When we believe something to be true but don’t have the data to support that idea, what happens when we do find the hard evidence? Two things: either we find out we were wrong after all or . . . we were right and now we have the facts to put into a grant proposal.
Rick Cohen mined metric tons of data to bring us some newly published, meaningful facts about the nonprofit sector that we should be aware of . . . and use.
1. It’s official: we’re underpaid.
Nonprofit managers make $34.24/hour on average, compared with $36.18 in comparable state government positions, $39.75 in federal government, and $41.86 in private sector positions, according to the Bureau of Labor Statistics National Compensation Survey. Office and administrative support staff in the nonprofit sector also come up short: average hourly earnings of $15.46 compared to $15.53 in the private sector, $15.92 in state government, and $16.76 in local government. On the other hand, the relative gap among positions is smaller in our sector. So . . . should we be demanding more from our funders — not because we’re greedy but for the sustainability of our work?
2. Maybe I should look for a job in local government: Nonprofit human services workers are paid about the same as in the for-profit sector, but considerably less than in government. So . . . With so much of nonprofit human services supported by government money, why don’t government contracts provide for wages that are comparable to what they pay their own staff for similar jobs? And, why don’t we in the nonprofit sector pay more attention to low-wage employees, themselves the crucial, person-to-person mission delivery systems?
3. More than one-third of the nonprofit sector are not 501(c)3s: The Teamsters Union, the National Football League, the Chamber of Commerce and the Board of Realtors are all nonprofits of the “other c’s” such as 501(c)6 and 501(c)4. While only (c)3s can can receive donations that are tax-deductible to the donor, these other nonprofits don’t pay corporate income tax. Since these organizations benefit from tax-exempt status, why don’t we do more to make their finances transparent, and hold them accountable to the public purpose?
4. There are more 501(c)3s than most people realize: According to the Internal Revenue Service Data Book there are 1,186,915 501(c)3s, up 13.5% since 2005. So . . . Is the potential power of so many organizations being realized? And word is that despite the recession, the rate of formation of public charities hasn’t declined much in recent months. So . . . perhaps nonprofit creation isn’t driven by the availability of funds, but by seeing a need?
5. But many registered nonprofits are either miniscule in size or no longer exist. The Internal Revenue Service estimates that 222,600 nonprofits with revenues under $25,000 will file the 990-N e-postcard in 2009, but it’s possible that just as many are no longer in business. Nonprofits with revenues under $25,000 are now required to file the 990-N, a sort of “proof of life” annual form that should help adjust inflated numbers of nonprofits to more accurate figures. Failure to file for three years running gets you kicked off the IRS rolls of registered nonprofits. So . . . if you’re a small nonprofit, be sure to file your 990-N!
6. And hospitals and universities have most (55%) of the nonprofit sector’s money: Nonprofit hospitals are only 1% of 501(c)3s, but have 41.5 % of our sector’s revenue! While there are only 2,640 higher education institutions, they have average revenue of $159 million each, totaling 13.8% of the sector’s revenue.
And funding for hospitals doesn’t include funding that goes to mental health, disease-related charities, or medical research. So . . .that leaves 35.4% of all nonprofit revenues to be shared by the remaining 625,193 reporting nonprofits engaged in arts, culture, and humanities, environmental quality and protection, diseases and disorders, crime reduction, legal advocacy, employment and jobs, food, agriculture, and nutrition, mental health, medical research, housing and shelter, public safety, recreation and sports, youth development, human services, civil rights and social action, community improvement and development, science and technology research, public and society benefit, religion and spiritual development, and mutual and membership benefit work.
7. Part Timers R Us: Almost one in four (22 – 24%) of nonprofit employees are part-time, a much higher rate than the overall average of around 18% of all U.S. workers. So . . . is it a reflection of flexibility that nonprofits provide their willing staff, or does it reflect a lack of funding to afford them as full-time staff?
Sources: the nonprofit number is from unpublished Current Population Survey (CPS) data from the U.S. Bureau of Labor Statistics; the overall part-time workforce numbers come from published CPS information.
8. There are twice as many employees in the nonprofit sector than in the construction industry . . . and we need health insurance, too. There are 15.4 million workers employed in the tax exempt sector, more than twice as many as in construction (6.4 million), according to the Department of Health and Human Services. The tax exempt data doesn’t distinguish between (c)3s and other 501’s), but Lester M. Salamon of the Johns Hopkins University Center for Civil Society Studies suggests 9.4 million workers (of his lower estimate of 12.8 million total) comprise the “charitable” part of the nonprofit sector.
Although national health reform has moved toward giving tax benefits to small business employers who provide their employees with health insurance, nonprofits have been unassisted by this effort since we don’t pay corporate income taxes. Nonprofit advocacy efforts resulted in the insertion of some benefits for small nonprofit employers in the draft Senate bill, but legislators and policy-makers are more prone to ignore nonprofit employers and their 12 to 15 million workers.
9. United Way donations are shrinking: 57% of United Ways reported declines in donations from last year, while just 32% showed increases. The largest loser was the Erie County, Pennsylvania United Way, which saw donations plummet 67.5%. So . . . the United Ways’ role of providing substantial, unrestricted funds to human services continues to decline . . . as even more people apply for help.
10. Community foundations — the highest growth area in philanthropy — have a lot less money, too. Investment returns decreased by 27% (median) in a survey by the Council on Foundations. So . . . they’ll have less money to put into grants for the next year or more.
11. And total charitable giving has decreased by the largest percentage in five decades. According to Giving USA, giving by individuals, corporations and foundations has decreased by 5.7% between 2007 and 2008. So . . . because of the lag time between financial changes at foundations and grant award dates, and the likelihood of a “jobless recovery,” things won’t be turning around any time soon.
12. Kansas City here I come . . . they got some crazy little donors there and I’m gonna get me some . . . Individual giving in Kansas City, Missouri increased by 128% . . . compared with the national average of 30% from 1997 to 2007. Kansas City donors — the nation’s most generous — gave $3,375 in 2007, compared with $2,247 nationally. So . . . Fats Domino was right (again).
Blue Avocado columnist Rick Cohen appears in every other issue (that is, monthly). The former Executive Director of the National Committee for Responsive Philanthropy, he is National Correspondent for Nonprofit Quarterly. He is underpaid.