No great surprise, but the vast majority of non-profit organizations in the U.S. are small.
According to the Urban Institute's National Center for Charitable Statistics, there are about 1.6 million non-profit organizations in the U.S. And according to the BLS, about 8.8 million people are employed by non-profits (thanks to BLS economist Steve Hipple for providing the data). Simple math shows that these numbers mean there are a lot of very small non-profits.
Going a bit deeper, the Urban Institute's Non-Profit Sector in Brief shows that 82% of non-profits spend less than $1 million a year and 44% spend less than $100k.
Only 4% spend more than $10 million a year, and most of these organizations are hospitals and educational institutions.
The number of U.S. non-profits has about doubled over the last decade, with almost all the growth coming from very small (less than $100k in expenses) non-profits. The drivers of the growth of small non-profits are similar to the drivers of small business growth:
- The Internet and other technology makes is making it easier to start and operate a small non-profit.
- Baby boomers, looking for encore careers and a way to give back, are starting non-profits.
- Gen Y, with a strong interest in social service, are starting non-profits.
- A growing view that non-profits and social service organizations are replacing governments as the key solvers of social problems.
Most of the data on non-profits pre-date the recession, so we don't have a good sense of its impact on the number of non-profits. Donation data is more current and fell 5.6% in 2008. It likely fell again in 2009. But we don't think this resulted in a decline in the number of small non-profits. We think larger non-profits felt the major brunt of this decline.
The forces driving the growth of small non-profits are, if anything, likely to get stronger as the economy recovers. Because of this, we expect the number of small non-profits to continue to grow in number.
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