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Front Page » Opinion » Responsibilities of thousands of nonprofits outpace funding

Responsibilities of thousands of nonprofits outpace funding

Written by on June 9, 2020
Responsibilities of thousands of nonprofits outpace funding

A data-laden report on the economic impact of nonprofits in Miami-Dade County points to a growing dependence on nonprofits to do what government once was expected to do but an inadequate share of community resources with which to do the job.

In the first broad look at the nonprofit sector here in 14 years, academic researchers probed the staffing, income, expenditures, service ranges and far more of the staggering total of 9,331 501c(3) nonprofits in Miami-Dade.

The just-released report by Florida International University’s Jorgé M. Perez Metropolitan Center researchers, spearheaded by the Greater Miami Chamber of Commerce and Philanthropy Miami, is thorough in pinpointing the significance of nonprofit organizations here in a data-driven study that captures the magnitude of the sector without detailing the need, which is even more staggering in the era of Covid-19.

The bare facts:

The number of 501c(3) nonprofits in Miami-Dade has declined nearly 44% since 2010 while their average revenues rose 142%. Those nonprofits have an economic impact here of $23.7 billion, according to the study.

The study was just wrapping up as Covid-19 became the overriding factor in Miami and elsewhere, so researchers tacked on a survey looking just at the impact of the virus. It found that 39% of nonprofits surveyed had added Covid-19 related services.

Meanwhile, the virus was hammering those organizations along with the rest of the economy. Some 45% of these nonprofits had gotten short-term government loans or other funding, but that funding was mostly a two- to three-month lifeline, not a long-term answer to the drain on resources. More than half the nonprofits said the virus had caused them to cancel or change scheduling on the fundraising events, a major source of their revenues.

This is especially important because every nonprofit that researchers interviewed reported that a portion of their funding comes from donations from their local communities. As the needs of the communities are growing in the Covid-19 era, it’s clear that money available for donations is diminishing – that’s not a conclusion of the researchers, but it’s inescapable when we look at double-digit unemployment.

Only the community of donors whose abilities to fund the nonprofits are tied to a rising stock market rather than a battered underlying economy seem to us to be better positioned now than before to help nonprofits, whose burdens are largely growing. More will consequently be asked of persons who themselves have been hurt economically.

The burdens of nonprofits are spread across many sectors, including education and health, the two largest nonprofit groupings in total employees.

The nonprofit education sector lists 39,658 employees. That doesn’t include all nonprofits that are education oriented. Three of the four largest nonprofits listed in an unclassified grouping, not as education, are St. Thomas University, Palmer Trinity Private School and Scheck Hillel Community School.

The health sector is next largest in employment, with 38,503 persons employed – and again, Borinquen Health Care Center is among the larger unclassified nonprofits, not health.

Education and health are the nonprofit clusters that receive the greater shares of annual contributions, with education receiving $1.48 billion in contributions a year and health $715 million, the researchers found. (Contributions are clearly just one slice of revenue: health had $6.3 billion in revenue and education $4.9 billion.)

Human services, which is particularly stressed with the coronavirus onslaught, receives $699 million in yearly contributions, the research found. But there are 2,056 human service nonprofits in the county compared with 892 in education and 510 in health.

The report found that employees of charitable organizations represent 8% of the county’s workforce, a total of almost 115,000 persons. And 94% of the charitable nonprofits in Miami-Dade are local, not national – they’re serving our community.

Does 9,331 nonprofits here seem overwhelming? If so, note a remarkable detail from the research: only 2,472 of those organizations reported any revenues at all in 2019 – just 26.5% of them. Of those 2,472, the average revenue was about $5.9 million – but the average hides a very broad range. Some 71% of all charities that received any at all had revenues of under $500,000, while 18 charities had revenues of $100 million or more.

In figures for which the researchers quote the Internal Revenue Service’s business master file from last September, the largest revenue producer, the University of Miami, is listed at nearly $3.6 billion, followed by Baptist Hospital of Miami at $1.3 billion and Baptist Health of South Florida at $807 million, Variety Children’s Hospital (Nicklaus) at $674 million, and South Miami Hospital at almost $607 million. Health and education organizations account for 77% of charitable assets here and almost 79% of revenues.

The top revenues in the arts, culture and humanities are listed at $46 million-plus for the Museum of Science, in environment the Everglades Foundation at $7.8 million, in human services Goodwill Industries of South Florida at $129 million, in international the American Nicaraguan Foundation at $111 million, in public and societal benefit the Miami Foundation at $122 million, in religion the Greater Miami Hebrew Academy at $13.8 million, and in mutual and membership the Mount Sinai Hospital Insurance Trust at $8.7 million.

But for each giant hundreds of nonprofits toil with relatively small revenues. It’s also clear that many of the nonprofits have substantial earned revenues, not just donations. 

But the donations to nonprofits are vital, and Miami lags in making them.

While in 2010 Miami nonprofit revenues were $9.96 billion, rising to $11.82 billion in 2013 and in 2018 reaching almost $13.59 billion, the charitable donations make up only about 25% of their expenses.

The researchers found that Miami-Dade’s rate of giving to charities is below that of the state as a whole. Floridians who had taxable deductions on their federal tax returns in 2016 averaged $6,980, yet in Miami-Dade the average was $6,077, about 13% less. The average for the nation that year was $6,332.

While the average was lower in Miami-Dade, so was the percentage of taxpayers who were donors. Nationally, 25% of taxpayers had charitable deductions on taxes, but in both Florida and Miami-Dade it was only 19%.

The takeaway: charities here are growing revenue as a whole, but the big growth seems to be in health and education among a small number of big-name institutions. There can be little doubt of their need – but more than ever in a Covid-19 era more is being asked of relatively smaller organizations in human services and other categories that, like the people they are meant to help, have been battered by the pandemic’s economic fallout.

This study couldn’t be more timely in putting into perspective the nonprofit picture at the outset of Covid-19. It will be vital, however, to track the health of nonprofits and the levels of both their need and the giving they receive in the months ahead to shore up gaps in this community.

Tracking the health of the charitable community and its individual components can’t be allowed to be just an academic exercise. This study is a great snapshot of a specific time, but charitable health has to be a motion picture with frequent interaction from the giving public – which needs to be expanded far beyond its current 19% slice of taxpayers.

The numbers in the study are clear. The human need is equally clear – and is likely to become more acute in months ahead. Those who have resources will have to dig deeper into their pockets to help the nonprofit sector keep this entire community strong.