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Nonprofit Organizations

Nonprofits have historically been defined by what they are not (profit-making) or by what they give away. These terms can conjure up images of soup kitchens run out of church basements, people collecting signatures on street corners, and organizations of “do-gooders” striving to compensate for a lack of funds by working long hours and relying on volunteers. Yet this image of the nonprofit sector is far from complete. In the United States, today’s nonprofits make up a vibrant, innovative, multi-trillion dollar sector that is continually evolving and adapting to society’s needs and constraints.

The list of nonprofits in the United States and in your community will probably surprise you: private universities like Harvard or public ones like Texas A&M; multi-billion dollar area hospitals; international relief organizations like Doctors Without Borders; religious organizations ranging from local congregations to national groups like Focus on the Family or the American Friends Service Committee; organizations spanning the length of the left-right, liberal-conservative political spectrum; and membership organizations like the American Bar Association, the American Civil Liberties Union, and the National Rifle Association. Additionally, the traditionally clear lines delineating nonprofit, for-profit, and government sectors are dissolving into porous borders where corporations are stepping up to be responsible social stewards, government agencies are contracting out much of their work to nonprofits, and nonprofits are becoming more lean and efficient in the face of limited funding and, yes, competition. Given these shifting borders of responsibility and focus, nonprofits are actively looking for entrepreneurial, innovative, and visionary people with the skills to take on a variety of roles.

Recent graduates who are interested in finding “work with meaning” and a way to give back to society while also earning a paycheck can find a plethora of opportunities in the nonprofit sector.

Nonprofits are no longer a place where you work for a few years after college or in transition between “real jobs.” Today, nonprofits are a place where you can lead a challenging and fulfilling lifelong career. As you explore nonprofit opportunities, set aside your notions of “what a nonprofit is” and prepare to discover a sector that will, I think, surprise you.

Advantages and disadvantages of working in nonprofits

There is no question that nonprofits tend to attract people with certain shared values. A typical profile of nonprofit professionals would include their desire to wed their passion for the issues that inspire them with their paid work; a focus on the bottom line of positive social change; and a real interest in making a tangible difference in the communities they serve. Yet, while many of these advantages do exist, one must be careful not to overlook the challenges of nonprofit work.

The advantages

There are many reasons why nonprofit work is appealing. Some of the generalizations of nonprofits—laid back, friendly, mission-driven—are based in a reality that appeals to various types of personalities. Some advantages of nonprofit work can include:

• The ability to do meaningful work that focuses less on results benefiting the employer and more on creating positive change in the community at large. A nonprofit career also allows you do to the kind of work that you might otherwise only be able to do on your own (unpaid) time.

• More “hands-on” opportunities that allow you to directly experience the positive outcomes of your work.

• A more casual work environment. This can include a more relaxed dress code, flexible schedules, and an open physical work environment.

• The opportunity to “wear several hats.” Since many nonprofits are understaffed, nonprofit professionals have the chance to perform many different job functions and move outside of a strict set of job responsibilities.

• Greater levels of responsibility. Professionals in nonprofits are often allowed or required to take on more responsibilities than professionals in other sectors where there may be more resources to hire additional staff. Examples include: managing staff and volunteers, working on projects outside of their expertise, and collaborating with outside individuals and organizations in a meaningful capacity.

• The potential for rapid job advancement. While advancement may be limited within a specific organization, it is often possible to move between organizations while also advancing up the responsibility ladder.

• A greater organizational culture of like-minded people, inspiring teamwork and collaboration instead of internal competition. Often, nonprofit professionals are strongly invested in their work and this dedication can be contagious.

 • More generous benefits. Nonprofits often offer lower wages than other sectors. However, many organizations make up for this possible salary gap by offering excellent health benefits for the employee and their family, retirement plans, more vacation time, and other “perks” that can help balance out a smaller paycheck.

• Nonprofits can sometimes act more quickly than government or for-profit organizations to fill a niche, meet a need, or be entrepreneurial.

The disadvantages

 A job at a nonprofit does not necessarily mean that you have found your workplace nirvana. It takes a particular set of skills and priorities to find success and happiness in the nonprofit sector.

• Lower wages. Nonprofits usually pay less than comparable for-profit and public positions. Usually, Mid- to upper-level nonprofit managers, especially in large organizations, often have similar salary ranges to comparable positions in other sectors. However, people fresh out of college can often adjust to this pay disparity more readily than professionals with some level of paid experience.

• Burnout is a common reality in the nonprofit world. Part of the personal and professional investment in a nonprofit’s cause means often blurring the line that should divide your work and home life balance. Nonprofit work is commonly more than a 40-hour-a-week commitment, and this can mean anything from working long hours to attending evening and weekend obligations (fundraisers, community events, etc.).

• Turnover can be high in nonprofit organizations for a variety of reasons. People move on to better paying jobs or higher level positions in other organizations, make the decision to go back to school, or decide to switch sectors.

• Nonprofits can have different (or fewer) structures than other sectors. Professionals who need hierarchies with clear benchmarks, deliverables, and tasks may find nonprofit work frustrating.

• Social change is slow and unpredictable. The length of the struggle can frustrate organizations that address social change issues. Consider how long it took for women to be allowed to vote in the United States. The unpredictability of government policy (which can change whenever new lawmakers take office); shifting priorities in social, economic, and cultural movements; and natural disasters and other crises can derail years of work invested by nonprofits.

• Nonprofits, true to their name, are often lacking in resources. Many nonprofits are chronically underfunded and rely largely on volunteers who, while critical to the success of the sector, may or may not be as available or reliable as paid staff. This can mean that already overworked staff members must pick up the slack.

• Many nonprofits suffer from what is called “Founders’ Syndrome”, the propensity of an organization’s founders (be it one person or a group) to have a deep sense of ownership over and responsibility for the organization. Those who have been there from the start are often reluctant to leave or to change how things have always been done.

• There is still an all-too-common misconception of nonprofits as a place for unfocused do-gooders to get together and complain about the status quo before they have to go out and “get a real job”. Ironically, the nonprofit sector, despite being the backbone of much of the social change that has taken place throughout U.S. history, is still emerging as a credible sector. Thus, as a professional interested in nonprofit work, you will often face questions from family and friends—your support network—who may not understand why you are involved in nonprofit work, why you would “waste your talent”, or why you would choose nonprofit work over a more financially rewarding career

Overall Facts - Nonprofit organizations:

1. Are mission driven. Money is raised through fundraising activities, fees for goods and services, contracts with government agencies, and grants from foundations. This money is spent on services and activities to accomplish the organization’s mission.

2. Serve the public, whether this means members or the broader public. The extent to which the public is served creates the “bottom line” for these organizations.

3. Value volunteerism and altruism. These are considered to be core values. Governing boards and citizen advisory boards are run by volunteers, and many of the services are delivered by volunteers.

4. Are governed by a board of directors. This group ensures that the organization carries out its mission, and they hire and fire the executive director. They are usually influential in their community and play a big role in fundraising.

5. Are flexible and autonomous, although they do collaborate with other nonprofits, government, and for-profit organizations. They monitor issues relevant to their mission and respond quickly to developments and current events.

More than 1.5 million nonprofit organizations are registered in the U.S., raising over $400 billion in donations. Most nonprofits are small, with expenses of $500,000 or less.

 

America’s Largest Nonprofits

This elite group together received $49 billion in gifts, a whopping 12% of the $410 billion taken in by the country’s 1 million-plus nonprofits.

Listed below are the top 20 - evaluated on several financial efficiency metrics.

Rank	Name	Category	Private Donations	Total Revenue	Fundraising Efficiency %	Charitable Commitment %
1	United Way Worldwide	Domestic Needs	$3.3 B	$3.7 B	90%	85%
2	Feeding America	Domestic Needs	$2.8 B	$2.8 B	99%	99%
3	Task Force for Global Health	International Needs	$2.6 B	$2.6 B	100%	100%
4	Salvation Army	Domestic Needs	$2 B	$3.9 B	87%	82%
5	St. Jude Children's Research Hospital	Medical	$1.7 B	$2.3 B	85%	70%
6	American National Red Cross	Domestic Needs	$1.5 B	$3.6 B	87%	90%
7	Direct Relief	International Needs	$1.4 B	$1.4 B	100%	99%
8	Habitat for Humanity International	International Needs	$1.4 B	$2.2 B	90%	84%
9	YMCA of the USA	Youth	$1.1 B	$7.7 B	85%	85%
10	Americares Foundation	International Needs	$1 B	$1 B	99%	99%
11	Boys & Girls Clubs of America	Youth	$1 B	$2.2 B	87%	80%
12	Compassion International	International Needs	$948 M	$959 M	90%	82%
13	Food for the Poor	International Needs	$929 M	$943 M	95%	94%
14	Goodwill Industries International	Domestic Needs	$878 M	$6.1 B	98%	89%
15	Nature Conservancy	Environment/Animal	$831 M	$1.2 B	85%	68%
16	Lutheran Services in America	Domestic Needs	$810 M	$22.6 B	90%	85%
17	American Cancer Society	Health	$728 M	$724 M	81%	78%
18	Catholic Medical Mission Board	International Needs	$727 M	$742 M	99%	98%
19	World Vision	International Needs	$719 M	$1.1 B	88%	86%
20	Step Up for Students	Education	$715 M	$718 M	100%	100%

 

Nonprofit Subsectors

Here are seven broad categories

 

Arts, Culture, and Humanities * museums (art, children’s, history, science, zoos) * venues including opera houses, concert halls, theatres * performance groups, such as dance, ballet, theatre, music, symphony, orchestras, opera, music groups, and bands * councils, conservatories, and historical societies * distribution channels such as public radio and television, recording companies, and artist management firms

Education

The nonprofit education sector includes colleges and universities, preschool, elementary, secondary schools, libraries, and research institutions.  The nonprofit education and research sector accounts for annual revenues of $175 billion. 

Education * early childhood, elementary, and secondary schools, including child care, research, government-funded public schools, nonprofit private schools, and charter schools * higher education including community colleges, four-year colleges and universities, graduate schools, professional programs, and executive training * supplemental programs, workforce development programs, career centers, community-based organizations, and agencies formed by government funding * educational materials, textbooks, curricula software, games, and toys * groups and libraries including sororities and fraternities, alumni associations, and parent-teacher groups

Health Services

Health care is the largest sub-sector within the nonprofit industry in terms of economic value and employment. Nonprofit health care comprises up to half of all nonprofit revenue and employment, and it has the largest share of wages and salaries in the nonprofit industry.  Nonprofit general hospitals generate three times more revenue and jobs than government hospitals, and seven times more than their for-profit counterparts, according to the U.S. Census Bureau.

* hospitals, especially acute care and rehabilitation facilities * mental health services, including outpatient clinics and multiple service organizations * residential treatment, such as care for emotionally disturbed children, hospice, and home health * centers and clinics, including community health, dialysis, organ, and tissue banks, blood supply, family planning and reproduction, and groups addressing addiction * health insurance and HMOs (health maintenance organizations) * research and organizations devoted to diseases and disciplines, including birth defects, cancer, bioengineering, geriatrics, neurology, and pediatrics

Social and Legal Services

The nonprofit social and legal services sector includes legal pro bono aid counsels, individual and family services, residential care, job training, and community and housing development. It is one of the fastest growing sectors in the nonprofit industry.

Public or Societal Benefit (advocacy organizations)

* civil rights and social action, including efforts on behalf of the rights of minorities, people with disabilities, women, seniors, and LGBTQ * civic engagement, including voter education, registration, and political campaigns * advocacy, including reproductive rights, anti-abortion initiatives, freedom of speech and freedom of the press issues, and euthanasia * community improvement and capacity building, including neighborhood development, block associations, chambers of commerce, boards of trade, real estate organizations, community service clubs (Kiwanis, Lions, etc.), and nonprofit management support groups * philanthropy, volunteerism, and grant making, including private foundations, community foundations, fundraising federations such as United Way

Environment and Animals

* environmental protection, pollution prevention, recycling, and conservation of water, land, energy, and forests * parks and gardens, botanical gardens, garden clubs * environmental education, outdoor survival programs * animal welfare including wildlife preservation and protection, protection of endangered species, bird sanctuaries, wildlife refuges, veterinary services, zoos, and zoological societies

International Relations and Development

• foreign policy research and analysis
• international development and relief
• international human rights
• international peace and security

* cultural and student exchange (high school, university, teacher, professional study) * development, including micro-financing and small business loans, health care, disease care, and prevention, nutrition, water safety, agricultural assistance, reproductive health and family planning, transportation, and education * disaster relief, including emergency food, shelter, medical, and sanitation services * human rights, including civil society, freedom of the press, voting, legal issues, and safety * refugees and migration, including camps, asylum, settlement, and negotiation

Religion-Related

* care for members, including religious services, religious education, counseling, and administration * social services, such food pantries, donations and drives, and shelters * affordable housing, including redevelopment efforts, support for first time home buyers, and Habitat for Humanity * education and community support, including tutoring, job training, and substance abuse programs

Make your pick!

Sources:

https://www.experience.com/advice/careers/professions/what-sectors-make-up-the-non-profit-industry/

http://idealistcareer.wpengine.netdna-cdn.com/wp-content/uploads/2013/05/IdealistGuideforFirstTimeJobSeekers.pdf

https://www.forbes.com/lists/top-charities/#49dd865b5f50