The growth of the nonprofit sector
Stephanie Strom has an interesting story in The New York Times about the seemingly unregulated growth of nonprofits in the United States over the past 10 years. During that time, the number of nonprofits has grown by 60 percent, to some 1.1 million, costing the federal government some $50 billion in tax revenue, Strom reports.
The group that approves applications for 501(c)3 status seems to have fairly low standards, giving thumbs up to 99 percent of all applications last year, according to a new report by the Standford University Center on Philanthropy and Civil Society.
Check out the report, called “Anything Goes,” which includes a list of the 60 most frivolous charities formed last year.
Among them? Sin for Charity, the Colorado Beer Festival, Planet Jelly Donut, and the Mississippi Magnolia Cloggers.
It seems that no Jewish groups appear on the list.
But there has been tremendous growth in the Jewish nonprofit world during the past decade -- Jewish Jumpstart surveyed more than 300 organizations that were founded after 1998 and have budgets of less than $2 million. (Though note in the comments section below that Jumpstart's CEO, Shawn Landres estimates that there are roughly 200 Jewish 501(C)3 startups. The rest are not required to file 990 tax forms, because they are subsidiaries of larger nonprofits, worship groups not registered with the IRS, or other.)
As much as $500 million has already been invested in these programs and up to $100 million is being spent annually to support them, many of which are considered the heart of Jewish innovation.
As dollars tighten, it’s tantamount that we look at what is necessary.
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Jacob,
This doesn’t change most of the basic point, but if I remember right, the growth figure and the total # isn’t really valid because there’s no regular scouring of the rolls to get rid of nonprofits that close/fold/merge/weren’t real in the first place. So a lot of stuff just accumulates on the registry and shows up in these counts even though it’s completely inactive and has been for years.
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J. Shawn Landres
12/08/09 06:09 PM
Jacob, you raise an important point; not only do we need to be focused on what is necessary, but we also need to ensure that we’re managing necessary resources as effectively as possible. Much of the Innovation Ecosystem report (available at http://jewishecoystem.org) focuses on innovators’ desire to share resources and streamline processes. The Community Partners/Jumpstart Project Partnership (http://projectpartnership.org) and J Space (http://jspace-la.org) are two of a number of responses to that need. Makom Hadash in New York, JHub in London, and the PresenTense Hub in Jerusalem also are working to share resources and benefit from creative synergies.
One important correction and an equally important clarification on your story, though:
The correction: It’s not 230 organizations. Based on the 2008 Survey of New Jewish Organizations, we estimated that there were 300-325 such startups (not 230); the $500 million overall investment and $100-110 million 2008 investment figures apply to that larger estimate. We also estimated that these organizations were reaching 360,000-400,000 people, of whom 100,000-150,000 may have no other connection to the organized Jewish community. If we take Mark Pearlman’s $10 billion estimate of the “Jewish GDP” and assume an American Jewish population of 6 million, we find that these startups are reaching ~7% of the population with only ~1% of the money. So that’s pretty effective already.
The clarification: Stephanie Strom’s story, which focuses on independent tax-exempt 501(c)(3) organizations. That category of nonprofit accounts for only 56% of the startups in our sample (45% required to file a 990 tax return and another 11% not required to file a 990). The remaining 44% in the sample are independent religious groups, unincorporated associations, independent corporations with fiscal agents, and autonomous managed projects/programs attached to a larger entity. So if you want to compare apples to apples, we’d say there are about 185-200 startups of the specific type that Strom was describing.
Obviously this was the first time ever that anyone had run a survey like ours, and we’re planning to initiate the 2010 Survey of New Jewish Organizations beginning early next year. That will give us new data with which to compare the 2008 material, and should help us get more clarity on what’s happening in the field.