the future of nonprofit america lester m....
TRANSCRIPT
THE FUTURE OF
NONPROFIT AMERICA
Lester M. Salamon
Leading Age Leadership Forum Chicago, IL, July 15, 2015
NONPROFITS: A MAJOR ECONOMIC FORCE
11.4 4.5
0.8
1.2
5.1
5.6
5.8
12.0
14.9
15.9
Utilities
Agriculture
Transportation & warehousing
Finance & insurance
Construction
Manufacturing
Retail trade
NONPROFIT SECTOR
Millions of workers, 2012
Paid workers
FTE volunteers
Source: Lester M. Salamon, The Resilient Sector Revisited: The New Challenge to Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2015).
WHO WE ARE 4 IMPULSES SHAPING NONPROFIT AMERICA
NONPROFIT AMERICA
Voluntarism Professionalism
Commercialism Civic activism
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
Federal retrenchment
WHO WE ARE CHALLENGES I: THE FISCAL CHALLENGE
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE GOVERNMENT SOCIAL WELFARE SPENDING
0%
20%
40%
60%
80%
100%
120%
140%
160%
1950 1955 1960 1965 1970 1975 1977 1980 1985 1989 1994
Total Pensions Education Health Welfare
1950 - 1994 1980 = 100
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
3.2%
Total
4.7%
3.2%
2.3% 2.2%
0.8%
Health Social insurance
Education Welfare & social
services
Housing
WHO WE ARE AVERAGE ANNUAL CHANGE IN GOVERNMENT SOCIAL WELFARE SPENDING, 1990-2009, BY FIELD
Source: Lester M. Salamon, America’s Nonprofit Sector, A Primer, 3rd Ed. (Washington, DC: The Foundation Center, 2012).
WHO WE ARE LEVEL OF FISCAL STRESS REPORTED BY NONPROFIT ORGANIZATIONS, 2003
14% NONE
35% MODERATE
Severe: 20% Very severe: 31% SEVERE OR VERY SEVERE 51%
% of organizations
Source: Johns Hopkins Nonprofit Listening Post Project Financial Health Survey, 2003.
Federal retrenchment
Changing forms of government support
Tepid giving growth
WHO WE ARE CHALLENGES I: THE FISCAL CHALLENGE
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE PRIVATE GIVING AS A SHARE OF PERSONAL INCOME, 1970-1997
1.64% 1990-97
1.78% 1980-89
1.86% 1970-79
PERIOD
GIVING AS % OF PERSONAL INCOME
Source: Lester M. Salamon, Ed., The State of Nonprofit America, (Washington, D.C.: The Brookings Institution Press, 2002).
WHO WE ARE CHARITABLE GIVING TO NONPROFIT OPERATING ORGANIZATIONS: 1997, 2007, 2011
Source: Lester M. Salamon, The Resilient Sector Revisited: The New Challenge to Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2015).
TYPE OF RECIPIENT ORGANIZATION
GIVING AS PERCENT OF TOTAL REVENUE
1997 2007 2011
Service and expressive 9.5 10.0 9.4
WHO WE ARE CHALLENGES
THE FISCAL CHALLENGE
THE COMPETITION CHALLENGE
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE NONPROFIT & FOR-PROFIT ROLES IN SELECTED FIELDS, 1982-1997
% Nonprofit % Change in 1982 a 1997 b relative nonprofit share EMPLOYMENT Child day care 52 38 -27% Job training 93 89 -4% Individual & family services 94 91 -3% Home health 60 28 -53% Kidney dialysis centers 22 15 -32%
FACILITIES/ENROLLMENT Dialysis centers 58a 32 -45% Rehabilitation hospitals 70a 36 -50% Home health agencies 64a 33 -48% Health maintenance organizations 65a 26 -60% Psychiatric hospitals 19a 16 -16% Hospices 89c 76 -15% Mental health clinics 64b 57 -11% Higher education enrollments 96d 89 -7%
Source: Lester M. Salamon, The State of Nonprofit America, (Washington, D.C.: The Brookings Institution Press, 2002).
WHO WE ARE CHANGE IN NONPROFITS’ SHARE OF EMPLOYMENT, SELECTED FIELDS, 1997-2007
FIELD CHANGE IN NONPROFIT SHARE Individual & family services -23
Community care facilities for the elderly -20 Home health care facilities -19 Specialty hospitals (other than psychiatric) -13 Outpatient facilities -8 Nursing care facilities -3 Other residential care facilities -3 Child day care -2
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE NONPROFIT NEED FOR & SUCCESS IN RAISING INVESTMENT CAPITAL, BY PURPOSE
42%
31%
26%
25%
39%
37%
2%
52%
53%
67%
77%
80%
91% TECHNOLOGY
BUILDINGS / LAND
PROGRAM DEVELOPMENT
STAFF DEVELOPMENT
STRATEGIC PLANNING
VEHICLES, EQUIPMENT
NONE
P E R C E N T O F O R G A N I Z A T I O N S
Need capital Secured capital
Source: Lester M. Salamon, “Claiming the Future: Nonprofits and Investment Capital,” Nonprofit Listening Post Project Communiqué No. 5, 2006.
WHO WE ARE NONPROFIT PROBLEMS ACCESSING INVESTMENT CAPITAL, BY SOURCE
Fairly or extremely difficult source to access Don’t know about source
P E R C E N T O F O R G A N I Z A T I O N S
41%
36%
53%
58%
55%
55%
55%
46%
3%
4%
1%
5%
32%
36%
39%
53%
INDIVIDUAL DONORS
FOUNDATIONS
COMMERCIAL BANKS
GOVERNMENT
VENTURE PHILANTHROPISTS
CREDIT UNIONS/SAVINGS BANKS
INSURANCE COMPANIES
PENSION FUNDS 99%
94%
91%
87%
63%
54%
45%
39%
Source: Johns Hopkins Nonprofit Listening Post Project Nonprofit Capital Needs Survey, 2005.
WHO WE ARE CHALLENGES
THE FISCAL CHALLENGE
THE COMPETITION CHALLENGE
THE LEGITIMACY CHALLENGE
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE SHARE OF ORGANIZATIONS REPORTING VARIOUS TYPES OF FEES AND TAXES
Source: Lester M. Salamon, S. Geller, and S. W. Sokolowski, “Taxing the Tax‐Exempt Sector—A Growing Danger for Nonprofit Organizations,” Nonprofit Listening Post Project Communiqué No. 21, 2011.
63%
42%
36%
17%
9%
ANY TYPE OF TAX, FEE, OR PILOT
USER FEES
OTHER PAYMENTS
FIELD-SPECIFIC TAXES
PILOTS
P E R C E N T O F O R G A N I Z A T I O N S
WHO WE ARE NONPROFIT RESPONSE
1. OVERALL GROWTH
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE AVERAGE ANNUAL GROWTH IN NONPROFIT REVENUES & U.S. GDP, 1977-1996 & 1997-2007
3.0% 3.0%
3.6% 4.0%
1977-1996 1997-2007
PERC
ENT G
ROW
TH
GDP Nonprofit revenue
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE ANNUAL CHANGES IN EMPLOYMENT NONPROFIT vs. FOR-PROFIT, 2000-2010
L. M. Salamon, S. W. Sokolowski, and S. L. Geller. “Holding the Fort: Nonprofit Employment during a Decade of Economic Turmoil.” Nonprofit Listening Post Project Communiqué No. 39, 2012.
3.3%
2.8%
1.6%
1.8%
1.9%
2.2%
2.5%
2.6%
1.2%
0.8%
-1.0%
-1.9%
-0.6%
1.3%
2.0%
1.9%
1.0%
-1.1%
-6.2%
-0.9%
PE
RC
EN
T C
HA
NG
E
Nonprofit
For-profit
2000-2001
2005- 2006
2004- 2005
2003- 2004
2002- 2003
2001- 2002
2009- 2010
2008- 2009
2007- 2008
2006- 2007
WHO WE ARE CHANGES IN NONPRIOFIT REVENUES, BY FIELD, 1997-2007
41.0%
50.0%
51.0%
53.0%
111.0%
75.0%
53.0%
CULTURE, RECREATION
EDUCATION, RESEARCH
SOCIAL SERVICES
HEALTH
OTHER
ENVIRONMENT
TOTAL
32.0% U.S. GDP
P E R C E N T G R O W T H
NONPROFITS
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE NONPROFIT RESPONSE
2. COMMERCIALIZATION • Successful marketing to paying customers
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE SOURCES OF NONPROFIT GROWTH, 1997-2007
FEES, 58%
GOVERNMENT, 30%
PHILANTHROPY, 12%
TOTAL GROWTH = 457 BILLION
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE SOURCES OF NONPROFIT REVENUE GROWTH, BY FIELD, 1997-2007
18%
40%
45%
64%
67%
58%
17%
41%
11%
34%
20%
30%
66%
20%
44%
2%
14%
12%
ENVIRONMENT
SOCIAL SERVICES
CULTURE, RECREATION
HEALTH
EDUCATION, RESEARCH
TOTAL
FEES GOVERNMENT PHILANTHROPY
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE NONPROFIT RESPONSE
2. COMMERCIALIZATION • Successful marketing to paying customers • Successful pursuit of public funds
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE NONPROFIT RESPONSE
1. OVERALL GROWTH
2. COMMERCIALIZATION
3. MANAGERIAL PROFESSIONALIZATION
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE THE RISKS
• Growing identity crisis
• Increased demands on nonprofit managers
• Threat of mission creep
• Disadvantaging small agencies
• Potential loss of public trust Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE RESETTING THE BALANCE
• THE SURVIVAL IMPERATIVE
• THE DISTINCTIVENESS IMPERATIVE
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE THE ROAD AHEAD: 3 POSSIBLE SCENARIOS
CELEBRATION AND DRIFT
THE SOCIAL ENTERPRISE SCENARIO
THE RENEWAL SCENARIO
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE THE RENEWAL OPTION: AN ACTION AGENDA
• Renew the nonprofit value proposition
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE RENEW THE NONPROFIT VALUE PROPOSITION
THE PE3R2C STANDARD Productive Effective Empowering Enriching Responsive Reliable Caring
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE THE RENEWAL OPTION: AN ACTION AGENDA
• Renew the nonprofit value proposition • Improve the government-nonprofit partnership • Improve access to capital
– Foundations as Philanthropic banks – Broadened tax credit – New Frontiers of Philanthropy
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
IS YOUR ORGANIZATION READY FOR THE NEW FRONTIERS OF PHILANTHROPY?
“…the definitive chronicle of the innovations that are infusing new life into the well-intentioned but often-staid world of philanthropy.”
~ Mario Marino, Venture Philanthropy Partners
“…a roadmap to the significant revolution underway…in the worlds of philanthropy and social investment.”
TO ORDER: bit.ly/NFPSalamon or bit.ly/OUP_NFP
IS YOUR ORGANIZATION READY FOR THE NEW FRONTIERS OF PHILANTHROPY?
An accessible overview of the new actors and tools reshaping philanthropy and social investment with recommendations for overcoming the challenges they still face.
~ Rip Rapson, Kresge Foundation
TO ORDER: bit.ly/LfGSalamon or bit.ly/OUP_LfG
WHO WE ARE THE RENEWAL OPTION: AN ACTION AGENDA
• Renew the nonprofit value proposition • Improve the government-nonprofit partnership • Improve access to capital
– Philanthropic banks – Broadened tax credit
• Replace tax deduction with tax credit • Improve public understanding
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
WHO WE ARE CONCLUSION
“It has been said that the quality of a nation can be seen in the way it treats its least advantaged citizens. But it can also be seen in the way it treats its most valued institutions.”
Source: Lester M. Salamon, Ed., The State of Nonprofit America, 2nd Ed., (Washington, D.C.: The Brookings Institution Press, 2012).
LATEST UPDATE FROM BROOKINGS INSTITUTION PRESS
The Resilient Sector Revisited is a must-read for every nonprofit governing body and senior team. It has important numbers about our sector and—even more importantly—offers wisdom and perspective on the ever-changing dynamics we must navigate. It is a reference guide that nonprofits will want to keep handy for the data and compass that it offers as we address our current problems and future strategies.
~ Larry Minnix, President and CEO of LeadingAge
TO ORDER: bit.ly/Resilient2_Salamon
WHO WE ARE FURTHER INFORMATION
LESTER M. SALAMON [email protected]
Website: ccss.jhu.edu Twitter: @JHUCCSS