Nonprofit organizations are pivotal in addressing social and environmental issues without profit as their primary goal.
They play a crucial role in addressing pressing global challenges like poverty, health, education, and human rights, and also provide essential services and advocacy to various communities.
There are several key nonprofit statistics and facts to consider this year that emphasize the sector’s influence on small businesses, with many of them being classified as such themselves.
Recent trends also indicate that NGOs confront a variety of difficulties and possibilities, ranging from fundraising and marketing to governance and impact measurement, making it critical for them to adapt and survive in an ever-changing environment.
Let’s dive into the statistics that can help you understand the nonprofit sector’s current condition and developments, as well as the best practices for you to succeed.
Top Nonprofit Stats
- Over 1.8 million nonprofits exist in the U.S., accounting for approximately 10% of the national workforce and 5.6% of the GDP.
- Nonprofits generated $1.4 trillion in revenue in 2022, with tax exemptions enabling them to allocate more resources for public service.
- U.S. nonprofits employed the third largest workforce, surpassing several major industries, with 12.5 million paid workers.
- Churches, schools, and foundations constitute nearly 40% of all nonprofits in the U.S., while 15% are classic civil, social, and business engagement entities.
- Small businesses donate 250% more than larger businesses to nonprofits and societal causes.
Nonprofit organizations are diverse and dynamic, ranging from small grassroots groups to large international agencies.
They operate in various fields, such as education, health, environment, arts, human rights, and more.
Here are some general statistics that show the size and scope of the nonprofit sector.
There are over 1.8 million nonprofits in the U.S. (Urban.org)
This figure includes public charities, private foundations, and other nonprofit groups such as chambers of commerce, fraternal organizations, and civic leagues.
The U.S. has the world’s largest nonprofit sector, accounting for over 10% of the national workforce and 5.6% of GDP, demonstrating a tremendous demand for social good.
The nonprofit sector generated $1.4 trillion in revenue in 2022. (Independentsector.org)
This includes money received from contributions, grants, fees for goods and services, investments, and other sources.
Nonprofits are exempt from paying taxes on their revenues, which allows them to spend that money to deliver public services.
Nonprofits employ America’s third-largest workforce. (John Hopkin’s University Study)
With 12.5 million paid workers, NGOs in the United States have the third biggest workforce of any industry in the country.
This exceeded the workforce of the nation’s finance and insurance industries by more than twice, and the construction industry by 81%.
Nonprofit Market Statistics
Nonprofit organizations operate in a competitive and complicated market, where they must attract and retain funders, volunteers, partners, and beneficiaries.
They must also adapt to the changing demands and preferences of their stakeholders, as well as evolving technology and innovations.
Here are some market figures that indicate how NGOs are functioning and evolving in 2023.
Churches, schools, and foundations are the dominant players in the nonprofit sector, comprising nearly 40% of all nonprofits in the U.S. (causeiq)
These institutions play a pivotal role in various aspects of community well-being, education, and charitable endeavors.
Another 15% of nonprofit organizations fall under the category of classic civil, social, and business engagement entities, encompassing little leagues, chambers of commerce, and fraternal organizations.
Email marketing remains a key tool for nonprofits. (freewill.com)
70% of nonprofit supporters express a preference for receiving communications through email.
This indicates that email remains the most favored and effective channel for engaging with nonprofit supporters.
In contrast, only 7% of supporters prefer receiving communications through physical mail, and 6% favor social media.
Data obtained from the BLS indicates that an overwhelming majority, approximately 97.7%, of nonprofit firms can be classified as “small businesses”. (Bureau of Labor Statistics)
These small nonprofit organizations collectively employ nearly 5 million individuals and contribute significantly to the nonprofit sector with over $190 billion in payrolls.
This data underscores the prevalence and economic impact of small nonprofit entities within the broader nonprofit landscape.
How Small Businesses Are Using Nonprofits
Small businesses are an important part of the economy and society, creating jobs, innovation, and value.
They also have a unique opportunity to leverage nonprofits for their social responsibility and impact goals.
Here are some statistics that show how small businesses are using nonprofits in 2023:
75% of small business owners donate an average of 6% of their profits to charitable organizations annually. (Score.org)
This statistic emphasizes the enormous philanthropic donations made by small business owners, with three-quarters of them contributing a percentage of their revenues to charity causes.
Their average yearly gift of 6% of revenues demonstrates a dedication to corporate social responsibility, contributing to the benefit of communities and charity organizations.
90% of corporations found that partnering with reputable nonprofit organizations builds trust, while 85% believed it enhanced their capacity for societal impact. (Score.org)
These statistics emphasize the strong endorsement of corporate-nonprofit collaborations, showcasing how such partnerships are instrumental in fostering trust and driving meaningful societal change.
Corporations see these alliances as a valuable avenue for both enhancing their reputations and contributing to the betterment of communities and social causes.
Small businesses donate 250% more than larger businesses to nonprofits. (Score.org)
This statistic shows the significant impact of small businesses on local charitable endeavors.
Small enterprises, despite their size, contribute substantially more than larger corporations to support nonprofits and community initiatives, highlighting the integral role they play in fostering the well-being of their local communities.
Nonprofits Financial Statistics
Nonprofit organizations rely on a variety of revenue streams, including donations, grants, program fees, and investments, which can significantly impact their financial health.
Examining how these funding sources evolve over time and their relative proportions can provide valuable insights into an organization’s financial stability and sustainability.
Only 10% of overall nonprofit total revenue comes from individual donations. (Zippia)
This relatively low percentage underscores the importance of diversifying revenue streams to ensure financial stability, as heavy dependence on individual contributions can be risky.
On the other hand, the substantial 80% of revenue originating from government grants or contracts underscores the vital role of public sector support in sustaining nonprofits.
Therefore, nonprofits should carefully manage their relationships with government entities and consider strategies for diversification to mitigate potential financial risks.
60% of nonprofits have emergency reserves, up from 49% in 2018. (Stanford Social Innovation Review)
This is a significant development, indicating that a larger proportion of nonprofits have recognized the importance of setting aside funds for unexpected events, such as economic downturns, disasters, or unforeseen operational challenges.
Nonprofits with reserves at this level are better positioned to handle crises and maintain their essential programs and services during difficult times, ensuring their long-term sustainability.
K-12 nonprofits receive the highest average online donation amount. (Blackbaud)
At $1,640, K-12 (i.e. educational institutions) receive the most support. Donors may be particularly inclined to invest in the education of young individuals, perceiving a direct impact on the future.
- Healthcare nonprofits received the second-highest average online donation at $403.
- Higher education institutions also received substantial online donations, with an average of $387.
- Nonprofits in the public and society benefit category received a lower average online donation of $241.
Tailoring fundraising strategies to align with these differences can help nonprofits optimize their online fundraising efforts.
Recent Nonprofits Trends
Recent trends in the nonprofit market show us the impact and importance of social media and the digital marketing domain.
The post-COVID impact can be seen in this sector too.
For every 1,000 email addresses, nonprofits had an average of 685 Facebook followers, 208 Twitter followers, and 160 Instagram followers. (M+R Benchmarks Report)
On average, nonprofits maintained a substantial presence on Facebook, with 685 fans, as well as a significant presence on Twitter and Instagram.
These follower counts demonstrate the diverse channels nonprofits utilize to connect with their audiences and promote their causes, leveraging the power of social media to amplify their impact.
Online monthly giving increased by 11%, while one-time giving revenue declined by 12%. Monthly giving accounted for 28% of all online revenue in 2022. (M+R Benchmarks Report)
This statistic indicates a notable shift in the giving patterns of donors. Monthly contributions saw a significant 11% increase, highlighting the growing popularity of sustained giving arrangements.
Conversely, one-time revenue experienced a 12% decline. Monthly giving, constituting 28% of all online revenue, underscores its importance as a reliable and sustainable source of income for nonprofits, providing them with greater financial stability and the ability to plan for the long term.
Nonprofits play an important role in the well-being of society and the environment because they address a variety of difficulties and needs that are sometimes ignored or underserved by other sectors.
The charity sector is also dynamic and adaptable, adapting to changing conditions and seizing new possibilities.
These nonprofit statistics show some of the key aspects and trends of this sector in 2023, which can help us understand its role and impact better.
We hope that these stats have given you a better understanding of the nonprofit sector and its challenges and opportunities.