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Nonprofit sector surging

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Nonprofits in the U.S. are big business, and the finances of charitable nonprofits in particular are growing much faster than the national economy, a new report says.

Over 1.4 million nonprofits, including public charities, foundations and other tax-exempt groups like trade associations and labor unions, were registered with the IRS in 2004 and accounted for 5.2 percent of gross domestic product and 8.3 percent of wages and salaries paid in the U.S., says The Nonprofit Sector in Brief.

Nonprofits overall accounted for $1.4 trillion in revenue and $3 trillion in assets in 2004, says the report, which features highlights from the Nonprofit Almanac 2007 that will be published soon by the National Center for Charitable Statistics at the Urban Institute.

While the number of nonprofits overall recognized by the IRS grew 27 percent from 1994 to 2004, and the number of those reporting to the IRS grew 25.3 percent, the number of public charities grew 64.7 percent percent, to over 845,000, and the number of public charities reporting to the IRS grew 62.7 percent, to over 299,000.

Individuals, corporations and foundations in 2005 gave $260 billion in charitable contributions to nonprofits, and 65 million Americans, or 29 percent of U.S. adults, volunteered.

FINANCES

From 1994 to 2004, revenues, expenses and assets of public charities that reported to the IRS all grew much faster than the gross domestic product.

Compared to an increase of less than 37 percent in GDP for the period, revenues of public charities reporting to the IRS grew 57.1 percent, adjusted for inflation, to over $1 trillion, while their expenses grew nearly 57 percent, to $981 billion, and their assets grew 88.3 percent, to over $1.8 trillion.

For all nonprofits, assets grew 90.7 percent, to nearly $3 trillion.

FIELDS OF INTEREST

Human-services organizations were the most common type of public charity, accounting for 35 percent of all organizations, compared to 18 percent for education groups, 13 percent for health-care groups, 12 percent for public and society-benefit groups, and 11 percent for arts, culture and humanities groups

But while they represented over one-third of all public charities, human-services groups accounted for less than 14 percent of the revenues of all public charities and less than 12 percent of their assets.

And while health-care groups represented a much smaller share of the sector than did human-services groups, health-care groups accounted for a much bigger share of overall revenue, 58.7 percent, and of overall assets, 41.7 percent.

Higher-education institutions alone represented only 0.6 percent of the sector but accounted for 11.6 percent of its overall revenue and 22.3 percent of its assets.

REVENUE

Fees for services and sales of goods – such as patient revenues for hospitals, including Medicare and Medicaid reimbursements; tuition at colleges and universities; theater-ticket sales; rent from low-income housing; and sales at thrift or museum shops — accounted for 71 percent of revenue for public charities that reported to the IRS.

Private contributions, including contributions from individuals, private foundations and corporations, accounted for 12.5 percent of overall revenue, while government grants accounted for 9 percent.

Individuals accounted for 83 percent of all contributions, compared to 11 percent from foundations and 5 percent from corporations.

GIVING
Adjusted for inflation, private charitable contributions from 2000 to 2005 to public charities reporting to the IRS and to religious congregations was flat, compared to an expansion of 12 percent in the U.S. economy and an increase of over 7 percent in total personal income, the report says, citing the Giving USA Foundation.

Private contributions in 2005 totaled $206.3 billion. Here’s where the contributions went:

* 35.8 percent to religious organizations

* 14.8 percent to education

* 9.7 percent to human services

* 8.7 percent to health care

* 8.3 percent in gifts to foundations

* 5.4 percent for public and societal benefit

* 5.2 percent to arts, culture and humanities

* 3.4 percent to environment and animals

* 2.5 percent to international and foreign affairs

* 8.7 percent not allocated

VOLUNTEERING

In 2005, 28.8 percent of adults in the U.S. volunteered, roughly the same as in each of the previous three years.

Americans ages 35 to 44 were most likely to volunteer, with 34.5 percent of that age group saying they volunteered, compared to 24.4 percent of those ages 16 to 24, and 24.8 percent of those ages 65 and older.

Women were more likely to volunteer than men, with 32.4 percent of women and 25 percent of men saying they volunteered.

Among whites, 30.4 percent volunteered, compared to 22.1 percent of African Americans, 20.7 percent of Asians and 15.4 percent of Hispanics or Latinos.

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