Economic engine – Mapping philanthropy

By Todd Cohen

Charity is growing rapidly and helping to drive the U.S. economy, a new study says.

The U.S. had 1.2 million charitable, social-welfare and religious groups that employed 10.9 million paid workers and 5.8 million volunteers in 1998, according to The New Nonprofit Almanac and Desk Reference, a publication of Independent Sector and the Urban Institute.

Including the value of volunteer time, those “independent sector” groups accounted for an estimated 6.1 percent of national income in 1998, or $443.6 billion.

Their paid workers represented 7.1 percent of the U.S. workforce and, combined with volunteers, accounted for 10.8 percent of total national employment.

And those groups, along with 400,000 other tax-exempt organizations such as chambers of commerce and credit unions, had operating expenses of $784.6 billion, or 8.5 percent of the U.S. gross domestic product.

Annual revenue for independent-sector groups totaled $665 billion in 1997 – 38 percent of it from private payments for dues and services, 31 percent from government contracts, 20 percent from private contributions and 11 percent from other sources such as investments, income and dividends.

Health services, along with education and research, shared two-thirds of that revenue.

Estimated revenue for health services alone totaled $326 billion in 1997, or nearly half of total revenue for independent-sector groups, while health services accounted for 43 percent of all paid workers and 54 percent of total wages and salaries for independent-sector groups.

Private charitable giving in the U.S. grew to nearly $190 billion in 1999, with gifts from individuals and bequests accounting for 85 percent of all private giving.

Gifts from individuals grew by more than $10 billion a year between 1995 and 1998.

Private contributions to independent-sector groups totaled $132 billion in 1997, while the value of time volunteered by individuals totaled $134 billion.

Independent-sector groups employed 8.7 percent of all paid employees in the U.S. economy in 1998, and the entire nonprofit sector employed 9.3 percent of all paid employees.

In the 10 years through 1997, the number of charitable 501c(3) organizations alone grew to 734,000, increasing at an annual rate of 5.1 percent, or more than double the rate of growth for the business sector.

Nearly three-fourths of charitable organizations reported expenses of less than $500,000 in 1998.

Employment at all nonprofits – charities, social-welfare groups and religious congregations, along with other tax-exempt groups such as chambers of commerce – grew 4.2 percent a year between 1987 and 1992, compared to 1.2 percent for total nonagricultural employment.

The dollar value of volunteer time in 1998 grew to nearly $226 billion for the nonprofit, government and business sectors combined, with volunteers accounting for one-third of the independent sector’s national income.

The South led other regions of the U.S. in the share of public charities filing Form 990 with the Internal Revenue Service in 1998, and in growth both in public support and total assets for charitable organizations between 1992 and 1998.

The South had 28 percent of public charities filing Form 990 –- those with $25,000 or more in gross annual receipts — followed by the Midwest, 24 percent; the Northeast, 23 percent; and the West, 22 percent.

Public support for charities in the South grew by 77 percent during the period, while total assets for charitable groups grew 89 percent.

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