By Andy Carroll, Exponent Philanthropy
I regularly explore trends influencing philanthropy by spotlighting articles, reports, and essays in the media. I cast a wide net, venturing beyond philanthropy and traditional topics to consider a variety of ideas, innovations, debates, and critiques. Read previous posts in the series
Surprising Facts About the Nonprofit Sector
Urban Institute conducts research each year on public charities, giving, and volunteering. The following highlights from Bloomerang are from the 2015 issue of Urban Institute’s “Nonprofit Sector in Brief” series.
- Only 35% of registered nonprofits file Forms 990, 990-EZ or Form 990-PF with the IRS. This leaves a vast number of nonprofits and their contributions to our society unnoticed. Although they are the smallest of the registered nonprofits, their impact can be felt, and they are the future high-growth nonprofits of the future.
- Only 5.3% of public charities are $10 million or more in size.
- Nearly 50% of charities’ total revenue comes via fees for services and goods; charitable giving accounts for 13%. These fees include ticket sales, tuition, hospital fees, membership fees, and product sales. The second largest group is government funding (35%).
Nonprofits Excel at Encouraging “Low Propensity” Voters to Go to Polls
Profiling a new study, the Chronicle of Philanthropy’s Alex Daniels writes, “Nonprofit get-out-the-vote efforts led to significantly higher voter participation rates among minorities and the poor.”
“Nonprofit VOTE tracked 28,881 people who registered to vote or signed a pledge to vote at 129 nonprofits in nine states during the 2014 midterm elections. The nonprofits, which all had 501(c)(3) tax-exempt status, included community health centers, social-service agencies, and advocacy organizations. More than half of those people were identified as ‘low propensity’ voters, meaning they were not expected to cast ballots, according to Catalist, a political data management firm. The study found that 18% of those voters did cast a ballot after being reached by a nonprofit, compared with an overall 8% turnout for low-propensity voters in the nine states studied. The study showed that nonprofit voter-outreach efforts worked with people who had not been swayed to vote in previous elections by campaign operations and political parties, said Julian Johannesen, author of the study. ‘Nonprofits are effective at turning out the people other organizations have given up on,’ he said.”
Why It Is Important for Foundations to Hire More People of Color
Trista Harris, president of the Minnesota Council on Foundations, reflected in a recent interview on the value of working to promote racial equity of foundation boards and staff.
“I think you need a diversity of perspectives to make good decisions. You need to have people at the table who don’t just understand these gaps theoretically but live them every day. One of the things I’ve heard from foundations’ staff of color in last couple months is that the conversations around Black Lives Matter for them aren’t hypothetical. That’s not always the case with their white colleagues. Foundation staff of color have moved into positions of privilege and are more financially stable than they may have been in the past, but that isn’t necessarily the case with their family members. So, they’re living closer to poverty. They’re seeing it in their personal lives and it brings a different urgency and perspective to their work. I think urgency is important when it comes to grant making.”
To Re-Energize, United Ways Engage New Donors and Take On Advocacy
United Ways are grappling with fading popularity of on-the-job donation drives, with annual fundraising falling by 35% over the past 25 years after adjusting for inflation. To reverse the slide, United Ways are trying to reach new donors [subscription] including Millennials, Hispanics, and women.
United Ways also are responding to growing interest among donors to address specific issues, in addition to funding organizations. As Jon Fine of the Seattle United Way puts it, “Charity supporters want to do more than just give financially. They want to help solve problems.”
“’We’ve done more than just take in money for other organizations,’ says Elise Buik, president of the United Way of Greater Los Angeles. ‘We’ve taken the initiative in these areas.’ By using its corporate connections and outreach skills, her group has been able to increase the attention paid to homelessness, in part because it has embraced using advocacy. ‘United Ways have traditionally been very neutral,’ says Ms. Buik. ‘Nowadays, people need to know what you stand for before they give. We’ve received a very strong response.’ The organization’s homelessness collaborative has raised more than $200 million since 2008. In September, the city governments of Los Angeles and its surrounding county made a commitment of $300 million to deal with homelessness at its roots—a result of the collaborative’s work, Ms. Buik says.”
Public Policy and Nonprofits at the State and Local Level: A Preview of Issues in 2016
In an era when elected officials are cutting taxes and public services, and state and local governments are facing critical choices such as maintaining fire and police services or repairing crumbling streets, governments are looking at new ways to fund essential services—including taxing nonprofit organizations. The National Council of Nonprofits offers its perspective on these and other issues in the year ahead.
- Taxes, Fees, PILOTs: Nationwide, we see a consistent trend of state and local governments, eager for new revenue, trying to take resources from tax-exempt nonprofits by seeking to impose taxes and fees, or demanding payments in lieu of taxes (PILOTs). The Maine and North Carolina legislatures considered several proposals to grant cities greater power to assess nonprofits new taxes or fees or to create a task force to study the issues; none of the bills passed.
- Challenges to Nonprofit Property Tax Exemptions: Property owned and operated by nonprofits for charitable purposes is exempt from property taxes in all 50 states. Threats to property tax exemptions come in many forms from all branches of government: state and local legislative bodies trying to rewrite the rules, executive branch tax assessors seeking to reclassify exempt property, and judges trying to legislate from the bench.
- Fiscal Challenges and Budget Gimmicks: When politicians delay substantive action to posture on fiscal matters, their communities and local nonprofits suffer the consequences. This pattern continues into the New Year in both Illinois and Pennsylvania, where neither state has enacted a budget for half a year, forcing nonprofits there to bear increased, uncompensated workloads and suffer substantially delayed reimbursements. The same often is true in the case of budget shortfalls, such as in Alaska, Connecticut, Delaware, Kansas, Louisiana, and Massachusetts.
- Attempts to Limit Charitable Giving Incentives: As in 2013, nonprofits across the country last year confronted legislatures questioning the value of tax deductions for donations to charitable works. Legislators in Hawai`i, Kansas, Maine, North Carolina, and Vermont mounted efforts to cap, modify, or repeal state charitable giving incentives, whether motivated by a need to close a budget gap or to generate revenue to pay for politically popular tax cuts.
- Nonprofit Independence: The Syrian refugee crisis at the end of 2015 was only one example of states seeking to treat charitable nonprofits as subsidiaries of government, and not as independent community based problem solvers dedicated to the public good. The Governors of Indiana, Texas, and other states ultimately were forced to back down from their demands that nonprofits not provide humanitarian assistance in relocating refugee families into their states.
Senior Program Director Andy Carroll writes resources, designs workshops, and facilitates seminars for funders. Andy also dedicates a significant portion of his time to managing our Leadership Initiative that defines, validates, nurtures, and celebrates the many ways philanthropists lead. Andy has 25 years of experience in nonprofit organizations, and he enjoys talking with funders about their questions, interests, passions, and plans for making a difference. Follow Andy on Twitter @andycarrollexpo.
