The sector accounts for 5 percent of gross domestic product (GDP) of the U.S. economy, 8 percent of wages and salaries, and 10 percent of employment. In addition, 29 percent of Americans volunteer through formal organizations. Nonprofit organizations receive $260 billion in donations.¹

The Urban Institute estimates that in 2005, paid employment in the nonprofit sector was 12.9 million. The sector enlists the support of the equivalent of more than 4.7 million full-time volunteers, representing a total of more than 17.6 million workers.²

Researchers estimate that in 2006 nonprofit wages plus the value of volunteer time was almost $713 billion. According to World Bank data for the same year, if the nonprofit sector were a country, this would put it just shy of Australia in terms of GDP. Based on wages paid only, the sector would push out the Netherlands to be the sixteenth largest economy in the world.³

For the nonprofit sector job seeker, the size and scope of the sector mean that a great breadth of organization types and employment opportunities exist in the sector. Nonprofit employment—like overall U.S. employment—tends to be concentrated in the Middle Atlantic, South Atlantic, and East North Central (surrounding Indiana and Illinois) regions. Metropolitan areas experiencing the top level of growth of new charities (with percentage increase) include

• Atlanta (new charities up 23 percent)
• Las Vegas (up almost 21 percent)
• Orlando (up 20 percent)
• Houston (up just more than 19 percent)
• Miami/Ft. Lauderdale (up almost 19 percent)
• Nashville (up almost 18 percent)⁴

But the sector’s size suggests you are apt to be able find a healthy nonprofit organization working in the field and geographic region where you would like to work.

The nonprofit sector is growing. Between 1995 and 2005, the number of organizations registered with the IRS grew by more than 27 percent. However, the number of public charities—those classified as 501(c)(3) as described above—grew at a rate greater than 50 percent over ten years. More than one hundred new nonprofit organizations file with the IRS every day.

The sector’s finances are also increasing, and faster than the rest of the U.S. economy. The U.S. GDP increased by approximately 35 percent from 1995 to 2005 after adjusting for inflation. The nonprofit sector’s major financial measures each increased by at least 54 percent over the same period. The nonprofit sector as a whole had total assets increase by more than 77 percent.

Given the expansion of the nonprofit sector, it is no surprise that employment in the sector is growing as well. From 1998 to 2005, employment in the sector grew by 16 percent—three times faster than the rest of the economy.
For the nonprofit sector job seeker, the fact that the nonprofit sector is growing faster than the rest of the economy suggests that employment and leadership positions in it will develop more quickly than elsewhere. It’s a great time to consider a nonprofit sector career, and opportunities are likely to increase.

Most nonprofit organizations are small. The majority of reporting public charities—almost 74 percent—are small organizations with expenses less than $500,000. Although these groups dominate the sector in terms of number of organizations, they don’t dominate financially. The behemoths of the sector—public charities with more than $500 million in revenue—account for fewer than 0.1 percent of organizations but more than 27 percent of the sector’s assets and revenue.

Source: Pollack and Blackwood, The Nonprofit Sector in Brief, 2007.

The top twenty largest nonprofit organizations
In its “NPT 100,” The NonProfit Times annually ranks the one hundred largest nonprofit organizations—those that generated the most income in a given fiscal year. Making the top twenty for 2007 were

1. American Red Cross
2. YMCA of the USA
3. United Jewish Communities
4. Catholic Charities USA
5. The Salvation Army
6. Goodwill Industries International
7. Memorial Sloan-Kettering Cancer Center
8. Boys & Girls Clubs of America
9. Habitat for Humanity International
10. Boy Scouts of America
11. American Cancer Society
12. The Nature Conservancy
13. National Easter Seal Society
14. World Vision
15. Planned Parenthood Federation of America
16. Gifts In Kind International
17. AmeriCares Foundation
18. Food For The Poor
19. Volunteers of America
20. Girl Scouts of the USA

Note: The 2007 edition of the NPT 100 reflects financial data from the fiscal year ending 2006. To qualify for the list, an organization must receive at least 10 percent of its total revenue from public support. As such, many hospitals are not included. In addition, the NPT 100 does not include the United Way—despite its $4 billion in assets—because the researchers want to avoid counting dollars more than once. They consider United Way largely to be a “pass-through” agency that redirects contributions to other charities or causes.

Source: “The 2007 NonProfit Times Top 100: An In-Depth Study of America’s Largest Nonprofits,” The NonProfit Times (November 1, 2007); available at www.nptimes.com/07Nov/071101SR.pdf (accessed January 9, 2008).

Contributions of time and money
Volunteers are vital to nonprofit organizations. They serve on boards of directors, administer programs, staff offices, perform administrative duties, raise funds, and organize special events. They drive vans for senior citizens, pick up trash, and provide counseling for at-risk teens. Think of any work within the nonprofit sector, and you can bet volunteers play an important role.

A significant slice of the American population volunteers: in 2005, the Bureau of Labor Statistics reported that more than one in four Americans (just under 29 percent) volunteered through a formal organization. This represents a small increase over the 2002 rate of just more than 27 percent. Among different demographic groups, blacks or African Americans had the greatest increase in volunteering, with an increase of approximately 3 percent. In terms of age, people between the ages of 35 and 44 are most likely to report that they volunteered, with more than 34 percent indicating they had in 2005.

Every nonprofit sector professional must understand the contribution volunteers make in advancing an organization’s mission and delivering its services. Your work is apt to depend on volunteer labor, and you may even be expected to recruit or manage volunteers. And of course, volunteering yourself is a great way to learn more about the nonprofit sector and increase your network—both before you start working and even after you have a job with a nonprofit organization.

Charitable giving in the United States set a new record in 2006. Giving USA, an annual study of philanthropy in the nation, estimated it at more than $295 billion, a 1 percent increase over 2005 when adjusted for inflation.⁵ The increase is noteworthy given that 2005 charitable donations were particularly high because of disaster relief giving, especially for victims of Hurricane Katrina and the Asian tsunamis.

Highlights of 2006 giving included Warren Buffett’s $1.9 billion contribution—the first installment of his promised $31 billion gift to four foundations over twenty years. The bulk of the Buffett donation will go to the Bill & Melinda Gates Foundation, which expects to double its giving to $3.2 billion by 2009, and is expected to eventually have $60 billion in assets. In addition, at least twenty-one individuals gave more than $100 million to charity in 2006.

While contributions from individuals are always the largest source of donations (and accounted for more than 75 percent of giving in 2006, or 83 percent when including bequests), “mega gifts” such as Buffet’s account for a little more than 1 percent of the total. The vast majority of philanthropic giving comes from normal citizens: 65 percent of households with incomes lower than $100,000 gave to charity.

Notes

¹ Unless noted otherwise, data is drawn from Kennard T. Wing, Thomas H. Pollak, Amy Blackwood, and Linda M. Lampkin, The Nonprofit Almanac 2008 (Washington, DC: The Urban Institute Press, forthcoming); and Thomas H. Pollack and Amy Blackwood, The Nonprofit Sector in Brief: Facts and Figures from the Nonprofit Almanac 2007 (Washington, D.C.: National Center for Charitable Statistics at the Urban Institute); available at www.urban.org.

² Lester M. Salamon and S. Wojciech Sokolowski, “Employment in America’s Charities: A Profile,” Nonprofit Employment Bulletin Number 26 (The Johns Hopkins Center for Civil Society Studies, 2006).

³ Based on 2006 World Bank data for total GDP worldwide, the U.S. nonprofit sector’s revenue would represent the eighth largest economy in the world, ahead of Canada, Spain, Brazil, and Russia, and behind Italy. For World Bank data, see http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf
(accessed January 7, 2008).

⁴ Data reflect growth rates of organizations from 1993 to 2003. From the Urban Institute’s National Center for Charitable Statistics and the Census Bureau, as reported in “Where the New Charities Are: Gains in 50 Big Metropolitan Areas,” The Chronicle of Philanthropy (January 6, 2005); available at http://www.philanthropy.com/premium/articles/v17/i06/where.htm
(accessed January 30, 2008).

⁵ Data from Giving USA, as reported in Holly Hall, “Donations by Americans reached $295-billion in 2006,” The Chronicle of Philanthropy (June 28, 2007), available at http://www.philanthropy.com/free/articles/v19/i18/18002701.htm (accessed January 11, 2008).