Nonprofit Institutions Industry Profile

The US nonprofit institutions industry includes more than 1.4 million organizations with combined annual revenue of more than $1 trillion. Major organizations include Goodwill Industries, Ascension Health, American Cancer Society, New York University, and the Bill & Melinda Gates Foundation. The industry is highly concentrated: nonprofits that make more than $100 million account for less than 1 percent of all firms but earn more than 60 percent of industry revenue.

Although technically distinct, the terms "nonprofit," "tax-exempt," and "charitable" are often used interchangeably. Nonprofits are sometimes referred to as "501(c)" entities, after the section of the Internal Revenue Code that defines their tax status.

COMPETITIVE LANDSCAPE

Demand is driven by the need to represent special interests or provide social services that can't be met by the market or government. Organizations receive nonprofit status because their primary purpose is religious, charitable, scientific, literary, or educational in nature. Their purpose must be to serve the public good versus a private interest.

The success of nonprofits often depends on efficient operations and their ability to match expenses with fluctuating revenues. Large nonprofits have advantages in fundraising due to strong name recognition. Small nonprofits can be successful if they serve a dedicated membership or have a dependable source of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Nonprofits are classified into 10 service categories, including arts, culture, and humanities; education; environment and animals; health; human services; international, foreign affairs; mutual, membership benefit; public, societal ...