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.
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
6.
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%
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