1. Nonprofit 101
November 2010

2. Agenda
• What is a Nonprofit?
• Nonprofit Distinguishing Characteristics
• Nonprofit Resources: Where does the
money come from?
• Nonprofit Life Cycle

3. Your Presenter
• Alliance CEO 5 Years
• NPower
• Former Lobbyist in AZ
• 25 years Nonprofit Jobs/Boards
• Chair, National Council of Nonprofits

4. Nonprofits in the U.S.Nonprofits in the U.S.
-80,000
20,000
120,000
220,000
320,000
420,000
520,000
620,000
720,000
820,000
920,000
1982 2005
200% Increase in Number of
Public Charities
• Nonprofits now
employ 10% of the
nation’s private
workers, 25% in
Washington, D.C.,
and 32% in some
other cities

5. Nonprofits in the U.S.Nonprofits in the U.S.
• Nonprofits represent
$800 billion in annual
purchasing power
• Nonprofit expenditures
account for 8.5% of
national income
• Nonprofit sector is the 3rd
largest contributor to the
U.S. GDP, after retail
trade and wholesale trade

6. Arizona Nonprofits
More than 20,000 operating – diverse

7. Arizona Nonprofits
• $18 billion impact (450
Super Bowls/year)
• More than 120,000
paid employees
• Paid/unpaid workforce
larger than govt.

8. Arizona Nonprofits
• 60% of Arizonans
volunteer time
• 60% nonprofits
have revenues
below $250,000

9. What is a Nonprofit?

10. What is a Nonprofit?
• Other Terms: Non-profit, Not For Profit, Charity,
NGO, Voluntary Org, Social Sector, Third
Sector, Independent Sector, 501c3, Tax Exempt
• Community Investment Organization
• Community Benefit Organizations
• Social Profit Organization

11. What is a Nonprofit?
2 defining criteria

12. What is a Nonprofit?
Owners (no stockholders)
• For-Profit: Individuals, Partners,
Shareholders
• Government: “The People”
• Nonprofit: ???
1

13. What is a Nonprofit?
Owners (no stockholders)
1

14. What is a Nonprofit?
Tax Exemption
2

15. What is a Nonprofit?
Tax Exemption
• Corporate Income Tax – state &
federal exemptions
• Payroll taxes
• Sales taxes
• Property taxes
2

16. What is a Nonprofit?
Tax Exemption
• Annual reporting: Form 990
• Available at www.guidestar.org2

17. Nonprofit Characteristics
6 defining characteristics6 defining characteristics

18. Nonprofit Characteristics
Mission Focus
1

19. Nonprofit Characteristics
Social ROI
2

20. Nonprofit Characteristics
Assessment of program outcomes
3

21. Nonprofit Characteristics
Role of
Governing
Boards 4

22. Nonprofit Characteristics
Involvement
of volunteers
5

23. Nonprofit Characteristics
Culture
6

24. Nonprofits - Not Unique
• Skill level of staff
– Hard to pay for
top talent
• Scarce
resources

25. Where does the money come
from?
• Donations
• Government
• Earned Income

26. Sources of Nonprofit Income
Earned 43%
Government 32%
Donated (All sources) 25%

27. Earned Government Donated
Human Services 25% 60% 15%
Arts 50% 10% 40%
Health 54% 45% 1%
Education 70% 10% 20%
International 20% 20% 60%
Income Sources by sub-sector

28. Comparative Gross Expenditures
U.S. GDP ca. $12 trillion
Government Expenditures ca. $4 trillion
Nonprofit Expenditures ca. $1 trillion
Sources of Nonprofit Income*
(all subsectors)
Earned 43%
Government 32%
Donated (All sources) 25%
Earned Gov't Donated
Human Services 25% 60% 15%
Arts 50% 10% 40%
Health 54% 45% 1%
Education 70% 10% 20%
International 20% 20% 60%
Income Sources by Sub sector*

29. Sources and Uses ofSources and Uses of
Charitable ContributionsCharitable Contributions
Donations to Nonprofits, in Billions
Individual
$229
74%
Foundation
$39
13%
Bequests
$23
8%
Corporate
$16
5%
Source: Giving USA Foundation, Giving USA
Total Giving = about $300 billion

30. Sources and Uses ofSources and Uses of
Charitable ContributionsCharitable Contributions
Giving by Nonprofit Type, in Billions
Religion
$102
37%
Foundations
$28
10% Human Services
$30
10%
Environment/Animals
$7
2%
International
$13
5%
Arts/Culture
$14
5%
Social Benefit
$23
8%
Health
$23
8%
Education
$43
15%
Source: Giving USA Foundation, Giving USA

31. 31% of private
foundation grants go to
education ($54.9 M);
another 14% are
allocated to Social and
Human Services ($23.9
M) and another 12.6%
($22.4 M) are allocated
to Community
Development
Where Arizona FoundationWhere Arizona Foundation
Dollars Are GoingDollars Are Going
Source: Arizona Grantmakers Forum

32. Nonprofit Life Cycles
Concept
Incorporation
Growth
Source: TCC Group Core Capacity Assessment

33. Questions?
• Resources:
– Alliance: www.arizonanonprofits.org
– National:
www.councilofnonprofits.org/resources
– “Nonprofitspeak”: Glossary of Terms
http://www.idealist.org/media/pdf/career/guide/App

34. Next Webinar
• Dec 14 10:00 am
Topic: Nonprofit Collaboration