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Nonprofit Nation presents an overview of the nonprofit sector in the United States. The sector has grown dramatically in the last half century and now comprises 1.8 million registered organizations and several million other associations, including support groups, book clubs, and neighborhood action committees. Nonprofit organizations have annual revenue of $1 trillion and assets of $2 trillion, and account for 5 to 10 percent of the nation's gross domestic product (GDP). Only six foreign nations have a GDP larger than the U.S. nonprofit economy. American nonprofits employ 12 million people, more than the civilian workforce of the federal government and the fifty state governments combined. More than 100 million adults do volunteer work for nonprofits. In 2000, American households, foundations, and corporations gave $203 billion to charity.
Nonprofits have enormous presence in American society through churches, hospitals, soccer camps and Little League baseball, schools and universities, think tanks and research institutes, theaters and symphony orchestras, civil rights and environmental groups, and many other organizations. The nonprofit sector touches every household in some way. This book describes the recent growth and current extent of the sector, its impact on society, key challenges facing nonprofits, and possible future directions.
Nonprofit Nation is written for anyone interested in a general, non-technical overview of the American nonprofit sector. Potential readers include students in undergraduate and graduate courses on nonprofits and philanthropy, boardand staff members of nonprofit agencies, media representatives, government policymakers and their staffs, grantmakers, academics, and non-Americans interested in the U.S. nonprofit sector. My earlier book on this topic, The Third America: The Emergence of the Nonprofit Sector in the United States (O'Neill, 1989), proved useful to a wide variety of audiences; it is my hope that this book will have similarly broad appeal. Both books follow a similar outline; however, Nonprofit Nation includes more extensive and up-to-date statistics on the sector and its major divisions, a full chapter on theories of the sector, and more detailed projections about the future of the sector. The historical components of Nonprofit Nation have been confined to the period 1950-2000, whereas those sections in The Third America covered the entire scope of American history. Both books contain selected issues, challenges, and policy questions relevant to the U.S. nonprofit sector.
Chapter One describes the size, shape, and significance of the U.S. nonprofit sector as a whole. It also deals with several related phenomena, especially the charitable donations and volunteer work that provide a large part of the resources of the sector. Chapter Two summarizes the principal theories of nonprofit existence and activity. Scholars from a variety of disciplines--anthropology, history, sociology, political science, economics--have attempted to explain why nonprofit agencies exist, why they do what they do, and what relationship they have to the business, government, and household sectors. We are still far from a "grand unified theory" of the nonprofit sector, but this chapter suggests some elements of such a theory.
Each of the next nine chapters describes one of the major subsectors of the American nonprofit world. There has been much scholarly discussion and debate about the partitioning of the nonprofit sector. My ninefold structure, which I also used in The Third America (O'Neill, 1989), is largely consistent with the main government and private classification systems. For example, all schemata of the sector include religion, education, health care, social or human services, grantmaking, and arts and culture as major divisions. However, I give more attention than some do to advocacy, international assistance, and mutual benefit activity.
Each of the subsector chapters is in turn divided into two parts: "Scope and Impact" and "Trends and Issues." The former discusses the societal impact of the subsector and details its size and shape, including number and types of organizations; revenue, expenditures, and assets; number and characteristics of paid staff and volunteers; number of clients or customers; and other such information. The latter describes key trends in the subsector from 1950 to 2000 and highlights some issues and challenges facing the subsector. Readers interested in more historical background may consult my historical sketches in the subsector chapters of The Third America (O'Neill, 1989) and find more extensive and systematic treatments in the works of nonprofit sector historians Bremner (1988), Hall (1987, 1992), Hammack (1998, 2001), and others mentioned in the "History" section in Chapter Two.
Chapter Three discusses religious organizations. Religion is by several measures the largest part of the American nonprofit sector, and its activities have had a major role in shaping other parts of the sector, especially education, health care, and social services.
Chapter Four deals with social service, from soup kitchens to suicide prevention centers. Human service agencies may be the most familiar and universally appealing part of the nonprofit sector and are broadly supported by government, foundations, corporations, individuals, and religious groups.
Chapter Five portrays health care, which accounts for half the revenue and employment of the entire nonprofit sector. Nonprofit hospitals, clinics, biomedical research institutes, and other agencies form a large and critically important part of the nation's health system.
Chapter Six concerns education and research. Private nonprofit schools, colleges, universities, and research institutes educate and enlighten millions of American citizens. The influence of these organizations lives on in their graduates and publications. For example, twelve of the eighteen U.S. presidents in the twentieth century attended a private college or university.
Chapter Seven investigates advocacy organizations. These groups are part of a long historical tradition in the United States, from the temperance and abolition societies of the early nineteenth century to the environmental and women's groups of the late twentieth century. By revenue and employment measures, advocacy is one of the smallest parts of the nonprofit sector, but its influence on public policy is far greater than these numbers would indicate. Chapter Eight studies the world of arts and culture, where nonprofits provide a home for much of society's creative expression and cultural preservation. Like religion and advocacy, the arts world gets little government support and has many low-paid workers and volunteers but has great influence on the ideas, values, language, and symbols of society.
Chapter Nine focuses on American nonprofits that work in other countries, primarily in emergency relief and economic development but also for international understanding and peace, human rights, and other goals. The increasing globalization of the world's economy has created special needs and opportunities for U.S. nonprofits working abroad.
Chapter Ten examines institutional grantmakers: foundations, corporate philanthropy, and United Way and other federated funders. Although institutional funders supply a small portion of total nonprofit revenue, they play a vitally important role through their support of promising new ideas and time-tested programs.
Chapter Eleven explores the often ignored world of mutual benefit organizations. These "noncharitable" nonprofits focus primarily on the interests and needs of their members but also benefit society in many ways.
Chapter Twelve concludes the book with predictions of major trends in the American nonprofit sector during the first quarter of the twenty-first century.
If the history of the U.S. nonprofit sector in the last fifty years demonstrates anything, it is that virtually all measures will change, most of them upward, and that some measures will change significantly even in the space of a few years. However, there is a great deal more stability in the percentages--the proportions. For example, gifts and bequests from individuals accounted for 87 percent of American charitable giving in 1970 and 83 percent in 2000, whereas the amount of gifts and bequests rose ninefold in current dollars and doubled in inflation-adjusted dollars during that period (American Association of Fundraising Counsel, 2001, pp. 150-151). Similarly, total giving as a percentage of GDP and individual giving as a percentage of personal income have remained highly constant, at about 2 percent, during the last three decades (American Association of Fundraising Counsel, 2001, pp. 158-159). Both basic data and proportions are important to understanding the work of the nonprofit sector. In addition to presenting the basic data and proportions, I have also indicated where the reader can find more detailed and updated statistical information. Thanks to the miracle of the Internet, there are now many data sources literally at one's fingertips; thus the reader will see "www" and "http" references as well as the traditional books, journals, and reports. Finally, I will occasionally use round numbers in the text to refer to numbers in the tables that are not round (for example, "fifty thousand" for 49,827).
My thanks to Mark Chaves, Kirsten Grønbjerg, Roger Lohmann, Maurice Penner, Bruce Sievers, and David Horton Smith for reading and commenting on various parts of this book. I am grateful to the University of San Francisco for the sabbatical year during which I did most of the work on this book and to Trinity College Dublin for its hospitality and support during three months of that year. Students and academic colleagues too numerous to mention helped me clarify the issues and information contained in these pages.
1. Nonprofit Nation.
4. Social Service.
5. Health Care.
6. Education and Research.
8. Arts and Culture.
11. Mutual Benefit.