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What’s Going on with Nonprofits?

By October 20, 2022No Comments

We know that there are many changes going on in our society and in our world in general. As well, there are changes happening in the nonprofit sector. The Independent Sector has recently completed a quarterly review of the Health of the Nonprofit Sector. The report contains information that can be used by nonprofit and ministry leaders to determine how best to use resources and how to move forward in various areas.

In the second quarter of 2022, nonprofits contributed $1.4 trillion to the US economy. This is the second quarter in a row where growth in the gross value added by nonprofits exceeded the GDP! In terms of charitable giving, giving is returning to pre-pandemic levels. The amount of money donated to nonprofits and ministries is increasing; however, the number of donors is decreasing. This means your organization may be receiving larger donations but from fewer people.

Additionally, The Fundraising Effectiveness Project reports that donors are reverting to their pre-pandemic giving habits. In other words, they are giving to familiar causes and issues instead of focusing their giving on emergency or crisis-based issues. Interestingly, smaller organizations, on average, are seeing an increase in donations while larger organizations are seeing a decrease in giving.

Nonprofits employ a significant portion of the US workforce. In the first quarter of 2022, nonprofits experienced a 0.4% change in the number of workers. Nonprofit employees worked an average of 38.9 hours per week and the average age of nonprofit employees is 43.2 years. While many nonprofit and ministry employees feel overworked, the research shows nonprofit employees work fewer hours than other sectors (business, government, etc.).

Most nonprofit employees are female (65.9%) and incomes are trending down within the sector.

  • 6% earn less than $40,000 – salaries decreased by 39.5%
  • 1% earn between $40,000 -$74,999 – salaries decreased by 7.3%
  • 7% earn between $75,000 – $149,000 – salaries decreased by 8.6%

Most nonprofit leaders know that paid workers are not the only source of human capital. Volunteers are a critical source of knowledge, skill and experience that helps nonprofits to serve their communities. In 2021, there was a significant increase in the number of volunteers however, volunteers are volunteering less frequently than prior to the pandemic. In 2021, people volunteered, on average 43 hours a year.

Volunteering is more common in some areas than in others. Volunteering by cause:

  • Religion – 15%
  • Community – 14%
  • Health – 14%
  • Animals – 13%
  • Education – 11%
  • Culture – 9%

This report provides some useful information for nonprofit and ministry leaders, but we may wonder what to do with it.

Some key take-aways:

Nonprofits and ministries are going to need to continue building the number of small donors to their organization. Of course, large donors are important as well, but small donors are vital to the success of nonprofits. What is your plan for attracting additional donors? How are you including younger donors?

Many nonprofit employees perceive they are working more than perhaps they are really working. How can you as a nonprofit leader help your employees to feel that they a good work/life balance—one that does not feel overwhelming or tiring? Can you develop some strategies to increase salaries (particularly at the lower end)?

Volunteers connect with organizations whose missions they feel connected to. How are you sharing information about your organization? Identify specific activities that can be completed by volunteers.

Do you need help? Contact us today, we can help!

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