Nonprofit Institutions Industry Profile

The US nonprofit institutions industry includes about 60,000 organizations with combined annual revenue of about $100 billion. Major organizations include the American Cancer Society, Goodwill Industries, and the Bill & Melinda Gates Foundation. The industry is highly fragmented: the largest 50 organizations account for about 20 percent of industry revenue.

Included in the industry are grantmaking foundations, charitable trusts, and other organizations that raise funds for social welfare activities; advocacy organizations that promote a particular cause or benefit a specific constituency; and groups that promote the civic or social interests of their members. Typical examples include educational and philanthropic trusts, health research fundraising groups, civil liberties and human rights organizations, wildlife conservation and environmental establishments, alumni associations, fraternal organizations, and scouting groups.

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. More than 1.5 million organizations qualify for tax-exempt status. Some organizations that operate as nonprofit entities, such as colleges and universities, hospitals, and religious organizations, are covered in separate industry profiles.

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 ...