Utah Loses 38 Percent of Nonprofits, Many are Rural

September 20, 2012; Source: Deseret News

Despite the fact that, according to the Chronicle of Philanthropy, Utah has the highest state per capita giving average with 10.6 percent of their discretionary income going to charity (based on 2008 data), a study performed by the Community Foundation of Utah reports that the state has lost 38 percent of its nonprofits since 2009 and that many of these were rural.

Four out of five nonprofits in Utah have annual budgets of $100,000 or less. This is pertinent because in 2010 – 2011 there was an IRS purge of organizations that were not reporting. There were about 275,000 organizations that lost their status nationwide – approximately 18 percent of the nation’s nonprofits. This hit small organizations hard because those with budgets under $25,000 did not have to report before 2006 and many never started after that requirement went into effect. But Fraser Nelson, executive director of the foundation, implies that corporate contributions in the state may also be playing a large part in the disproportionate drop.

At the beginning of the recession, “corporate giving in Utah tanked,” said Nelson. “There is no doubt that the worst nonprofits hit were in rural areas. Our data has showed this consistently.” Nelson said that these organizations were most vulnerable because most of their support came from businesses like car dealerships and local grocery stores, which cut back after the recession.

Even among the nonprofits survivors, according to this report, things are less than rosy. Less than 31 percent have three months operating capital on hand and an unsurprising 46 percent say they have felt no signs of economic recovery to date. –Ruth McCambridge