Lexington, KY - Over 1.9 million nonprofit organizations currently operate in the United States, according to the Internal Revenue Service Databook 2008. This number does not include many of the very small charities that are not reporting to the IRS. The growth rate has been intense, with a 53 percent growth between 1995 and 2005.
In 2006, the nonprofit sector accounted for 5 percent of GDP in figures set forth in Independent Sector's Nonprofit Almanac 2008. An estimated $1.1 trillion in revenue and in total expenses was reported by this sector in 2005.
Support for nonprofit organizations comes from a variety of sources. Dues, fees, government and corporate funding, interest income and charitable contributions all weigh in. Government is the main source of revenue for human services. Dues, fees and charges are the primary source for education and health. Arts and religious organizations receive most of their revenue from charitable contributions.
United Way of America tops the Chronicle of Philanthropy's 2009 annual list of the 400 largest U.S. nonprofit groups, based on fundraising totals. The Salvation Army came in at second place. American Cancer Society held the eighth spot, closely followed by the YMCA. My former employer, The Nature Conservancy, is 14th among nonprofits in fundraising.
Kentucky's top fundraising organization, based on the Chronicle's listing, is the Christian Appalachian Project, located in Lancaster, which is ranked 144th. Disabled American Veterans of Cold Spring ranks at 185th. Kentucky nonprofits don't show up again on the list until the University of Louisville captured the 313th place, and the University of Kentucky came in at 344th.
By the way, Kentucky ranks 38th among states in total charitable giving, based on 2007 figures as compiled by The Foundation Center. The top donor among Kentucky foundations is the James Graham Brown Foundation of Louisville.
Giving USA reports total charitable giving in 2008 tallied up to $307.65 billion. This statistic has fallen by the largest percentage in five decades. Individuals gave 82 percent of this amount. Foundations provided 13 percent, and corporations kicked in 5 percent. Religion received the lion's share of the donations - an estimated 35 percent. Education received 13 percent. Gifts to foundations are estimated at 10.6 percent, with other areas all receiving varying percentages of less than 10 percent of the total.
Stanley and Fiona Druckenmiller, both in the finance industry, were first on the Chronicle's list of America's most generous donors in 2009, with a gift of $705 million to their private foundation. The largest bequest was that of John M. Templeton, the mutual fund pioneer, at $573 million bequeathed to his private foundation. Bill and Melinda Gates added $350 million to the foundation they established in 2000. And talk about spreading the wealth - Michael Bloomberg gave an estimated $254 million to 1,358 nonprofit organizations in 2009.
Closer to home was the $185 million gift from Louise Dieterle Nippert, a longtime owner of the Cincinnati Reds with her late husband, who was a great grandson of James A. Gamble, the cofounder of Procter & Gamble. Nippert, age 98, resides in Cincinnati and has quietly given hundreds of millions of dollars to various Cincinnati institutions, with a special emphasis on the arts.
Giving figures for the yearend of 2009 are still coming in. However, it is clear the economic downturn continues to plague nonprofit organizations. A just-released survey by The Council for Aid to Education reveals that charitable giving to colleges and universities dropped by historic percentages in 2009, with a decline of 11.9 percent. Academic endowments dropped by 22.3 percent for the year. Private liberal arts colleges as a group reported the largest declines. Arts groups also have reported significant declines.
The Foundation Center expects to see a 10 percent drop in foundation giving for 2009 after all the figures are in. Foundations appear to be giving larger grants to fewer organizations to target their giving, in consideration of the hits their endowments have taken. Some dropped as much as 40 percent last year.
What will 2010 bring? The Foundation Center predicts foundation giving will continue its decline in 2010. Corporations appear to be on shaky ground with their giving. Individuals continue to keep giving afloat, but the economy will no doubt have an impact on those figures. The earthquake in Haiti spurred many donations in early 2010, which will boost overall numbers, as did the tsunami and Katrina disaster appeals in past years.
Up to $50 million in Social Innovation grants recently announced by the Corporation for National and Community Service (CNCS) as part of the Edward M. Kennedy Serve America Act represents a new wave of grant making, as government steps in to stimulate organizational sustainability and funders look for nontraditional ways to make a difference with less funding dollars. Now is certainly the time to be strategic in your charitable giving and to continue to support the nonprofit sector as it struggles to provide vital services and enrich our lives.
Anne E. Nash, J.D. is principal and owner of My Giving Advisor, LLC - www.mygivingadvisor.com, a national philanthropic advising firm based in Lexington.