Jacksonville, FL–The number of individuals supporting Northeast Florida’s nonprofit organizations “declined significantly” between 2007 and 2017, according to the 2019 State of the Sector report released today by the Nonprofit Center for Northeast Florida.
The area lost 29,000 donors.
The makeup of donors changed dramatically, with all those who continue to give donating a greater percentage of their incomes.
Despite this, the number of financially viable nonprofits operating in Duval, Clay, Baker, St. Johns, and Nassau counties remained relatively stable at roughly 1300.
In sum, nonprofits are becoming increasingly dependent on the region’s wealthier households while the percentage of lower-income donors dropped from 67% to 55% between 2007 and 2016. However, these lower-income donors continue to give a disproportionate percentage of their income to charitable organizations.
In issuing the 2019 report, Center CEO Rena Coughlin said “the State of the Sector report has always had a dual purpose, helping nonprofits develop their identity as a powerful industry and helping the community recognize the nonprofit sector’s complexity, diversity, and value.” This year’s report, Coughlin said, “adds depth to the previous year’s data and, as always, identifies both positive and challenging trends for the sector.”
The report finds that Northeast Florida’s households have not recovered from the 2008 economic collapse and the Great Recession that followed, despite the national economic expansion and robust stock market returns. “Median household income, when adjusted for inflation, remains below 2007 levels” in four of the five counties included in the study. And poverty has barely budged, from 15% of the population living in poverty in 2012 to 14% in 2017.
Individual giving reflects this economic reality.
Historically, the percentage of lower-income donors (those making less than $100,000 AGI) have given generously and “dig deep,” according to the report. Their giving increased from 9% to roughly 12% of income from 2007 to 2016, while the wealthiest (AGI over $200,000) increased their charitable giving from 3.5% to 4.4% of income.
When hospitals and health institutions are excluded, area nonprofits receive over half their annual revenues from individual donors (55%), roughly 14% from government in all its forms (federal, state, and local grants), and 27% from earned income.
And while the number of nonprofits remained relatively stable, 72% are small with annual revenues under $500,000. The sector’s “churn rate,” that is, the percentage of nonprofits that cease operations over a five-year period, increased from 30% to 32% between 2012-2017. While this rate compares favorably to for-profit businesses, 50% of which fail before their five-year anniversary, the nonprofit churn rate coupled with a shrinking donor class suggests a challenging fund-raising environment for the region’s “quality of life” sector.
According to Mary Kress Littlepage of KBT & Associates, who developed the reports, “nonprofits reflect their community — its needs, its priorities, and its circumstances.” She added that the nonprofit sector “is an important local industry, employing 13% of the region’s private workforce. Policy makers would be wise to pay attention to the financial health of the sector responsible for the area’s quality of life.”
The State of the Sector report compiles the most recent available IRS data on area nonprofits that file an informational tax return. It began as a collaboration between the Jessie Ball duPont Fund and the Nonprofit Center in 2004. Arguably the largest such local study of individual giving and nonprofit financial health, the study offers a glimpse into how many individuals from which income groups make charitable donations. It also describes how many nonprofits experience annual operating losses, their revenue mix, and the services they provide.
Note: These studies were first commissioned when Dr. Magill served as president of Jessie Ball duPont Fund