1. PHILANTHROPY AND THE NONPROFIT SECTOR James M. Ferris March 10, 2004

2. Definitions, Boundaries, and Scope The Philanthropic Dimension of the Nonprofit Sector Trends in Philanthropy

3. Definitions, Boundaries, & Scope

4. What Is the Nonprofit Sector? Formal organizations that are neither public or for-profit. Private, self-governing, voluntary, non-profit distributing. Exempt from corporate income taxes. Diverse, heterogeneous group.

5. Terminological Thicket Nonprofit Not-for-profit Voluntary Independent Charitable Nongovernmental Philanthropic Third Sector Civil Society Social Benefit

6. The Nonprofit Sector in Context Relative Size in terms of: –Organizations –National Income –Employees –Earnings

7. Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002. Distribution of Organizations by Major Sector, 1998 Total number of organizations = 27.7 million

8. Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002. Distribution of National Income by Major Sector, 1998 Total national income = $6.9 trillionTotal national income = $7.1 trillion

9. Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002. Distribution of Employees by Major Sector, 1998 Total national employees = 144 millionTotal national employees = 154 million

10. Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002. Distribution of Paid Earnings by Major Sector, 1998 Total earnings = $4.8 trillionTotal earnings = $5.0 trillion

11. The Public Benefit Nonprofit Sector The nonprofit sector is comprised of 27 types of organizations in the Internal Revenue Code. Of particular interest are the public benefit organizations: –501(c)(3): Religious, charitable, educational, etc. –501(c)(4): Social Welfare. Comprise the great majority of the sector Common perception of the sector

12. Distribution of National Income in Nonprofit Sector, 1998 Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002. Total nonprofit national income = $325 billionTotal nonprofit national income = $477 billion

13. Philanthropy & the Nonprofit Sector “The task of comprehending the nonprofit sector is further complicated by a widespread failure to recognize the important distinction between philanthropy, on the one hand, and the private nonprofit sector, on the other. In many accounts these two terms are treated interchangeably when in fact one is really just part of the other.” Lester Salamon, America’s Nonprofit Sector

14. Philanthropy & the Nonprofit Sector The nonprofit sector is the set of organizations that are private but serve public purposes – advancement of health, education, scientific progress, social welfare or the free expression of ideas. Philanthropy is the giving of time or money for public purposes. It is an important resource for nonprofit organizations. –“Venture capital” for social change.

15. Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002. Sources of Nonprofit Revenue, 1997 Total Revenue = $665 billion

16. Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002. Sources of Nonprofit Revenue, 1997 (excluding health services) Total Revenue = $339 billion

17. Changing Patterns Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.

18. Changing Patterns (excluding health services) Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.

19. Changing Patterns: Health Services Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.

20. Changing Patterns: Arts and Culture

21. Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002. Changing Patterns: Education and Research

22. Industry Allocation of Revenues, 1997 Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002. Total Revenue = $665 billion

23. Industry Allocation of Revenues, 1977 Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002. Total Revenue = $111 billion

24. Industry Allocation of Revenues, 1977 and 1997 Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.

25. Roles of the Nonprofit Sector Service Delivery Advocacy Community Building Value Guardian

26. The Philanthropic Dimension of the Nonprofit Sector

27. Private Giving, 2002 Source: Giving USA, AARFC Trust for Philanthropy, 2003. Total Giving = $241 billion

28. Changing Sources of Private Giving Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002; Giving USA, AARFC Trust for Philanthropy, 2003.

29. Changing Sources of Private Giving Total giving = $21 billionTotal giving = $48.6 billion

30. Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002; Giving USA, AARFC Trust for Philanthropy, 2003. Changing Sources of Private Giving Total giving = $98.8 billionTotal giving = $203.4 billion

31. Giving By Recipient Type, 2002 Source: Giving USA, AARFC Trust for Philanthropy, 2003. Total Giving = $241 billion

32. Private Giving as % of Income Source: Giving USA, AARFC Trust for Philanthropy, 2003.

33. PHILANTHROPIC INSTITUTIONS Foundations Federated Fundraising Appeals Donor Advised Funds Public Grantmaking Charities

34. FOUNDATIONS Philanthropic foundations are an important element of the American nonprofit landscape. Mechanism through which philanthropic dollars flow to nonprofit organizations, typically from endowments. They are of particular interest given their link to concentrated wealth and the impact of their grantmaking.

35. Foundations, 2001 61,180 grantmaking foundations, with $477 billion in assets, and $30.5 billion in giving. A nearly three-fold increase in assets and over a three-fold increase in giving since 1991.

36. Foundation Growth, 1991-2001 NumberAssets (b)Giving (b) 199133,356$162.907$9.211 199540,140$226.736$12.261 199950,201$448.610$23.321 200161,180$476.789$30.502

37. Size Concentration: 2001 The largest 43 foundations – $1 B or more in assets, hold 34.8% of assets and 23.8% of giving. The largest 214 foundations – $ 250 million or more in assets, hold assets 51.4% of assets and 47.4% of giving. Foundations with under $10 million in assets (56K+) hold 13.8% of assets and 25.2% of giving.

38. Regional Concentration: 2001 State% of Giving% of Assets New York18.817.2 California11.713.9 Pennsylvania 5.35.2 Washington 5.18.3 Texas 4.95.1

39. Foundation Types Private Independent Foundations –Family Foundations Corporate Foundations Operating Foundations Community Foundations

40. Industry Structure: 2001 Foundation Type NumberAssetsGiving Independent89.2%84.6%77.7% Corporate3.5%3.3%10.6% Community1%6.4%7.9% Operating6.3%5.7%3.6%

41. Funding Priorities, 2001 (percent of total) Education 26.8 Health 20.5 Human Services 13.8 Arts and Culture 12.2 Public/Social 10.9 Environment 6.2 International 2.4 Science/Tech 2.9 Social Science 2.1 Religion 2.1 Other.1