Nonprofits: By the Numbers - The societal significance of nonprofits and the scope of their work.

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The numbers don’t lie – nonprofits are deeply integrated into the fabric of American society. According to the Hill and Mancino treatise Taxation of Exempt Organizations, "There are more than 1.4 million nonprofit organizations exempt from federal income tax under Section 501(a) of the Internal Revenue Code (the Code) as organizations described in one of the paragraphs of Section 501(c)."

1.4 million.  That’s roughly one exempt organization for every 224 Americans.  The sheer number of organizations makes it easy to see why the lives of virtually every American are affected in one or another by the work of nonprofit entities. 

Hill and Mancino provide some addition information:

·               80,000:      The annual number of new applications for recognition of exemption.

·               12.5%:       The percentage the United States GDP attributable to the work of exempt organization.

·               $2.5 Trillion:         Assets held by non-church, nonprofit organizations.

·               $1.4 Trillion:         Annual Revenue reported by non-church, nonprofit organizations.

Though many of these organizations, individually, are “small potatoes,” in the aggregate they are not.  The private sector and the public sector dominate news headlines, but nonprofits comprise the indispensible “third sector.”  Like the third leg on a three-legged stool, exempt organizations provide American society a necessary stabilizing force.

Stated another way, if the public sector provides the necessary infrastructure or skeleton to support society, and the private sector provides the musculature, or the force to move it forward, the nonprofit sector is the society’s soul.  Nonprofits ensure that in the midst of a society’s efforts to progress, the people and ideas that really matter are not lost in development.  Visionary founders of nonprofits identify needs.  Nonprofits then provide rapid response to needs while comporting to deeply held values of a society’s members. Thus the nonprofit sector dynamically allows the society to effectively self-diagnosis and self-treat in ways that neither the private nor public sections can. 

Debate over benefits to exempt organizations currently centers on a kind of cost-benefit analysis: revenue lost by the federal government vs. the dollar value of services provided by tax-exempt nonprofits.  But more importantly, the above numbers and other statistics illustrate: Americans care about nonprofits.  Americans care deeply about what kind of a society America will be -- and that the soul of their society should be much more than about maximizing the “bottom line.”