2004 philanthropy ferris nonprofit

7/31/2019 2004 Philanthropy Ferris Nonprofit

1/41

PHILANTHROPY AND THE

NONPROFIT SECTOR

James M. Ferris

March 10, 2004


2/41

Definitions, Boundaries, and Scope

The Philanthropic Dimension ofthe Nonprofit Sector

Trends in Philanthropy


3/41

Definitions, Boundaries, & Scope


4/41

What Is the Nonprofit Sector?

Formal organizations that are neither

public or for-profit.

Private, self-governing, voluntary,

non-profit distributing.

Exempt from corporate income taxes.

Diverse, heterogeneous group.


5/41

Terminological Thicket

Nonprofit

Not-for-profit

Voluntary

Independent

Charitable

Nongovernmental

Philanthropic

Third Sector

Civil Society

Social Benefit


6/41

The Nonprofit Sector in Context

Relative Size in terms of:

OrganizationsNational Income

Employees

Earnings


7/41

Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.

Nonprofit

Sector, 5.9%

Business

Sector, 93.8%

Government

Sector, 0.3%

Distribution of Organizations by Major Sector,

1998

Total number of organizations = 27.7 million


8/41


1998

Nonprofit Sector,

4.7%

Business

Sector, 82.3%

Government

Sector, 13.0%

Including Assigned Values, 1998

Nonprofit Sector,

6.7%

Business

Sector, 79.9%

Government

Sector, 13.4%

Distribution of National Income by Major Sector,

1998

Total national income = $6.9 trillion Total national income = $7.1 trillion


9/41


1998

Nonprofit Sector,

8.1%

Business

Sector, 76.5%

Government

Sector, 15.4%

Including unpaid workers and volunteers, 1998

Nonprofit Sector,

11.7%

Business

Sector, 72.2%

Government

Sector, 16.0%

Distribution of Employees by Major Sector, 1998

Total national employees = 144 million Total national employees = 154 million


10/41


1998

Nonprofit

Sector, 5.9%

Business

Sector, 79.7%

Government

Sector, 14.4%


Nonprofit

Sector, 8.4%

Business

Sector, 76.7%

Government

Sector, 14.9%

Distribution of Paid Earnings by Major Sector,

1998

Total earnings = $4.8 trillion Total earnings = $5.0 trillion


11/41

The Public Benefit Nonprofit Sector

The nonprofit sector is comprised of 27 types of

organizations in the Internal Revenue Code.

Of particular interest are the public benefitorganizations:

501(c)(3): Religious, charitable, educational, etc.

501(c)(4): Social Welfare.

Comprise the great majority of the sector

Common perception of the sector


12/41

Distribution of National Income in

Nonprofit Sector, 19981998

Other Nonprofits,

8.2%

Independent Sector,

91.8%


Other Nonprofits,

8.6%

Independent Sector,

91.4%


Total nonprofit national income = $325 billion Total nonprofit national income = $477 billion


13/41

Philanthropy & the Nonprofit Sector

The task of comprehending the nonprofit sector is

further complicated by a widespread failure to

recognize the important distinction between

philanthropy, on the one hand, and the private

nonprofit sector, on the other. In many accounts

these two terms are treated interchangeably when

in fact one is really just part of the other.

Lester Salamon,Americas Nonprofit Sector


14/41

Philanthropy & the Nonprofit Sector

The nonprofit sector is the set of organizations

that are private but serve public purposes

advancement of health, education, scientific

progress, social welfare or the free expressionof ideas.

Philanthropy is the giving of time or money for

public purposes. It is an important resource

for nonprofit organizations.

Venture capital for social change.


15/41

Private

Contributions,

19.9%

Private

Payments,

37.5%

Other Income,

11.4%

Government,

31.3%


Sources of Nonprofit Revenue, 1997

Total Revenue = $665 billion


16/41

Private

Contributions,

35.2%

PrivatePayments,

28.4%

Other Income,

15.7%

Government,

20.7%


Sources of Nonprofit Revenue, 1997(excluding health services)



17/41

Changing Patterns

26.3%

9.6%11.4%

31.3%

37.5%

26.6%

19.9%

37.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Private

Contributions

Private

Payments

Other Income Government

Source of Revenue

1977

1997



18/41

Changing Patterns(excluding health services)

42.1%

27.6%

8.7%

21.6%

35.2%

28.4%

15.7%

20.7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Private

Contributions

Private Payments Other Income Government

Source of Revenue

1977

1997



19/41

Changing Patterns:

HealthServices


7.8%

49.1%

10.7%

42.2%

32.4%

46.9%

4.0%6.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

PrivateContributions

Private Payments Other Income Government

Source of Revenue

1977

1997


20/41


Changing Patterns:

Arts and Culture

11.8%9.7%

29.4%

17.6%

41.2%

27.9%

18.8%

43.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Private

Contributions

Private

Payments


Source of Revenue

1977

1997


21/41


Changing Patterns:

Education and Research

20.1%

13.4%

18.2%

52.9%

8.8%

19.4%

11.1%

56.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Private

Contributions

Private

Payments


Source of Revenue

19771997


22/41

Industry Allocation of Revenues,

1997

Health Services, 49.1%

Education & Research,17.9%

Religious Organizations,

11.5%

Social & Legal Services,

11.6%

Civic, Social & Fraternal

Organizations, 2.7%

Arts & Culture, 2.3%

Foundations, 5.0%




23/41


19771977

Health Services, 46.2%

Education & Research,

24.7%

Religious Organizations,

12.2%

Social & Legal Services,

9.3%

Civic, Social & Fraternal

Organizations, 3.8%

Arts & Culture, 1.5%

Foundations, 2.3%




24/41


1977 and 1997Changing Patterns

25%

12%9%

4%2% 2%

49%

12%

3% 2%5%

46%

11%

18%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Health

Serv

ices

Education&

Resea

rch

Religious

Organizations

Social&L

egal

Service

s

Civic,

Soc

ial&

Fratern

al

Organizat

ions

Arts&

Cu

lture

Foundations

PercentofTotal

1977

1997



25/41

Roles of the Nonprofit Sector

Service Delivery

Advocacy Community Building

Value Guardian


26/41

The Philanthropic Dimension

of the Nonprofit Sector


27/41

Private Giving, 2002

Corporations, 5.1%

Foundations, 11.2%

Bequests, 7.5%

Individuals, 76.3%

Source: Giving USA, AARFC Trust for Philanthropy, 2003.

Total Giving = $241 billion


28/41

Changing Sources of Private Giving

75%78%79%80%84%82%77%

8%8%8%

6%8%10% 7%

12%8%7%7%9% 6% 6% 6%6%7%5%

4%4%5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1970 1975 1980 1985 1990 1995 2000

Corporations

Foundations

Bequests

Individuals

Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002 ; Giving USA, AARFC Trust for Philanthropy, 2003.


29/41



Private Giving by Type, 1970

77.1%

10.0%

9.0%3.8%

Individuals

Bequests

Foundations

Corporations


83.7%

6.0%

5.8%4.7%

Individuals

Bequests

Foundations

Corporations

Total giving = $21 billion Total giving = $48.6 billion


30/41




79.5%

7.7%

7.3%5.6%

Individuals

Bequests

Foundations

Corporations


74.8%

7.9%

12.0%

5.4%

Individuals

Bequests

Foundations

Corporations

Total giving = $98.8 billion Total giving = $203.4 billion


31/41

Giving By Recipient Type, 2002

Religion, 35.0%

Educ atio n, 13.1%

Human Services , 7.7%

Health, 7.8%

Unalloc ated Giving, 12.6%

Public-so ciety Benefit, 4.8%

Arts , Culture & Humanities,

5.1%

Environment/ animals, 2.7%

Internatio nal Af fairs , 1.9%

Foundations (estimate),

9.1%


Total Giving = $241 billion


32/41

Private Giving as % of Income

1.8% 1.8%1.6% 1.7% 1.5%

1.8%1.9%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

1970 1975 1980 1985 1990 1995 2000

Year

Perc

ent



33/41

PHILANTHROPIC

INSTITUTIONS

Foundations

Federated Fundraising Appeals

Donor Advised Funds

Public Grantmaking Charities


34/41

FOUNDATIONS

Philanthropic foundations are an important

element of the American nonprofit

landscape.

Mechanism through which philanthropicdollars flow to nonprofit organizations,

typically from endowments.

They are of particular interest given theirlink to concentrated wealth and the impact

of their grantmaking.


35/41

Foundations, 2001

61,180 grantmaking foundations,

with $477 billion in assets, and

$30.5 billion in giving. A nearly three-fold increase in assets

and over a three-fold increase in

giving since 1991.


36/41

Foundation Growth, 1991-2001

Number Assets (b) Giving (b)

1991 33,356 $162.907 $9.2111995 40,140 $226.736 $12.261

1999 50,201 $448.610 $23.321

2001 61,180 $476.789 $30.502


37/41

Size Concentration: 2001

The largest 43 foundations$1 B ormore in assets, hold 34.8% of assets and23.8% of giving.

The largest 214 foundations$ 250million or more in assets, hold assets51.4% of assets and 47.4% of giving.

Foundations with under $10 million inassets (56K+) hold 13.8% of assets and25.2% of giving.


38/41

Regional Concentration: 2001

State % of Giving % of Assets

New York 18.8 17.2

California 11.7 13.9Pennsylvania 5.3 5.2

Washington 5.1 8.3

Texas 4.9 5.1


39/41

Foundation Types

Private Independent Foundations

Family Foundations

Corporate Foundations

Operating Foundations

Community Foundations


40/41

Industry Structure: 2001

FoundationType

Number Assets Giving

Independent 89.2% 84.6% 77.7%

Corporate 3.5% 3.3% 10.6%

Community 1% 6.4% 7.9%

Operating 6.3% 5.7% 3.6%


41/41

Funding Priorities, 2001

(percent of total)

Education 26.8

Health 20.5

Human Services 13.8

Arts and Culture 12.2

Public/Social 10.9

Environment 6.2

International 2.4

Science/Tech 2.9

Social Science 2.1

Religion 2.1

Other .1

2004 philanthropy ferris nonprofit

Documents