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The Nonprofit Sector in South Dakota – What’s New?

The Nonprofit Sector in South Dakota – What’s New?. South Dakota Community Foundation July, 2009. Topics We Will Cover. Statistics on Nonprofits and Philanthropy Trends: Governance Accountability Public Perception Regulation. The Statistics are Difficult to Substantiate.

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The Nonprofit Sector in South Dakota – What’s New?

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  1. The Nonprofit Sector in South Dakota – What’s New? South Dakota Community Foundation July, 2009

  2. Topics We Will Cover • Statistics on Nonprofits and Philanthropy • Trends: • Governance • Accountability • Public Perception • Regulation

  3. The Statistics are Difficult to Substantiate • Nonprofit sector very diverse, with few large players • Government does not allocate resources to data collection on nonprofits on par with other economic sectors • Employment data is kept by states; some states limit how data can be used • New reliance on NAICS system is a problem – no distinct category for nonprofits The Nonprofit Almanac 2008, Urban Institute

  4. Numbers Change, but Proportions Don’t • Gifts & bequests – 87% in 1970, 83% in 2000 • Giving as percentage of GDP constant at about 2% over past 30 years • Individual giving as percentage of annual income constant at about 2% over past 30 years • Corporate giving as percentage of revenue constant at 1.2% Nonprofit Nation, Michael O’Neill

  5. Nonprofits in the US Total 501(c) organizations - 1,855,067 Total 501(c)3 organizations - 1,186,915 Total 501(c)6 organizations - 89,409 Nonprofits comprise about 8.5% of GDP Nonprofits comprise about 11% of employment

  6. Nonprofit Market is Vast • 75% of US nonprofits have revenue under $1 million • Largest nonprofits’ revenues only 1.5% of annual giving • Only ¼ of 501(c)3s file a Form 990/990-EZ

  7. Nonprofits in South Dakota 7,746 Organizations $7.2 Billion in Income* $13.09 Billion in Assets *2007 SD State GDP=$35.7 Billion

  8. Nonprofits in Pennington County • 814 nonprofits • $960 million revenue • $1.31 billion assets www.taxexemptworld.com

  9. 2007 charitable giving Total = $306.39 billion ($ in billions) Corporations$15.695.1% Foundations$38.52 12.6% Individuals$229.03 74.8% Bequests$23.15 7.6% Source: 2008 Giving USA

  10. Types of recipients of contributions, 2007 Total = $306.39 billion ($ in billions) Environmentand animals$6.962.3% Internationalaffairs$13.224.3% Arts, culture, and humanities$13.674.5% Foundations$27.73 9.1% Unallocatedgiving $23.677.7% Public-society benefit$22.657.4% Health $23.157.6% Religion $102.32 33.4% Humanservices $29.64 9.7% Education$43.32 14.1% Source: 2008 Giving USA

  11. Nonprofits in the News(usually for the wrong reasons!) • United Way of America – William Aramony • September 11 charity • American Red Cross – 9/11, etc. • “Pennies for Charity” and state AGs • Katrina • Nonprofit hospitals • University endowments • Local “Scandal du jour”

  12. Regulatory Trends and Influences • IRS Intermediate Sanctions • Sarbanes-Oxley (SOX) • Senate Finance Committee • House Joint Tax Committee (hospitals) • Panel on the Nonprofit Sector • IRS Governance Best Practices (now included in 2008 Form 990 questions) • IRS Inquiry Letters (hospitals & universities)

  13. Conclusions • Nonprofit sector is big and influential • Nonprofit sector is very splintered • Perception of eroding confidence in charity • Trends toward more public scrutiny • IRS changing role – reluctantly - from pure financial regulation to broader governance oversight

  14. Thank You! 818 S. Hawthorne Avenue Sioux Falls, South Dakota 57104-4537 (605) 336-0244 or (888) 4-SUMPTION www.sumptionandwyland.com

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