As the Spring semester grinds to a close, and the burden of grading, the bane of all professors’ lives comes inevitably to an end, it is time to get back into the world of blogging. Today’s topic comes courtesy of an assignment I gave to my Not For Profit Accounting class. Municipal and NFP accounting constitutes approximately 20% (give or take for any particular year) of the financial reporting section of the Uniform CPA exam so students are intensely interested in it. They are often amazed how municipal accounting differs from the previous accounting they have learned. That is a story for another day though.
We sometimes need to stop and remind ourselves how important the nonprofit segment of the economy is. I assigned a short paper to my class on the importance of the NFP segment to the entire economy. Ashley Robinson, one of my students who earned two bachelor’s degrees in four years and will be employed by Pricewaterhousecoopers, summarized what a powerful economic force the NFP sector is. Ashley reported,
“As of 2022 there are about 1.5 million not-for-profit organizations in the United States,and over 10 million worldwide. They employ about 10% of the workforce, but worldwide they employ about 7.4% of the workforce. About 5.7% of the United States GDP comes from not-for-profits. This is the third largest workforce in the United States just behind retail and manufacturing. These entities make money off donations, and in 2021 about 56% of people in the United States donated to charity, and 45% of those people donate in a monthly program. There is about 10% of the overall revenue that comes from individual donations. 80% of their revenue comes from government grants.”
These are truly staggering numbers in many respects. I am continuously amazed by the number of NFP organizations, the often underpaid and overworked employees who keep at their jobs because of their personal values, and the number of Americans who donate to a charity on a monthly basis. This continues to show the United States and its citizens are and have been a generous nation. There were times when I served on the board of an NFP organization that I felt as if no one cared. I would quickly come to my senses though and realize I was wrong. Perhaps this little reminder that the vast majority of Americans do care will provide a little lift to those involved in the NFP world.
Another student made some interesting comments about the geographical dispersion of NFP organizations. He posited that there are more NFP organizations located in capital cities and in the eastern part of the United States. The former assertion seems reasonable to me and the latter he suggests occurs because of legacy wealth in the United States. I think that bears additional research though. If any of my readers have any insight into that, please let me know.