Money & Business

Report: Nonprofits Continue Growth, But With Deficits

By / Oct 27, 2016 (iStock/Thinkstock)

A newly updated Urban Institute report indicates that nonprofits have continued to grow, even during the recession, and have seen a major expansion in wages in recent years. But this growth has sometimes outpaced nonprofit budgets.

Nonprofits are increasingly diving into their reserves—or even lines of credit—to maintain their growth.

That’s a key finding from new research released by the Urban Institute. The findings, which were revealed in The Nonprofit Almanac, 2016: The Essential Facts and Figures for Managers, Researchers, and Volunteers, showed that nonprofits are maintaining their growth, but at the cost of deficit totals of between 4 and 8 percent of revenue each year.

According to a summary of the report from The NonProfit Times, growth held up for the nonprofit sector during the the economy’s lean years. It’s been the only sector to see positive growth since 2000.

“One of the big trends throughout the almanac was that the size and growth of the sector was robust even during the recession,” Urban Institute Research Associate Brice McKeever told the website.

One area of increased spending for nonprofits, according to the study, was employment. In 2003, the nonprofit sector paid out roughly $425 billion in wages. In comparison, the sector paid out an estimated $634 billion in 2013. Even accounting for inflation, nonprofit spending on employment was 18 percent higher in 2013 than it was a decade earlier. (That number includes nonprofit hospitals and medical services, which outpaced the rest of the nonprofit sector and represented 57 percent of all wages. However, even if you take those out, nonprofit wages would still have seen a massive increase, The NonProfit Times notes.)

In a separate summary of the report on the Nonprofit Quarterly website, McKeever and Coauthor Marcus Gaddy also noted that nonprofits leaned heavily on the work of volunteers—and if that work were to be monetized, it would represent a significant value to the sector.

“In 2013, the value of volunteers, calculated using average private wages, was worth $167.2 billion to the sector,” the article states. “The combination of nonprofit wages and volunteer labor exceeded $801 billion in 2013, and volunteers accounted for over 26 percent of this combined total.”

The 300-page report, receiving its first comprehensive update in about four years, is based on data from both government and nonprofit sector sources. It can be purchased at the Rowman & Littlefield website.

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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