Arizona Study Reiterates Nonprofit Ascendancy in the Economy

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AZ-Nonprofits

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February 21, 2016; Arizona Republic

While the nonprofit sector is not traditionally top-of-mind when thinking about economic growth, the Arizona Republic featured a new report, “Arizona Nonprofits: Economic Power, Positive Impact,” which recognizes the growing importance of the nonprofit sector as an economic force within Arizona.

The full report, produced by the Arizona Community Foundation, APS, and the Maricopa County Industrial Development Authority, will be available via this website in March 2016. As described in the Republic’s coverage, key findings as to the contribution of the nonprofit sector include:

  • Adds $22.4 billion to the state’s economy.
  • Generates $28 billion in annual revenue.
  • Accounts for more than 324,000 jobs.
  • Holds nearly $49 billion of assets.

The scale of the Arizona nonprofit sector suggests that it’s too big to overlook, and stakeholders indicate the optimism of the findings. The Arizona Republic interviewed Steve Seleznow, president and CEO of the Arizona Community Foundation, which helped fund the study:

Gone are the days of viewing nonprofits as simple charities operating on shoestring budgets, heavily reliant on volunteers and donations to stay afloat. They’re showing an ability to sustain themselves. They have worked through difficult times.

We’ll have to wait for the full study to gain insight from the analysis, but this report echoes a study into the nonprofit contribution to the Californian economy in “Causes Count: The Economic Power of California’s Nonprofit Sector,” which NPQ featured in August 2014.

In December 2013, we provided our own analysis into the factors making nonprofits one of the most growth-oriented sectors in the U.S. economy. In that article, we recognized healthcare and education as the two largest segments in the nonprofit sector nationwide. (Giving USA reports that the highest giving by sector goes to religious nonprofits, but because the primary source for nonprofit data is the Form 990, which religious nonprofits are exempt from filing and only a minority of religious institutions chooses to file, religious activity is hard to gauge.) The importance of the nonprofit sector to the healthcare system is recognized in the Arizona study: Hospitals and other health organizations make up little more than 6 percent of roughly 21,000 statewide nonprofits but account for 43 percent of assets, 56 percent of jobs, and 62 percent of revenue. Similarly, California’s “Causes Count” study showed that hospitals and health-related nonprofits comprised 11 percent of all nonprofit organizations yet accounted for 65 percent of the sector’s total revenue and 47 percent of its assets.

In May 2015, NPQ reported the increased scrutiny that nonprofit hospitals face, and these organizations can expect further attention as their scale features in more reports. Ultimately, the growing realization of the major role that the wider nonprofit sector plays in the nation’s economic life will prompt lively debate regarding the purpose and contribution that our communities expect of our sector.— James Araci