of 7.2 percent a year, compared with a growth rate of only 1.2 percent in the total nonagricultural economy during the same period. The almanac said changes in government spending patterns, especially in the health-care field, were the chief reason for the slowdown in revenue growth.
• Independent-sector groups are relying less on private contributions to pay their expenses than they did in the past. Private gifts financed one-quarter of expenditures in the 1990s; in the 1960s, such gifts financed more than 40 percent of operating expenses. More and more, charities — especially those in education, health, or social services — rely on government funds.
• Nearly 110 million Americans volunteered in 1998, contributing an average of 3.5 hours a week to community service. Eighty million Americans were volunteering in 1987; they contributed an average of nearly five hours a week.

Copies of The New Nonprofit Almanac and Desk Reference, which is being published by Jossey-Bass, are available for $38 ($28 for Independent Sector members).

A summary of the key findings, along with ordering information, is available at Independent Sector´s Web site, and the Web site of the Urban Institute.

More information can be obtained from Independent Sector, 1200 18th Street, N.W., Suite 200, Washington, D.C. 20036; (888) 860-8118.