Report: The Charity Industry vs. The Nonprofit Sector

Report summarizes the employment, number of establishments, and revenue in 68 NAICS 6-digit industry sectors where nonprofit and charity organizations operate, according to the last US Economic Survey in 2002. 

There has been some discussion in the ARNOVA email list about my decision to use the phrase "charity industry" rather than "nonprofit sector" in describing what I write about. 

To me, the term sector has an old fashioned ring to it, and not just because of its association with the Cold War.  It comes out of a belief that gained currency in the 1960s that nonprofit organizations represent a third sector between government and private business.  I don't hold the belief that the entirety of the charitable world is independent in that way.  Some institutions may enjoy a degree of autonomy, but many are created specifically to assist with some governmental or private endeavor. 

Also, the term sector implies a degree of cohesiveness and commonality that is completely at odds with the reality of charity and nonprofit organizations.  My suspicion is that some of the people who talk of the nonprofit sector harbor a desire to claim the role of its spokesperson. 

Industry, on the other hand, carries the implication of people at work, and that's what charities and nonprofits represent to me.  I like the slightly paradoxical juxtiposition of the words charity and industry.  And it tweaks those charity industry commentators who want to put charities in a class apart from mundane business considerations (like financial accountability). 

The US Economic Census also considers charities in an industrial context.  The census conducts this survey every five years, and the last one was done in 2002.  In its reports, the Census recognizes and tabulates separately enterprises, employment, and revenues of tax-exempt entities (that is, charities and nonprofits) in some 68 industries as described by six-digit NAICS codes (though unfortunately they don't include educational institutions or churches in the economic census).  I've listed them in this two-page report, "The Charity Industry in the United States" (PDF 89Kb).

This list brings out some of the characteristics of the charity industry that make it so difficult to grasp.  There are only a handful of activities that are exclusively carried out by charities or nonprofits.  Many of these fall into the category of what are now being called civil society organizations: human rights, evironmental, and other advocacy groups, foundations, civic groups, business and professional organizations.  These groups account for only about 10% of the employment in charity industries, but 38% of the organizations, as they tend to be relatively small. 

But that means that over 90% of the employment and 62% of the enterprises in the charity industry engage in activities side-by-side with for-profit organizations. 

The bulk of the personnel is in fields where charities dominate, especially in the health care and human services.  With over 4.3 million employees, general hospitals alone account for 45% of the employment in all listed charity industries (excluding schools & churches), while 84% of the enterprises and 90% of the employment in hospitals is in charity organizations. 

For the most part, the activity areas that account for the largest number of staff involve direct care or training.  The handful of exceptions are nonprofit scientific research & development (118,000 employees), fitness & recreational sports centers (114,000), and golf courses and country clubs (124,000). 

Some of the activities that the media associate with charities turn out to be relatively insignificant as employers:  temporary shelters employ about 61,000, roughly the same number employed as foundation staff.  Community food services only employ 29,000, just slightly more than the staff employed by nonprofit law firms (26,000). 

In the cultural area, the static charity attractions (museums, parks, historical sites, zoos) employ about 111,000.  Close behind are the performers (theater and musical groups and event promoters with and without facilities) with 106,000 employees. 

This is just a broad survey of what I am calling the charity industry, and of course it's missing the educational and church component.  But it does give a more detailed picture of what charities do and how many people they need to do it.  And it shows that what the media and the general public like to think of as charity is not necessarily where the real activity takes place. 

Comments

[Ken]

I am interested in working at a charity organization in the northern NJ area. How do I find employment opportunites if in fact there are any?
Thank you
Regards,
Ken

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