The Health of the U.S. Nonprofit Sector

Hello everyone,

Welcome to May!

There’s something about this month—maybe it’s the full return of spring or the anticipation of summer—that brings a sense of renewal and possibility. I hope you’re enjoying the season wherever you are.

This month, I wanted to share some recent data that caught my attention and feels particularly relevant to all of us working in or alongside the nonprofit space. The Health of the U.S. Nonprofit Sector: Annual Review (released in December 2024 by Independent Sector) is a comprehensive look at where we stand as a sector—economically, socially, and in terms of public trust.

It’s packed with insights that I think could serve as great conversation starters for your team or board. Whether you're reflecting on workforce challenges, donor trends, or the role of advocacy, there’s something in here to jog thinking and perhaps even inspire your next steps.

I hope it proves useful in the work you're doing to lead, serve, and sustain mission-driven impact.

Wishing you a meaningful and momentum-filled May,

Jamie
 
"Health of the U.S. Nonprofit Sector: Annual Review, December 2024," provides a comprehensive analysis of the state of the nonprofit sector in the United States, focusing on its economic contributions, workforce challenges, public trust, governance, and advocacy efforts. Key highlights include:
1. Economy & Finance 

• Nonprofits contributed over $1.4 trillion to the U.S. economy in 2023, accounting for 5.2% of GDP. 

• Charitable overall donors decreasing by 3.4% in 2023, though new donors increased by 2.3%. 

2. Workforce

• Nonprofits employ 10% of the private sector workforce, paying $870 billion in wages in 2022. 

• The workforce is predominantly female (67%) and highly educated, with over 70% holding college degrees. 

• Economic hardship persists, with 22% of nonprofit workers earning below the ALICE threshold, which measures income needed for basic survival. 

3. Trust & Governance 

• Nonprofits are among the most trusted institutions in America, with 57% of respondents expressing high trust in 2024.

• Public trust in nonprofits is higher than in government, media, and corporations, but concerns about partisanship remain. 

• Diversity in leadership is limited, with 78% of nonprofit CEOs and board chairs being white. 

4. Public Policy & Advocacy 

• Advocacy is critical for nonprofits to influence policy and fulfill their missions, yet only 18% engage in lobbying and advocacy. 

• Many nonprofit leaders struggle to understand legal rules around advocacy, limiting their participation. 

• Advocacy strengthens civic engagement, with nonprofits playing a key role in voter education and policy debates. 

Challenges and Recommendations

• The sector faces challenging, workforce recruitment and retention issues, and economic hardship among employees. 

• Independent Sector advocates for better data collection, equitable tax incentives, and clearer rules for nonprofit advocacy. 

• Efforts to strengthen trust include eliminating tax form 1023-EZ to prevent fraudulent nonprofit applications. 

Conclusion
The report emphasizes the importance of a healthy, trusted, and equitable nonprofit sector for a thriving civil society and democracy. "charitable sector that is healthy, trusted, and equitable is essential to a nation where all people thrive in a vibrant civil society and a just democracy." (Pg. 3)
For more information, visit Independent Sector's website: independentsector.org.