Last modified: Tuesday, February 3, 2004
New report finds many Indiana nonprofits challenged by small staffs, low revenues
Report is most comprehensive of its kind ever compiled
EDITORS: The full report, including specific data on the seven metropolitan regions and five non-metropolitan counties, can be accessed on the Web at http://www.indiana.edu/~nonprof/results/npsurvey/insprofile.html.
INDIANAPOLIS -- A new report profiling the Indiana nonprofit sector shows that many organizations are constrained by their relatively small sizes and low revenues, among other revealing results.
The report, prepared by researchers at the Indiana University Center on Philanthropy and the School of Public and Environmental Affairs, found a sector made up of a significant number of small organizations with small budgets carrying out a diverse set of activities. The report is believed to be the most comprehensive of its kind ever compiled because it includes all types of nonprofits, including several types of organizations rarely captured in previous studies.
The report found that only 52 percent of nonprofits have any paid staff, 41 percent of which have two or fewer full-time equivalent staff. Many Indiana nonprofits also have low revenues, with one half of organizations reporting revenues of $40,000 or less and expenses of $39,000 or less.
Overall, Indiana nonprofits vary greatly in size with revenues ranging from zero to $412 million and expenses ranging from none to $233 million. Notwithstanding the small size of many organizations, however, previous reports by IU researchers have documented the significant economic role of the nonprofit paid workforce in Indiana.
"With limited staff and financial resources, many nonprofits in Indiana are likely to be constrained in the scope of community needs they can address," said Kirsten Gronbjerg, the project's director who holds the Efroymson Chair in Philanthropy at the Center on Philanthropy, and a professor of public and environmental affairs in nonprofit management at IU Bloomington. "But they address a wide variety of issues, and our data show that Indiana nonprofits provide numerous opportunities for people to get involved in their communities through volunteering and other forms of civic engagement. These are also major contributions by the nonprofit sector."
Indeed, a majority of nonprofits (74 percent) said volunteers are very important or essential to meeting their missions. Volunteers are particularly important to religious and health nonprofits, the report found.
The Indiana Nonprofit Sector: A Profile is based on a survey of more than 2,200 nonprofits conducted in 2002. Unlike previous studies, it incorporates not only charities but also churches, advocacy organizations, voluntary associations and mutual benefit organizations. Mutual benefit organizations include unions, veterans' groups, homeowner associations, hobby clubs and fraternal organizations. Most publicly available listings and previous studies of nonprofits have focused only on charitable nonprofits registered with the Internal Revenue Service and usually just the subset that file financial information with the IRS.
The Profile report is part of a series of reports produced by the Indiana Nonprofits: Scope and Community Dimensions project. This multi-year, multi-phase project is examining the size and composition of the Indiana nonprofit sector, the critical role the more than 60,000 Indiana nonprofits play in communities, and the challenges they face. The report also provides information on nonprofit activity by geographic region, including some of the state's major metropolitan areas and rural communities.
"We know that so much of what nonprofits do is below the radar for many people, including policymakers, and when people do pay attention, they look mainly at the larger, traditional charities," Gronbjerg said. "But there is an incredibly rich nonprofit world beyond this more visible group that plays essential roles in engaging citizens in their communities and addressing issues of common concern. Our focus on all types of nonprofits and the large number of respondents allows us to capture this diversity and highlight the distinctiveness of the different nonprofit fields."
The report includes an examination of seven metropolitan regions throughout the state. A majority of Indiana's nonprofit sector (53 percent) is located in four metro areas -- Northwest Indiana, Indianapolis, Fort Wayne and Evansville. Other key findings include:
-- More than half of Indiana nonprofits are focused in two major fields of activity: human services (29 percent) and religion and spiritual development (24 percent).
-- Nearly half of Indiana nonprofits are quite young; 48 percent were established since 1970. However, 25 percent were established before 1930.
-- Forty-five percent of nonprofits reported either a moderate or significant increase in demand for services, but only 8 percent reported a decrease in the year prior to the survey.
-- Twenty-five percent of nonprofits experienced some decrease in revenues in the three years prior to the survey. That is three times the percentage that reported a decrease in expenses (8 percent). Forty-nine percent of Indiana nonprofits either ran a deficit or broke even during the most recent fiscal year addressed in the survey.
-- Government funding accounted for 34 percent of the sector's combined revenues, but the typical Indiana nonprofit received on average only 9 percent of revenues from government. Other major sources of funding included fees, dues and private sales (37 percent of the combined revenues), donations and gifts (17 percent), special events (3 percent) and other (7 percent).
-- Nearly 75 percent of nonprofits received donations from individuals. Other sources of donations included corporate donors (41 percent of nonprofits), bequests and trusts (24 percent), community foundations (20 percent), other foundations (18 percent), United Way chapters (8 percent), religious federations (6 percent) and other federated funders (5 percent).
-- 55 percent of nonprofits provide all of their services for free and another 36 percent provide at least some services for free.
Gronbjerg also has led a similar project in conjunction with the Donors Forum of Chicago that profiles charities and advocacy organizations in the Illinois nonprofit sector. It is described online at http://www.donorsforum.org/pubs/pubs.html#ilnonprofits.
The IU School of Public and Environmental Affairs, located on six IU campuses, is committed to teaching, research and service in areas such as criminal justice, environmental science, health administration and public policy. The school maintains continuing relations with a large number of public agencies at all levels of government; public and private hospitals and health organizations; and nonprofit organizations and corporations in the private sector. SPEA has earned national distinction for innovative educational programs that combine administrative, social, economic, financial and environmental disciplines.
The Center on Philanthropy at Indiana University, headquartered at Indiana University-Purdue University Indianapolis, is a leading academic center dedicated to increasing the understanding of philanthropy and improving its practice through research, teaching, public service and public affairs programs in philanthropy, fundraising and management of nonprofit organizations.