Monday, August 10, 2015

The Non-Profit Sector Share Of The US Economy Is As Large As The Information Technology Sector

From Tax Foundation, "Revenue Figures for Charitable Organizations Are at an All-Time High" by Scott Greenberg:
Charitable Organization Revenues 1985-2012
Source: Tax Foundation

Contrary to what you might expect, charitable organizations do not make the bulk of their revenues through donations. In 2012, only 21.3% of revenue for 501(c)3 organizations came from contributions, gifts, and grants. Instead, charitable organizations in the United States are largely funded by "program service revenue" – such as the tuition received by non-profit universities, or the medical bills collected by non-profit hospitals.

The non-profit sector represents a substantial share of the United States economy, totaling $887.3 billion and accounting for 5.4% of GDP (about the same size as the information technology industry.) It is also one of the most rapidly growing parts of the economy, with overall employment increasing by 17% between 2000 and 2010, significantly faster than private business job growth. Now, the recent IRS figures confirm that charitable organizations are receiving higher revenues than ever.

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