Florida's Nonprofit Sector: An Economic Force

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1 The Johns Hopkins Center for Civil Society Studies The Johns Hopkins Center for Civil Society Studies seeks to improve understanding and the effective functioning of not-for-profit, philanthropic, or civil society organizations in the United States and throughout the world in order to enhance the contribution these organizations can make to democracy and the quality of human life. The Center is part of the Johns Hopkins Institute for Policy Studies and carries out its work through a combination of research, training, and information sharing both domestically and internationally. The Center s Nonprofit Economic Data Project draws on a variety of data sources to provide new insights into the scope and structure of America s non- profit sector. Full text versions of all project reports are available at Florida Philanthropic Network Florida s nonprofit sector contributes significantly to the economic and social well-being of Floridians. Florida Philanthropic Network is a statewide coalition of 22 charitable foundations that seeks to maximize the contributions of Florida s nonprofit sector by: Promoting philanthropy in Florida Fostering cooperation and collaboration among the business, government, and nonprofit sectors Advancing public policy that includes nonprofit sector perspectives Florida Philanthropic Network commissions research to illuminate and define nonprofit enterprise in Florida. For more information on Florida Philanthropic Network s mission and research, please visit Center for Civil Society Studies Institute for Policy Studies The Johns Hopkins University 3400 N. Charles St. Wyman Park Bldg., 5th Floor Baltimore, MD , USA Phone: Fax: sgeller@jhu.edu Website: Florida Philanthropic Network 199 E. Welbourne Ave., Suite 203 Winter Park, FL Phone: admin@fpnetwork.org Website: Johns Hopkins Nonprofit Economic Data Project Florida's Nonprofit Sector: An Economic Force Lester M. Salamon Nonprofit Economic Data Bulletin Number 29 Stephanie Lessans Geller S. Wojciech Sokolowski February 2008 A Joint Report of the Johns Hopkins Center for Civil Society Studies and the Florida Philanthropic Network

2 Thank you to the Foundation Partners of Florida Philanthropic Network who lead and fund the organization s research program: Allegany Franciscan Ministries Community Foundation of Central Florida Conn Memorial Foundation Dade Community Foundation Darden Restaurants Foundation Edyth Bush Charitable Foundation Elizabeth Morse Genius Foundation Fanny Landwirth Foundation Gulf Coast Community Foundation of Venice Health Foundation of South Florida Jessie Ball dupont Fund John S. and James L. Knight Foundation Paul E. and Klare N. Reinhold Foundation St. Joe Community Foundation The Blue Foundation for a Healthy Florida The Community Foundation in Jacksonville The Eckerd Family Foundation The Florida Bar Foundation The Frank E. Duckwall Foundation The Martin Andersen-Gracia Andersen Foundation The Quantum Foundation Winter Park Health Foundation The Johns Hopkins Nonprofit Economic Data Project State and Regional Nonprofit Economic Data Bulletins California Nonprofit Employment (Nonprofit Employment Bulletin No. 7, 2001) Connecticut Nonprofit Employment (Nonprofit Employment Bulletin No. 8, 2002) Georgia Nonprofit Employment (Nonprofit Employment Bulletin No. 16, 2004) Illinois Nonprofit Employment Update (Nonprofit Employment Bulletin No. 21, 2005) Illinois Nonprofit Employment (Nonprofit Employment Bulletin No. 4, 2001) Indiana Nonprofit Employment (Nonprofit Employment Bulletin No. 22,2005) Louisiana Nonprofit Employment Update (Nonprofit Employment Bulletin No. 24, 2005) Louisiana Nonprofit Employment (Nonprofit Employment Bulletin No. 5, 2001) Maine Nonprofit Employment (Nonprofit Employment Bulletin No. 12, 2003) Maryland Nonprofit Employment Update (Nonprofit Employment Bulletin No. 25, 2006) Maryland Nonprofit Employment Update (Nonprofit Employment Bulletin No. 23, 2005) Maryland Nonprofit Employment Update (Nonprofit Employment Bulletin No. 17, 2004) Maryland Nonprofit Employment Update (Nonprofit Employment Bulletin No. 11, 2003) Maryland Nonprofit Employment (Nonprofit Employment Bulletin No. 9, 2002) Maryland Nonprofit Employment (Nonprofit Employment Bulletin No. 3, 2001) Maryland s Nonprofit Sector: A Major Economic Force (Nonprofit Employment Bulletin No. 1, 2000) North Carolina Nonprofit Employment (Nonprofit Employment Bulletin No. 19, 2005) Ohio Nonprofit Employment (Nonprofit Employment Bulletin No. 15, 2004) Pennsylvania Nonprofit Employment (Nonprofit Employment Bulletin No. 18, 2005) South Carolina Nonprofit Employment (Nonprofit Employment Bulletin No. 6, 2001) Texas Nonprofit Employment (Nonprofit Employment Bulletin No. 10, 2003) Texas Nonprofit Employment Update (Nonprofit Employment Bulletin No. 27, 2007) Washington, D.C. Nonprofit Employment in the Greater Washington Region (Nonprofit Employment Bulletin No. 20, 2005) West Virginia Nonprofit Employment (Nonprofit Employment Bulletin No. 2, 2001) This report was prepared by Lester M. Salamon, Stephanie Lessans Geller, and Wojciech Sokolowski at the Center for Civil Society Studies, Institute for Policy Studies, Johns Hopkins University. Copyright 2008, Lester M. Salamon All rights reserved Printed in the United States of America Acknowledgments We are grateful to the Florida Philanthropic Network Research Committee and staff, including Committee Chair Dr. Sherry P. Magill; Committee Members Mark Brewer, David A. Odahowski, and Susan B. Towler; and staff Kelly A. Morrell and Amanda E. Schumer. We would also like to thank Hillary Belzer (design and production), Mimi Bilzor (editorial guidance), and Susan Lorentz and Valerie Eubert (technical support) at The Johns Hopkins University. Suggested Citation Florida s Nonprofit Sector: An Economic Force, by Lester M. Salamon, Stephanie Lessans Geller, and Wojciech Sokolowski (Baltimore: Johns Hopkins Center for Civil Society Studies, 2008). Copies of this report are available on the Center for Civil Society Studies website ( National Nonprofit Economic Data Bulletins Employment in America s Charities: A National Overview (Nonprofit Employment Bulletin No. 26, 2006) In Search of the Nonprofit Sector: Improving the State of the Art (Nonprofit Employment Bulletin No. 13, 2003). Also published as: Salamon, Lester M., and Sarah Dewees In Search of the Nonprofit Sector: Improving the State of the Art. Working Papers of the Johns Hopkins Center for Civil Society Studies. Baltimore: Johns Hopkins Center for Civil Society Studies. What Nonprofit Wage Deficit? (Nonprofit Employment Bulletin No. 14, 2003). Also published as: Salamon, Lester M. Winter What Nonprofit Wage Deficit? The Nonprofit Quarterly, pp Baltimore: Johns Hopkins Center for Civil Society Studies. Nonprofit Organizations: New Insights from QCEW Data (September 2005). Also published as: Salamon, Lester M., and S. Wojciech Sokolowski. September Nonprofit Organizations: New Insight from QCEW Data. Monthly Labor Review, pp Washington, D.C.: U.S. Bureau of Labor Statistics. Full text available on the Center for Civil Society Studies website:

3 FLORIDA S NONPROFIT SECTOR: AN ECONOMIC FORCE A JOINT REPORT OF THE JOHNS HOPKINS NONPROFIT ECONOMIC DATA PROJECT AND THE FLORIDA PHILANTHROPIC NETWORK STEPHANIE LESSANS GELLER LESTER M. SALAMON S. WOJCIECH SOKOLOWSKI KEY FINDINGS A MAJOR ECONOMIC PRESENCE 1. With nearly 630,000 workers, including 380,000 paid workers and an additional 250,000 fulltime equivalent volunteer workers, Florida s nonprofit sector is the fourth largest employer among Florida industries (see page 3). 2. Generating $48.1 billion in revenues, expending over $44.5 billion, and holding nearly $76.2 billion in total assets in 2005, the Florida nonprofit sector has a substantial financial footprint. The state also boasts a foundation sector with an additional $15.1 billion in assets (see pages 3-4 and 12). 3. Though sizeable, Florida s nonprofit sector is proportionally smaller than its counterparts elsewhere in the nation. Thus, the nonprofit share of total employment in Florida is below the U.S. average, the Southeast average, and the averages in other major states (see page 4). A DIVERSE SECTOR 4. Nonprofits in Florida are active in a wide range of fields, including the arts, education, health, social services, and civic life (see page 5). 5. Florida nonprofits are also geographically diverse. Two-thirds of the state s nonprofit organizations and over three-quarters of the state s nonprofit workers are located within three regions the Southeast Region, the Tampa Bay Region, and the East Central Region. But nonprofits account for above average shares of total employment in other regions, including the North Central Region, the Northeast Region, and the East Central Region (see page 7). REVENUES AND GENEROSITY 6. The major sources of Florida nonprofit revenue are government and fees for service, which accounted for at least 75 percent of Florida s nonprofit revenue in 2005 (see page 9). 7. Charitable giving in Florida, while substantial, falls 5 percent below the U.S. average when measured as a share of adjusted gross income (see page 10). 8. Over two and a half million Floridians, or 18.6 percent of the adult population, volunteered in 2006 alone. While sizeable, this falls 30 percent below the U.S. rate (see page 11). A GROWING SECTOR 9. Florida nonprofit expenditures grew by 97 percent after adjusting for inflation between 1992 and This rate exceeded the growth in U.S. nonprofit expenditures (70 percent) and the growth in U.S. gross domestic product (GDP) (54 percent) (see page 13). 10. Between 2002 and 2005, nonprofit employment in Florida grew twice as fast as the state s public sector employment and nearly as fast as for-profit employment (see page 15). 11. Although nonprofit employment is increasing, however, in a number of major fields employment in for-profit firms is growing more rapidly. Reflecting this, Florida nonprofits are losing market share in a number of significant fields, including higher education, hospitals, youth development and social assistance, and nursing homes (see page 16). NONPROFIT WAGES 12. The overall average weekly wages of nonprofit workers are lower than those of both government and for-profit workers, but in industries in which nonprofits and for-profits are both involved, nonprofit average weekly wages are generally higher than comparable for-profit wages (see pages 17-18).

4 CHAPTER I: INTRODUCTION Largely invisible to most Florida residents is a set of institutions that, taken together, constitute the state s fourth largest employer, that provide the lion s share of the available health, cultural, and social services, that enliven the state s democracy, and that add immeasurably to its citizens overall quality of life. This mystery component of Florida life is the vast array of private hospitals, universities, symphonies, art galleries, soup kitchens, nursing homes, family service agencies, churches, civic agencies, and many more that comprise Florida s private nonprofit sector. These organizations play a far more important part in the Florida economy and society than is widely recognized. Yet their impact and importance are rarely examined and are therefore regularly overlooked. The present report seeks to take some major steps toward bringing this invisible sector out of the shadows and demonstrating the enormous stake that Floridians have in its continued viability and health. More specifically, the report focuses on six major topics: The enormous scale of Florida s nonprofit sector the numbers of organizations and their expenditures, assets, and numbers of workers; The distribution of this nonprofit economic scale by field, region, and size of organization; The sources of nonprofit revenue, and the relative position of its charitable support; The dynamics of recent nonprofit growth; The resulting changes in the market position of nonprofit providers; and The relative wage levels of nonprofit and for-profit employers. What emerges from this discussion is a picture of a set of institutions with far greater economic heft than is commonly recognized, a diverse and dynamic sector, but also one that trails the nation along a number of important dimensions and that therefore has even greater potential than it is now exhibiting. Before turning to these findings, however, it may be useful to describe the context within which Florida s nonprofit organizations are operating because this defines the needs to which these organizations must respond. In addition, it will be useful to spell out a bit more precisely what the nonprofit sector is and what portion of it is the focus of this report. Florida Realities: The Context of Nonprofit Operations Florida nonprofits are operating in a state that is not only large, but also expanding quite rapidly. In 2006, Florida had 18.3 million people, making it the fourth largest state in the nation. Between 1990 and 2000, the population of Florida grew by more than 23 percent, faster than most states, and this growth has continued into the present. Between 2000 and 2004, in fact, the population growth rate in Florida was twice that of the nation, and this growth is projected to extend for the foreseeable future. As a consequence, Florida is expected to become the nation s third largest state by 2010, surpassing New York. 1 Such rapid growth implies rapidly increasing demands not only for infrastructure such as schools, roads, and housing, but also for a wide assortment of human services, ranging from child care to nursing home care, and from education to health. This is particularly so in view of the fact that Florida has a 25 percent larger proportion of elderly residents than the nation as a whole. 2 What is more, although the state has been creating jobs more quickly than most states, it also faces some serious economic challenges. For example: Its median wage is below the U.S. figure and its median family income is 8 percent below the U.S. figure even though its cost of living is higher. Twenty-one percent of its residents live without health insurance compared to 16 percent for the nation at large. 1 See Enterprise Florida s Florida Demographic Overview, June 14, 2007, retrieved November 26, 2007 from and Florida s Office of Economic and Demographic Research s Florida Demographic Summary, retrieved November 26, 2007 from 2 See the U.S. Census Bureau s American Factfinder, accessed November 26, 2007 from 1

5 Only 40 percent of Florida s private sector workers are covered by an employer-sponsored retirement plan, well below the national average of 50 percent. Florida s unemployment compensation law is considered one of the more limited in the nation, covering only 29.4 percent of the state s private workers, well below the 40.2 percent national rate. 3 What is the nonprofit sector? These limitations of the social safety net available to Floridians translate into significant demands on the state s private nonprofit sector. But what exactly is the nonprofit sector? The answer to this simple question is unfortunately rather complex. For one reason, U.S. tax law actually delineates no fewer than twenty-seven separate sections under which organizations can claim exemption from federal income taxes as nonprofit organizations (see Figure 1.1). These categories include social welfare organizations, business leagues, and credit unions, to name just a few. Of these, our focus is on organizations that claim tax exemption under just one of these sections Section 501(c)(3), which is reserved for charitable, religious, educational, scientific, literary, and related organizations. Included here are private, not-for-profit hospitals, clinics, colleges, universities, elementary schools, social service agencies, child care centers, orchestras, museums, theaters, environmental organizations, homeless shelters, soup kitchens, and many more. Gaining a clear understanding of these organizations is further complicated, however, by the inadequacies of our statistical systems. At least four different sources of data are available on the nation s nonprofit 501(c)(3) organizations, and they offer different pictures of even the most basic parameters of Florida s nonprofit sector. For example: One of these sources, the Internal Revenue Service s Exempt Organization Master File, puts the number of 501(c)(3) organizations in Florida as of 2005 at 46,587. But this listing is rarely purged and may include many defunct organizations (see Figure 1.2). A more precise picture includes only the organizations that have actually filed the Form 990 that the IRS requires of all non-religious nonprofit organizations with at least $25,000 in expenditures and the Form 990-PF that the IRS requires of all private foundations. These listings record 17,814 Florida nonprofit 501(c)(3) organizations as of 2005, of which 4,128 are private foundations. Yet a third picture of the scope of the nonprofit universe in Florida is available from the employment data compiled by the Florida Agency for Workforce Innovation in cooperation with the federal Bureau of Labor Statistics (the socalled ES-202 data set). This body of data, which covers all nonprofits with at least 4 employees, identifies just 6,192 nonprofit 501(c)(3) organizations in Florida. Clearly, considerable care must consequently be taken in analyzing the scope of the Florida nonprofit sector, even when we restrict our attention to the 501(c)(3) charitable portion of this sector, as we do here. Generally speaking, the data are more reliable to depict the scale of the sector s resources its revenues, expenditures, and employment than the number of organizations. We therefore focus on these variables here. To do so, we draw on several different data sources data from the 990 forms, from the ES-202 employment records, from recent surveys of volunteering that covered Florida, and from Internal Revenue Service data on charitable giving. The result is a comprehensive picture of the scope, distribution, and recent trends in this important, but overlooked, component of Florida s economy and society. (For further detail on the data sources and methodology used, see Appendix A). In the balance of this report, we outline the major findings that emerge from this analysis, focusing first on the overall scale of the Florida nonprofit sector, and then examining the other five topics identified above. 3 The following points are based on data presented in Emily Eisenhauer and Bruce Nissen s The State of Working Florida 2007, Miami, FL: Research Institute on Social and Economic Policy, Center for Labor Research and Studies, Florida International University, Retrieved November 26, 2007 from 2

6 Figure 1.1: Types of tax-exempt organizations under U.S. law Tax Code Section Type of tax-exempt organization 501 (c) (1) Corporations organized under an act of Congress 501 (c) (2) Title-holding companies 501 (c) (3) Religious, charitable, educational, etc. 501 (c) (4) Social welfare 501 (c) (5) Labor, agriculture organization 501 (c) (6) Business leagues 501 (c) (7) Social and recreational clubs 501 (c) (8) Fraternal beneficiary societies 501 (c) (9) Voluntary employees beneficiary societies 501 (c) (10) Domestic fraternal beneficiary societies 501 (c) (11) Teachers retirement fund 501 (c) (12) Benevolent life insurance associations 501 (c) (13) Cemetery companies 501 (c) (14) Credit unions 501 (c) (15) Mutual insurance companies 501 (c) (16) Corporations to finance crop operation 501 (c) (17) Supplement unemployment benefit trusts 501 (c) (18) Employee-funded pension trusts 501 (c) (19) War veterans organizations 501 (c) (20) Legal services organizations 501 (c) (21) Black lung trusts 501 (c) (25) Holding companies for pensions 501 (d) Religious and apostolic organizations 501 (e) Cooperative hospital service organizations 501 (f) Cooperative service orgs of operating educational organization 521 Farmers cooperatives 527 Political organizations Source: Internal Revenue Service, 1995 Figure 1.2: Number of nonprofits in Florida, by source, 2005 EOMF: IRS 990/PF filers: ES-202: 46,587 organizations 17,814 organizations 6,192 organizations Source: National Center for Charitable Statistics, based on IRS Form 990 and 990-PF data. ES Covered Employment and Wages Program, U.S. Bureau of Labor Statistics. EOMF - Internal Revenue Service, Exempt Organization Master File. CHAPTER II: A MAJOR ECONOMIC PRESENCE Florida s private nonprofit 501(c)(3) sector is a major economic force in the state. Employment Florida s private, nonprofit organizations employed nearly 630,000 workers as of the second quarter of This includes 380,000 paid workers and an additional 250,000 full-time equivalent volunteer workers. This workforce makes Florida s nonprofit sector the fourth largest industry in the state in terms of employment 4 (see Figure 2.1). In fact, including paid workers and full-time equivalent volunteer workers, Florida nonprofits employ: - Twenty-one times more workers than the state s utilities industry; 5 - Six times more workers than the state s renowned agriculture industry; - More than three and a half times as many workers as the state s real estate and information industries; 6 - Close to twice as many workers as the state s wholesale and finance and insurance industries; and - About 10 percent more workers than the state s entire construction industry. The paid workforce of Florida nonprofits alone represents a significant 4.9 percent of the total Florida workforce (or 1 out of every 20 workers), more than the state s banking and insurance industry. Finances 7 In addition to being a sizeable employer, the Florida nonprofit sector has a sizeable financial footprint in the state. In particular, Florida nonprofits as of 2005: Generated $48.1 billion in revenues; 4 Industries refer to the eighteen industries identified in the North American Industrial Classification System (NAICS). 5 The utilities industry includes establishments that provide electric power, natural gas, steam supply, water supply, or sewage removal. 6 Information includes publishing industries, broadcasting and telecommunications, information and data processing services, and the motion picture and sound recording industries. 3

7 Figure 2.1: Employment in the Florida nonprofit sector in comparison to selected Florida industries, 2005 Retail 901 Administrative support 814 Accommodations & food 728 Nonprofit sector Health & social services* Construction Education* Professional & scientific services* Manufacturing Finance & insurance Wholesale Transport Other services* Real estate Information Arts & recreation Nonprofit employees Nonprofit volunteers Other employees Agriculture 101 Management of companies 63 Utilities 30 Mining 6 *Excludes nonprofits Number of employees (in thousands) Source: Johns Hopkins Nonprofit Economic Data Project based on ES-202 data Spent over $44.5 billion, including over $14.6 billion in wages and compensation; and Held nearly $76.2 billion in total assets. Moreover, through the $14.6 billion in wages and compensation that they paid, Florida s nonprofits generated at least $300 million of sales tax revenues for Florida governments. Florida Nonprofits in Context Though sizeable, however, Florida s nonprofit sector is proportionally smaller than its counterparts elsewhere in the nation. Thus: The nonprofit share of total employment in Florida, at 4.9 percent, is below the 7.2 percent U.S. average as well as the 6.0 percent Southeast average (see Figure 2.2). It is also below the averages in other major states, including New York (13.3 percent), Ohio (8.0 percent), and California (5.1 percent) (see Figure 2.2). Reflecting this, nonprofit expenditures per capita in Florida at $2,505 are nearly one-third less than in the nation as a whole and a quarter less than in the Southeast Region (see Figure 2.3). Similarly, nonprofit expenditures per $1,000 of gross state product in Florida at $73 are nearly a quarter less than in the nation as a whole ($93) and 16 percent below the Southeast Region average ($87) (see Figure 2.4). In short, Florida s nonprofit sector is an economic powerhouse, generating and expending billions of dollars and employing a significant proportion of Floridians. However, this sector remains relatively smaller in Florida than its counterparts across the country. 7 Data reported here include only operating nonprofits. For a discussion of the finances of Florida s private foundations, see Chapter 4. 4

8 Nonprofit employment as % of total Figure 2.2: Nonprofit share of total employment, Florida vs. the nation,* % 13.3% 12% 10% 8% 6% 4% 2% 0% Florida 4.9% 7.2% U.S. Southeast 6.0% New York 8.0% Ohio California 5.1% 4.1% Texas *Data from other states is from 2004, the latest year for which they are available Source: Johns Hopkins Nonprofit Economic Data Project based on ES-202 data Nonprofit expenditures per capita Figure 2.3: Nonprofit expenditures per capita, Florida vs. the nation, 2005 $8,000 $6,000 $4,000 $2,000 $2,505 $3,660 $3,307 $5,939 $4,322 $3,659 $2,067 $0 Florida U.S. Southeast New York Ohio California Texas Source: Johns Hopkins Nonprofit Economic Data Project based on 990 data Nonprofit expenditures per $1000 of GSP $140 $120 $100 $80 $60 $40 $20 $0 Figure 2.4: Nonprofit expenditures per $1000 of gross state product, Florida vs. the nation, 2005 Florida $73 $93 U.S. Southeast $87 New York $127 $117 Ohio California $87 Texas $52 CHAPTER III: A DIVERSE SECTOR Florida s nonprofit sector is not only large. It is also highly diverse by field, location, and size. Distribution of Organizations by Field Nonprofits in Florida are active in a wide range of fields, including the arts, education, health, social services, and civic life. Over a third (37 percent) of Florida nonprofits are civic organizations. The bulk of these are grantmaking and giving services groups, which comprise a significant 14 percent of all Florida nonprofits. Other organizations within this category include civic and social organizations (10 percent) and social advocacy groups (5 percent) (see Figure 3.1). Twenty percent of all Florida nonprofits are in the arts, culture, humanities, and recreation field. Eighteen percent of all Florida nonprofits are in the youth development, human services, and food and shelter field. Ten percent of the state s nonprofits are in the health field. This includes nursing homes (4 percent), hospitals (1.3 percent), and other health-oriented organizations (5 percent). Eight percent of all nonprofits are in the education field, including higher education and other education. Higher education organizations represent just 0.6 percent of nonprofits in the state. Source: Johns Hopkins Nonprofit Economic Data Project based on 990 data and the Bureau of Economic Analyses, Regional Economic Accounts 5

9 Distribution of Resources by Field While the largest proportion of Florida s nonprofits are civic groups, the largest proportion of the state s nonprofit resources are in the health field. Thus: Representing just 10 percent of all nonprofits in the state, health organizations accounted for an impressive 60 percent of the sector s expenditures and 61 percent of the sector s employment in 2005 (see Figure 3.1). Hospitals controlled the bulk of these resources representing just 1 percent of all nonprofits in the state, hospitals accounted for nearly half (47 percent) of the sector s expenditures and two-fifths of its employment. Conversely, though comprising 20 percent of all nonprofits in the state, arts, culture, humanities, and recreation organizations accounted for just 3 percent of the sector s expenditures, and 2 percent of its employment. As shown in Figure 3.2, the distribution of nonprofit expenditures in Florida diverges somewhat from the national pattern. More specifically, Florida hospitals; youth development, human services, and food and shelter organizations; and nursing homes account for a larger share of total nonprofit expenditures than their counterparts nationwide; and Florida other health, higher education, and grantmaking and giving services organizations account for a smaller share of total nonprofit expenditures than their counterparts nationwide. Figure 3.1: Distribution of Florida nonprofits by number of organizations, expenditures, and employment, 2005 Arts, culture, recreation Youth, human srvcs, food, shelter Grantmaking & giving Civic & social Other civic Other education Social advocacy Not elsewhere classified Other health Nursing homes Science & tech Hospitals Higher education 2% 3% 1% 5% 3% 1% 1% 1% 2% 4% 5% 4% 2% 5% 1% 1% 3% 1% 1% 8% 5% 4% 7% 10% 10% 7% 5% 14% 11% 6% 4% 7% 8% 20% 12% 10% 18% 40% 47% 0% 10% 20% 30% 40% 50% Percent of state nonprofit total Employment Expenditures Organizations Source: Johns Hopkins Nonprofit Economic Data Project based on 990 and ES-202 data Percent of total nonprofit expenditures 50% 40% 30% 20% 10% 0% 47% 43% Hospitals Youth, human srvcs, food, shelter Figure 3.2: Distribution of nonprofit expenditures by field, Florida vs. the nation, % 8% Nursing homes 6% 4% Other health 7% 9% 8% 10% Higher education Grantmaking and giving services 5% 7% 4% 3% 4% 3% 3% 3% 2% 3% 1% 2% 1% 1% 1% Other education Social advocacy organizations Arts, entertainment, recreation Not elsewhere classified Civic and social organizations Florida United States Home health Science and technology 3% Source: Johns Hopkins Nonprofit Economic Data Project based on 990 data 6

10 Geographic Distribution Florida s nonprofits are also geographically diverse. Twothirds of the state s nonprofit organizations and over threequarters of the state s nonprofit workers are located within three regions the Southeast Region, the Tampa Bay Region, and the East Central Region (see Appendix B for a description of these regions). Not surprisingly, the bulk of the state s population also resides in these areas. Thus: Over 29 percent of Florida s nonprofit employment is located in the state s Southeast Region, which contains Miami (see Figure 3.3). - Within this region, slightly more than half (52 percent) of all nonprofit employees are located in Miami-Dade County. Sizeable proportions of these employees are also located in Palm Beach (21 percent) and Broward Counties (19 percent). Nearly 25 percent of Florida s nonprofit employment is located in the Tampa Bay Region. - Within this region, the bulk of nonprofit employees are concentrated in Hillsborough and Pinellas Counties, each of which accounts for nearly a third of this region s nonprofit employment. The East Central Region, which includes Orlando, accounts for about 22 percent of the state s nonprofit employment. - Within this region, nearly half (48 percent) of all nonprofit employment is located in Orange County. Another third of this region s nonprofit employment is fairly evenly split between Brevard (17 percent) and Volusia (16 percent) Counties. While nonprofit employment is concentrated in these three regions, however, the density of nonprofit employment is actually higher in other regions. For example: In the North Central Region, nonprofits account for 7.9 percent of total employment, well above the state average of 4.9 percent (see Figure 3.4). Figure 3.3: Distribution of Florida nonprofit employment, by region, 2005 Source: Johns Hopkins Nonprofit Economic Data Project based on ES-202 data 7

11 Other regions in which nonprofits account for above average shares of total employment include the Northeast Region (6.1 percent), the East Central Region (5.7 percent), and the Tampa Bay Region (5.5 percent). Counties with especially sizeable nonprofit shares of total employment include Madison (10.4 percent), Alachua (9.8 percent), Escambia (8.3 percent), and Volusia (8.1 percent). Size Variation Florida nonprofits also vary widely by size. Most (80 percent) Florida nonprofits, or 4 out of every 5 organizations, are relatively small, with revenues less than $1 million. But these organizations account for only 4.3 percent of all Florida nonprofit expenditures (see Figure 3.5). By contrast, most (63 percent) Florida nonprofit expenditures are made by the one percent of Florida nonprofits with revenues in excess of $50 million. In short, Florida s nonprofit sector is made up of a considerable array of organizations of various sizes, operating in a wide range of fields and locations. Figure 3.4: Nonprofit employment as a percent of total employment, by region, 2005 Source: Johns Hopkins Nonprofit Economic Data Project based on ES-202 Data Figure 3.5: Distribution of Florida nonprofits and expenditures by size, 2005 Small (Rev. < $1 million) 4.3% 80% Medium (Rev. $1 m - $9.9m) Large (Rev. $10 m - $49.9m) 3% 15% 14.3% 18.3% Organizations Expenditures Very large (Rev. >$50m) 1% 62.9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Percent of Florida nonprofit total Source: Johns Hopkins Nonprofit Economic Data Project based on 990 data 8

12 CHAPTER IV: REVENUES AND GENEROSITY The revenue base of Florida s nonprofits, like that of the nation s, differs significantly from what is widely believed. Gaining a clear idea of the revenue base of Florida s nonprofits is complicated by quirks in the available data sources. These unfortunately merge government grants together with charitable gifts. In addition, they group government contracts and voucher payments such as Medicare and Medicaid together with nonprofit fees from sales of their services. This has the effect of overstating the share of nonprofit revenue that comes from both private charity and fees and understating the share that comes from government. Nevertheless, it is still possible to reach several conclusions about the revenue base of Florida nonprofits. Fees and Government the Dominant Sources Unquestionably, the major sources of Florida nonprofit revenue are government and fees for service. At least 75 percent of Florida s nonprofit revenue came from government and fees as of 2005, and this does not even include the government support that reaches nonprofits in the form of grants. This means that no more than one-fourth of total nonprofit income came from gifts and grants, and that charitable support was likely less than this since the 25 percent figure includes government grants (see Figure 4.1). 8 As Figure 4.1 shows, this average obscures some significant variations by field. Specifically: - Social advocacy organizations relied most heavily on grants and contributions, which accounted for 91 percent of their total income. - Other fields in which grants and contributions constituted well over half of nonprofit income included civic and social (65 percent); youth, human services, and food and shelter (60 percent); and grantmaking and giving services (60 percent). - By contrast, nonprofit hospitals and nursing homes received the lion s share of their income from government and fees and less than 10 percent from grants and contributions. Figure 4.1: Proportion of Florida nonprofit income from government grants and charitable contributions by field, 2005 U.S. Florida Social advocacy Civic and social Youth, human srvcs., food, shelter Grantmaking and giving Science and technology Not elsewhere classified Arts, culture, humanities and rec. 21.7% 25.3% 38% 41% 51% 65% 60% 60% 91% Other education Other health Higher education 22% 32% 36% Nursing homes Hospitals 8% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of nonprofit revenue Source: Johns Hopkins Nonprofit Economic Data Project based on IRS data 8 Grants and contributions include grants from foundations and government, as well as private contributions, which are all grouped together on the IRS Form 990 data available for analysis. 9

13 Relative Generosity As Figure 4.1 also shows, Florida nonprofits received a higher proportion of their income from grants and contributions in 2005 than did nonprofits on average nationally (25.3 vs percent). It would be wrong to read into this figure a finding that Floridians are more generous than their counterparts elsewhere, however. The grants and contributions share may appear higher simply because other sources particularly government contracts and voucher payments are lower in Florida than elsewhere. This conclusion certainly finds support in other data that report more directly on the degree of generosity of Floridians. Such data are available from the Internal Revenue Service for taxpayers who itemize their deductions. These data suggest that Florida lags the nation in relative generosity. In particular, as reflected in Figure 4.2: For each $1,000 of adjusted gross income, 9 Floridians contributed an average of $23.55 to nonprofit organizations in This puts Florida five percent below the U.S. average ($23.55 vs. $24.66, respectively). In addition, this puts Florida 7 percent behind California and 20 percent behind New York. Volunteering Rate In addition to lagging the nation in its rate of charitable giving, Florida also lags the nation in its rate of volunteering. Contributions per $1000 of AGI* Figure 4.2: Average charitable contributions per $1000 of income, Florida vs. the nation, 2005 $30.00 $20.00 $10.00 $23.55 $24.66 $28.99 $25.19 $23.47 $20.73 $0.00 Florida U.S. New York California Texas Ohio *Adjusted Gross Income Source: Johns Hopkins Nonprofit Economic Data Project based on IRS data Percent of population volunteering Figure 4.3: Volunteering rate in Florida vs. the nation, % 30.2% 30% 26.7% 26.6% 25% 23.7% 23.5% 20% 18.6% 18.4% 15% 10% 5% 0% Florida U.S. Southeast Ohio Texas California New York Source: Current Population Surveys September 2006 supplement 9 Adjusted gross income (AGI) represents a person s gross income adjusted by certain IRS-allowed deductions (e.g., mortgage interest deduction, home property tax deduction, charitable deduction). AGI is used by the IRS to calculate an individual s income tax liability. 10

14 To be sure, 2.7 million Floridians, or 18.6 percent of the adult population, volunteered in 2006 alone. While sizeable, it falls 30 percent below the U.S. rate and more than 20 percent below the rate in the Southeast. It also falls well below the rates in Ohio, Texas, and California (see Figure 4.3). Florida s volunteer workers are disproportionately white, female, and non-hispanic. Volunteer workers also tend to be college educated and married (see Figure 4.4). As illustrated in Figure 4.5, these volunteer workers engaged in a wide range of activities, including fundraising (26 percent); collecting, preparing, distributing, or serving food (23 percent); tutoring/teaching (20 percent); and mentoring (19 percent). Florida s volunteer workers also worked at a diverse range of organizations (see Figure 4.6). Figure 4.4: Distribution of Florida volunteers by major demographics, % 90% 84% 89% Percent of population volunteering 80% 70% 60% 50% 40% 30% 20% 10% 0% 13% 3% White Black Other 11% Hispanic Non-hispanic 42% 58% Male Female 31% 28% 41% High school or less Some college Bachelor's degree or higher Source: Current Population Surveys September 2006 supplement 56% 1% Married-spouse present Married-spouse absent Widowed 7% 12% 2% 22% Divorced Separated Never married Percent of population volunteering 30% 25% 20% 15% 10% 5% 0% 26.3% Fundraise or sell items to raise money Figure 4.5: Volunteering in Florida, by activities, % Collect, prepare, distribute, or serve food 20.2% 20.1% 19.0% 16.9% Tutor or teach Engage in general labor; supply transportation for people Mentor youth Provide professional or management assistance Be an usher,, greeter,, or minister 16.0% 15.9% 14.4% 13.3% 11.9% Provide general office services Collect, make or distribute clothing, crafts, or goods other than food Other Engage in music, performance, or other artistic activities Coach, referee, or supervise sports teams 7.9% 7.5% Provide counseling, medical care, fire/ems, or protective services Source: Current Population Surveys September 2006 supplement 11

15 Figure 4.6: Volunteering in Florida, by organization, 2006 Percentage of population volunteering 40% 35% 30% 25% 20% 15% 10% 5% 37.6% 21.5% 10.3% 5.5% 5.0% 4.6% 4.4% 4.1% 2.4% 2.2% 1.6% 1.6% 1.1% 1.0% 0.6% 0% Religious organizations Children's groups Health research or educational org. Social and community service group Civic organization Hospital, clinic, or healthcare org. Other educational group Some other type of organization Cultural or arts organization Youth services group Public safety organization International organization Environmental or animal care org. Sports or hobby group Political party or advocacy group Source: Current Population Surveys September 2006 supplement - Over 1 million Florida volunteer workers, or 38 percent of the state s total, assisted religious organizations in Significant proportions of volunteer workers also supported children s groups (22 percent) and social service agencies (10 percent). Foundations In addition to individual giving, Florida boasts a sizeable foundation sector. In 2005, there were 4,128 such private foundations in Florida, which generated over $2.2 billion in revenues and held over $15.1 billion in total assets (see Table 4.7). These groups also expended over $1.3 billion, which includes over $1 billion in contributions, gifts, and grants, and over $295 million in operating and other expenditures. The largest foundations in the state include the John S. and James L. Knight Foundation, Arthur S. DeMoss Foundation, The Picower Foundation, Publix Super Markets Charities, and Flight Attendant Medical Research Institute, Inc. (see Table 4.8). Like other parts of Florida s nonprofit sector, the private foundation field in Florida has experienced tremendous growth over the past thirteen years. In particular, between 1992 and 2005: The number of private foundations in Florida actually doubled a growth rate of 100 percent. This growth rate was well above the growth rate across the U.S. (67 percent), as well as above the growth rate in other major states including New York (44 percent), Ohio (56 percent), Texas (80 percent), and California (90 percent) (see Table 4.9). Table 4.7: Private foundations in Florida, 2005 and 1992 Contributions, Total Gifts, and Operating and Total Year Number Revenue Grants Paid Other Expenses Assets ,128 2,235,337,696 1,043,394, ,167,167 15,140,790, , ,073, ,727, ,568,981 3,920,133,688 Source: NCCS Core File (Private Foundations, circa 1992 and circa 2005) 12

16 Table 4.8: Top 5 Florida foundations by total giving, 2005 Name Total Giving John S. and James L. Knight Foundation $92,577,162 Arthur S. DeMoss Foundation $28,808,853 The Picower Foundation $27,662,893 Publix Super Markets Charities $25,367,240 Flight Attendant Medical Research Institute, Inc. $21,339,401 Source: The Foundation Center, 2007 Table 4.9: Growth in number of foundations, giving, and net assets, Florida vs. the nation, (inflation adjusted) % change from 1992 to 2005 in: Number of Organizations Giving Net Assets Florida 100% 113% 166% U.S. 67% 40% 107% California 90% 166% 143% New York 44% 65% 71% Ohio 56% 57% 114% Texas 80% 80% 81% Source: NCCS Core File (Private Foundations, circa 1992 and circa 2005) Florida private foundation total giving, which includes contributions, gifts, and grants, increased by 113 percent. This rate was four times above the U.S. average of just 40 percent, and well above the growth in foundation giving in all the comparison states except California. Moreover, net assets held by Florida private foundations grew by 166 percent. This rate was 55 percent above the U.S. average, and well above the growth rate in other major states including New York (71 percent), Texas (81 percent), Ohio (114 percent), and California (143 percent). Despite this growth, Florida foundation assets are proportionally 40 percent below the U.S. average ($22.71 per $1,000 of gross state product in Florida vs. $37.07 for the nation as a whole). CHAPTER V: A GROWING SECTOR The Florida nonprofit sector is not only a significant component of the Florida economy, but has also been growing, and at a rate that exceeds its counterparts elsewhere in the nation. This is true, moreover, both with respect to expenditures and with respect to employment. Overall Growth in Expenditures Florida nonprofit expenditures grew by 97 percent after adjusting for inflation between 1992 and By contrast, U.S. nonprofit expenditures grew by a smaller 70 percent after adjusting for inflation during this same period, and the U.S. gross domestic product (GDP) grew by only 54 percent. The growth of nonprofit expenditures in Florida also exceeded that for the Southeast generally and for other large states except for California (see Figure 5.1). While Florida nonprofit expenditures grew by 97 percent during this entire period, the growth rate was especially high in the early part of this period and tapered off during the latter part as the sector acquired a significant scale. At each stage, however, the growth rate of Florida nonprofit expenditures exceeded the growth rate of overall U.S. nonprofit expenditures as well as the growth rate of the U.S. GDP. In addition, at least during the early periods, and , the growth rate of Florida nonprofit expenditures exceeded the growth rate of the state s overall economy, often by a substantial margin (see Figure 5.2). 13

17 Figure 5.1: Growth of nonprofit expenditures, Florida vs. the nation, Florida 97% U.S. 70% U.S. GDP 54% California 190% Texas 84% Southeast 82% Ohio 70% New York 13% 0% 25% 50% 75% 100% 125% 150% 175% 200% Percent change in expenditures, (adjusted for inflation) Source: Johns Hopkins Nonprofit Economic Data Project based on 990 data Figure 5.2: Annual average change, Florida and U.S. nonprofit expenditures and Florida and U.S. GDP, , by period Annual average % change 8% 7% 6% 5% 4% 3% 2% 1% 0% 7.2% 6.8% 5.6% 4.0% 4.4% 3.5% 3.7% 4.1% 3.7% 2.9% 1.9% % Florida nonprofits U.S. nonprofits Florida gross state product U.S. GDP Source: Johns Hopkins Nonprofit Economic Data Project based on 990 data Variations in Expenditure Growth Rates by Field Considerable variations are apparent from field to field in the growth rate of Florida nonprofit expenditures. In particular, as shown in Figure 5.3: Growth was especially rapid among social advocacy organizations, which boosted their expenditures 1,827 percent between 1992 and Other types of Florida nonprofit organizations reporting well-above-average growth in expenditures between 1992 and 2005 included civic and social (233 percent); grantmaking and giving services (196 percent); youth development, human services, and food and shelter (176 percent); other education (167 percent); arts, culture, humanities, and recreation (160 percent); and other health (155 percent). In all but one of these fields (grantmaking and giving services), moreover, the growth of Florida nonprofits exceeded the growth rate of U.S. nonprofits generally. By contrast, Florida nonprofit organizations in some fields recorded below-average growth in expenditures. Included here were science and technology (21 percent), higher education (60 percent), and hospitals (63 percent). Except for the science and technology field, however, even here the growth rates for Florida nonprofits exceeded those for nonprofits elsewhere in the country. 14

18 Overall Employment Growth Accompanying the growth in expenditures of Florida nonprofit organizations was a substantial growth in employment. As shown in Figure 5.4: Between 2002 and 2005, nonprofit employment in Florida grew by 7.0 percent, adding over 24,700 jobs to the state s total. The growth rate of nonprofit employment exceeded that of the state s public sector by more than 2 to 1 (7 percent vs. 3 percent), though it lagged slightly behind the growth rate of the for-profit sector (7.0 percent vs. 8.6 percent). Variations in Employment Growth by Region Considerable variations were apparent in the growth of nonprofit employment among regions. In particular, as shown in Figure 5.5: Figure 5.3: Growth in nonprofit expenditures, by field, Florida vs. the U.S. All Social advocacy Civic and social Grantmaking and giving Youth, human srvcs, food, shelter Other education Arts, culture, recreation Other health Nursing homes Hospitals Higher education Not classified elsewhere 10% 0% Science and technology 21% 97% 70% 114% 79% 63% 58% 60% 38% 107% 109% 167% 117% 160% 119% 155% 121% 134% 196% 176% 233% 264% 313% 0% 50% 100% 150% 200% 250% 300% 350% Percent change in expenditures (inflation adjusted) 1827% Florida U.S. Source: Johns Hopkins Nonprofit Economic Data Project based on 990 data Nonprofit job growth was particularly robust in the Tampa Bay Region, where it increased by 9.1 percent far outpacing the 6.3 percent growth of for-profit jobs. Nonprofit job growth also exceeded for-profit job growth in the South Central Region, and it exceeded the state average, though not the growth rate of for-profit jobs, in the East Central Region (+8.8 percent) and the North Central Region (+7.7 percent). In contrast, the nonprofit sector experienced a 0.1 percent decline in jobs in the Southwest Region and had belowaverage gains in the Northeast Region (+5.5 percent), the Northwest Region (+5.8 percent), and the Southeast Region (+6.8 percent). Variations in Employment Growth by Field Although overall nonprofit employment grew by 7.0 percent between 2002 and 2005, in certain fields it clearly did better than in others. In particular, as shown in Figure 5.6: Nonprofit religious, grantmaking, and civic associations 10 experienced the most impressive employment growth, adding over 11,200 employees between 2002 and 2005, a growth rate of 68 percent. Percent change in employment 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Figure 5.4: Percent change in employment by sector in Florida, % 8.6% 3.0% Nonprofit For-profit Public Source: Johns Hopkins Nonprofit Economic Data Project based on ES-202 data 10 Religious, grantmaking, and civic associations refer to the North American Industrial Classification System (NAICS) Industry 813. While most of the report focuses on key subsets of this category (i.e., civic and social organizations, social advocacy organizations, and grantmaking and giving services groups), because comparable data on these subsets is not available for 2002, comparisons between 2002 and 2005 focus on this larger category. 15