2004 philanthropy ferris nonprofit
TRANSCRIPT
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PHILANTHROPY AND THE
NONPROFIT SECTOR
James M. Ferris
March 10, 2004
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Definitions, Boundaries, and Scope
The Philanthropic Dimension ofthe Nonprofit Sector
Trends in Philanthropy
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Definitions, Boundaries, & Scope
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What Is the Nonprofit Sector?
Formal organizations that are neither
public or for-profit.
Private, self-governing, voluntary,
non-profit distributing.
Exempt from corporate income taxes.
Diverse, heterogeneous group.
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Terminological Thicket
Nonprofit
Not-for-profit
Voluntary
Independent
Charitable
Nongovernmental
Philanthropic
Third Sector
Civil Society
Social Benefit
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The Nonprofit Sector in Context
Relative Size in terms of:
OrganizationsNational Income
Employees
Earnings
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Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
Nonprofit
Sector, 5.9%
Business
Sector, 93.8%
Government
Sector, 0.3%
Distribution of Organizations by Major Sector,
1998
Total number of organizations = 27.7 million
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Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
1998
Nonprofit Sector,
4.7%
Business
Sector, 82.3%
Government
Sector, 13.0%
Including Assigned Values, 1998
Nonprofit Sector,
6.7%
Business
Sector, 79.9%
Government
Sector, 13.4%
Distribution of National Income by Major Sector,
1998
Total national income = $6.9 trillion Total national income = $7.1 trillion
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Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
1998
Nonprofit Sector,
8.1%
Business
Sector, 76.5%
Government
Sector, 15.4%
Including unpaid workers and volunteers, 1998
Nonprofit Sector,
11.7%
Business
Sector, 72.2%
Government
Sector, 16.0%
Distribution of Employees by Major Sector, 1998
Total national employees = 144 million Total national employees = 154 million
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Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
1998
Nonprofit
Sector, 5.9%
Business
Sector, 79.7%
Government
Sector, 14.4%
Including Assigned Values, 1998
Nonprofit
Sector, 8.4%
Business
Sector, 76.7%
Government
Sector, 14.9%
Distribution of Paid Earnings by Major Sector,
1998
Total earnings = $4.8 trillion Total earnings = $5.0 trillion
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The Public Benefit Nonprofit Sector
The nonprofit sector is comprised of 27 types of
organizations in the Internal Revenue Code.
Of particular interest are the public benefitorganizations:
501(c)(3): Religious, charitable, educational, etc.
501(c)(4): Social Welfare.
Comprise the great majority of the sector
Common perception of the sector
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Distribution of National Income in
Nonprofit Sector, 19981998
Other Nonprofits,
8.2%
Independent Sector,
91.8%
Including Assigned Values, 1998
Other Nonprofits,
8.6%
Independent Sector,
91.4%
Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
Total nonprofit national income = $325 billion Total nonprofit national income = $477 billion
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Philanthropy & the Nonprofit Sector
The task of comprehending the nonprofit sector is
further complicated by a widespread failure to
recognize the important distinction between
philanthropy, on the one hand, and the private
nonprofit sector, on the other. In many accounts
these two terms are treated interchangeably when
in fact one is really just part of the other.
Lester Salamon,Americas Nonprofit Sector
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Philanthropy & the Nonprofit Sector
The nonprofit sector is the set of organizations
that are private but serve public purposes
advancement of health, education, scientific
progress, social welfare or the free expressionof ideas.
Philanthropy is the giving of time or money for
public purposes. It is an important resource
for nonprofit organizations.
Venture capital for social change.
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Private
Contributions,
19.9%
Private
Payments,
37.5%
Other Income,
11.4%
Government,
31.3%
Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
Sources of Nonprofit Revenue, 1997
Total Revenue = $665 billion
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Private
Contributions,
35.2%
PrivatePayments,
28.4%
Other Income,
15.7%
Government,
20.7%
Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
Sources of Nonprofit Revenue, 1997(excluding health services)
Total Revenue = $339 billion
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Changing Patterns
26.3%
9.6%11.4%
31.3%
37.5%
26.6%
19.9%
37.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Private
Contributions
Private
Payments
Other Income Government
Source of Revenue
1977
1997
Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
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Changing Patterns(excluding health services)
42.1%
27.6%
8.7%
21.6%
35.2%
28.4%
15.7%
20.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Private
Contributions
Private Payments Other Income Government
Source of Revenue
1977
1997
Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
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Changing Patterns:
HealthServices
Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
7.8%
49.1%
10.7%
42.2%
32.4%
46.9%
4.0%6.9%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
PrivateContributions
Private Payments Other Income Government
Source of Revenue
1977
1997
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Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
Changing Patterns:
Arts and Culture
11.8%9.7%
29.4%
17.6%
41.2%
27.9%
18.8%
43.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Private
Contributions
Private
Payments
Other Income Government
Source of Revenue
1977
1997
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Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
Changing Patterns:
Education and Research
20.1%
13.4%
18.2%
52.9%
8.8%
19.4%
11.1%
56.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Private
Contributions
Private
Payments
Other Income Government
Source of Revenue
19771997
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Industry Allocation of Revenues,
1997
Health Services, 49.1%
Education & Research,17.9%
Religious Organizations,
11.5%
Social & Legal Services,
11.6%
Civic, Social & Fraternal
Organizations, 2.7%
Arts & Culture, 2.3%
Foundations, 5.0%
Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
Total Revenue = $665 billion
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Industry Allocation of Revenues,
19771977
Health Services, 46.2%
Education & Research,
24.7%
Religious Organizations,
12.2%
Social & Legal Services,
9.3%
Civic, Social & Fraternal
Organizations, 3.8%
Arts & Culture, 1.5%
Foundations, 2.3%
Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
Total Revenue = $111 billion
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Industry Allocation of Revenues,
1977 and 1997Changing Patterns
25%
12%9%
4%2% 2%
49%
12%
3% 2%5%
46%
11%
18%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Health
Serv
ices
Education&
Resea
rch
Religious
Organizations
Social&L
egal
Service
s
Civic,
Soc
ial&
Fratern
al
Organizat
ions
Arts&
Cu
lture
Foundations
PercentofTotal
1977
1997
Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002.
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Roles of the Nonprofit Sector
Service Delivery
Advocacy Community Building
Value Guardian
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The Philanthropic Dimension
of the Nonprofit Sector
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Private Giving, 2002
Corporations, 5.1%
Foundations, 11.2%
Bequests, 7.5%
Individuals, 76.3%
Source: Giving USA, AARFC Trust for Philanthropy, 2003.
Total Giving = $241 billion
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Changing Sources of Private Giving
75%78%79%80%84%82%77%
8%8%8%
6%8%10% 7%
12%8%7%7%9% 6% 6% 6%6%7%5%
4%4%5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1970 1975 1980 1985 1990 1995 2000
Corporations
Foundations
Bequests
Individuals
Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002 ; Giving USA, AARFC Trust for Philanthropy, 2003.
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Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002 ; Giving USA, AARFC Trust for Philanthropy, 2003.
Changing Sources of Private Giving
Private Giving by Type, 1970
77.1%
10.0%
9.0%3.8%
Individuals
Bequests
Foundations
Corporations
Private Giving by Type, 1980
83.7%
6.0%
5.8%4.7%
Individuals
Bequests
Foundations
Corporations
Total giving = $21 billion Total giving = $48.6 billion
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Source: The New Nonprofit Almanac & Desk Reference, Independent Sector, Urban Institute, 2002 ; Giving USA, AARFC Trust for Philanthropy, 2003.
Changing Sources of Private Giving
Private Giving by Type, 1990
79.5%
7.7%
7.3%5.6%
Individuals
Bequests
Foundations
Corporations
Private Giving by Type, 2000
74.8%
7.9%
12.0%
5.4%
Individuals
Bequests
Foundations
Corporations
Total giving = $98.8 billion Total giving = $203.4 billion
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Giving By Recipient Type, 2002
Religion, 35.0%
Educ atio n, 13.1%
Human Services , 7.7%
Health, 7.8%
Unalloc ated Giving, 12.6%
Public-so ciety Benefit, 4.8%
Arts , Culture & Humanities,
5.1%
Environment/ animals, 2.7%
Internatio nal Af fairs , 1.9%
Foundations (estimate),
9.1%
Source: Giving USA, AARFC Trust for Philanthropy, 2003.
Total Giving = $241 billion
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Private Giving as % of Income
1.8% 1.8%1.6% 1.7% 1.5%
1.8%1.9%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
1970 1975 1980 1985 1990 1995 2000
Year
Perc
ent
Source: Giving USA, AARFC Trust for Philanthropy, 2003.
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PHILANTHROPIC
INSTITUTIONS
Foundations
Federated Fundraising Appeals
Donor Advised Funds
Public Grantmaking Charities
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FOUNDATIONS
Philanthropic foundations are an important
element of the American nonprofit
landscape.
Mechanism through which philanthropicdollars flow to nonprofit organizations,
typically from endowments.
They are of particular interest given theirlink to concentrated wealth and the impact
of their grantmaking.
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Foundations, 2001
61,180 grantmaking foundations,
with $477 billion in assets, and
$30.5 billion in giving. A nearly three-fold increase in assets
and over a three-fold increase in
giving since 1991.
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Foundation Growth, 1991-2001
Number Assets (b) Giving (b)
1991 33,356 $162.907 $9.2111995 40,140 $226.736 $12.261
1999 50,201 $448.610 $23.321
2001 61,180 $476.789 $30.502
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Size Concentration: 2001
The largest 43 foundations$1 B ormore in assets, hold 34.8% of assets and23.8% of giving.
The largest 214 foundations$ 250million or more in assets, hold assets51.4% of assets and 47.4% of giving.
Foundations with under $10 million inassets (56K+) hold 13.8% of assets and25.2% of giving.
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Regional Concentration: 2001
State % of Giving % of Assets
New York 18.8 17.2
California 11.7 13.9Pennsylvania 5.3 5.2
Washington 5.1 8.3
Texas 4.9 5.1
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Foundation Types
Private Independent Foundations
Family Foundations
Corporate Foundations
Operating Foundations
Community Foundations
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Industry Structure: 2001
FoundationType
Number Assets Giving
Independent 89.2% 84.6% 77.7%
Corporate 3.5% 3.3% 10.6%
Community 1% 6.4% 7.9%
Operating 6.3% 5.7% 3.6%
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Funding Priorities, 2001
(percent of total)
Education 26.8
Health 20.5
Human Services 13.8
Arts and Culture 12.2
Public/Social 10.9
Environment 6.2
International 2.4
Science/Tech 2.9
Social Science 2.1
Religion 2.1
Other .1