The Charitable Sector

Hi everyone,

I hope you are enjoying March.  I look forward to the warming weather and beginning, at least in the midwest US, the greening up that occurs.  I am not all that into cold weather, even with my Canadian roots.    So enjoy it no matter where you are.  

For this month, I wanted to add one more layer to my discussion about the nonprofit sector. I believe this article will find some use with your board and others.  It's a good thought jogger.   

Happy March,

Jamie

The Charitable Sector, Philanthropy and Nonprofit Organizations.  Does It Really Matter?
 
Let’s find out why the place we see philanthropy most commonly, the nonprofit sector, matters.
 
The highest purpose of a nonprofit organization is to act for the good of others—the community served by the organization. This noble pursuit is akin to the philanthropic ideals we discussed previously, emphasizing the significance of a mission often taken for granted. To delve deeper into its importance, it's crucial to first understand what defines the nonprofit or charitable sector.
 
Charitable Organizations and Things you May Not Know?

Nonprofit organizations are community-based entities that champion services promoting the public good. They serve as a platform for society to explore its passions, fortify the economy, and instigate community transformation. Filling a void unmet by government or typical business models, nonprofits are community-owned, governed by a board of directors, and legally restricted from distributing profits to individuals. Instead, these profits must be reinvested in the organization.
 
Diverse in scope, nonprofit organizations span education, healthcare, social services, and even include cemeteries and trade associations. In fact, if you volunteer, it's likely for a nonprofit organization. Statistics reveal that the nonprofit sector plays a substantial role in the U.S. workforce, with approximately 10% (nearly 12 million people) employed in this sector.
 
Things You Might Not Know

• On average, individuals spend 52 hours per year volunteering for nonprofits.

• Over 70% of nonprofit organizations rely on financial support from individuals for survival.

• A significant portion of the U.S. healthcare system is comprised of nonprofit hospitals.

• There are over 1.8 million nonprofit organizations in the United States, encompassing places of worship.

• More than 66% of nonprofits operate with budgets under $1,000,000 in annual revenue.

• Individuals with lower incomes contribute a higher percentage of their income to charitable nonprofit organizations.

• If nonprofits were a country, they would boast the world's 5th largest economy, underscoring their substantial influence. This sector is born out of a collective realization that certain needs exist, and there are gaps unaddressed by business or government. The subsequent formation of charitable nonprofit organizations is driven by a "mission and service bottom line," prioritizing societal impact over financial gains.

 
Lets Lose Money Where it Matters Most:

Driven by a mission-centric approach, nonprofits operate with a deliberate financial loss, compensated through diverse revenue streams like earned income, service fees, endowment revenue, grants, government funding, and fundraising. By design, nonprofits become the voices of those they serve, with the board assuming the responsibility of safeguarding the public good.
 
Raising the Floor:

In essence, the nonprofit sector plays an indispensable role in addressing societal needs, championing the public good, and bridging gaps left unattended by traditional entities. The wellbeing of individuals in this country would be left to the service level of government if not for the charitable sector raising the floor of services. The collective impact of nonprofits, driven by a shared mission, extends far beyond mere financial figures, making them a cornerstone of social well-being.  They are unsung heroes that often get overlooked, but actually impact most everyone in society in some form.
 
Action point:

Take a moment and thank someone in a local charitable nonprofit today, there is a good chance no one else has.  Maybe even including yourself.