Written by Erin Tanner, Chief Financial Officer of Central Indiana Community Foundation
In 2023, Indiana University’s Lilly Family School of Philanthropy came out with a survey showing Americans’ general awareness of and opinions about nonprofits. Among many striking results was the following:
Only about 5% of Americans believe they or someone in their family had been helped by a nonprofit in the past year.
When you consider the vastness of the nonprofit landscape, that’s an alarmingly low number (especially since about 10% of the private sector is employed at a nonprofit).
That disconnect represents an opportunity for nonprofits to share a new perspective on the full value we bring to our community. Sharing that larger story not only gives people a more accurate representation of who we are, but it can also show decision makers how consequential we are.
Many times, nonprofits highlight the most heartwarming stories to showcase the passion and generosity that our sector thrives on. While that will always be a crucial story, more of us need to extend the conversation.
If we want our sector to be better understood and supported, especially by donors, policymakers, and business leaders, then we need to get comfortable talking about our full social and economic impact.
Nonprofits Affect Us All
If you are like the average American, you were born at a nonprofit. Your primary and secondary school probably benefited from one (if it wasn’t one, itself). If you attended college, you probably went to a nonprofit educational institution. If you worship, you probably attend a nonprofit congregation. If you get sick or injured, you probably visit a nonprofit hospital to get better.
If you love art, history, science, or nature, you may go to a nonprofit museum to enjoy them and learn more. If you appreciate music, theater, or dance, you have probably been entertained in the audience at a nonprofit performance venue.
If you enjoyed shows like Mr. Rogers’ Neighborhood as a child, or if you joined the Boy Scouts or Girl Scouts, played little league or learned ballet, then your childhood was partly shaped by a nonprofit.
If you, your parents, or your neighbors ever fell on hard times, you or they may have utilized nonprofit food banks, shelters, or career centers to weather the storm.
Not to put too fine a point on it, but your final resting place will probably be on the grounds of a nonprofit!
So, let’s admit it, our lives as Hoosiers and as Americans would look very different without the nonprofit sector.
…Especially our local and national economies.
Nonprofit is a Tax Status, Not a Business Model
With a name like “nonprofit”, it is understandable that our sector can be misunderstood or underestimated when it comes to our economic contribution.
First, let’s be clear: “Nonprofit” and “no profit” are two very different concepts.
Nonprofits can (and to be sustainable, must) bring in more revenue than they spend. A “profit” at a nonprofit is reflected as a positive change in net assets on financial statements—in other words, a surplus. Unlike a private business, though, nonprofits can’t distribute this surplus to an individual, a family, a board, or a group of shareholders. Instead, our surpluses are legally required to go back into our institutions and services.
But the real economic story goes well beyond our profit structure. Indianapolis area nonprofits employ over 160,000 individuals and earn more than $43 billion in total revenue each year.
Nationally, nonprofits spend almost $2 trillion a year, with more than $800 billion spent on payroll taxes, benefits and salaries.
That means we pay into Social Security and Medicare while also providing wages and access to healthcare for millions of employees across the country.
More importantly, many of our services—childcare, adult daycare, job training—allow parents and unpaid caregivers to enter or commit to a profession. That increases earning potential, upward mobility and financial solvency for families.
Many of our services will continue to yield both individual and community-wide economic benefits years down the road.
For example, when we provide housing stability or rental assistance, that can allow children to remain housed, improving educational outcomes. When we offer character-building programs to youth (mentorship, coaching, etc.), that also helps kids become better students and, eventually, better team members. Later, when children are granted scholarship funds from one of our foundations, that significantly increases their likelihood of completing a degree.
In each case, services are boosting both individual and a community’s overall educational attainment and workforce market value.
Shifting the Conversation
Let’s look at four key audiences and the corresponding messages that can expand the conversation to cover both hearts and minds.
Donors
Share the ripple effect of their philanthropy. Do your services fuel broader economic growth? Do they provide relief for working families and students? Are you helping reduce recidivism and crime in ways donors may not realize?
Policymakers
Figure out whose constituents you serve. Talk to representatives about how your services support the area’s workforce or improve a district’s overall quality of life. Share the downstream, indirect benefits of services on lawmakers’ commonly cited issues. This goes for the possible removal of your services, too. If, for example, rental assistance is reduced, share how that could ultimately increase homelessness and the need for other support, such as food or utility assistance.
Community Members
Help them connect the dots. Sticking with rental assistance, do landlords in your area understand that it ultimately helps them pay their own mortgage? Remind our communities that their schools, hospitals, cultural institutions, after-school programs, and places of worship all likely fall under the nonprofit umbrella in some way.
Business Leaders
Speak their language. Emphasize the ways your programs create stability and opportunity for working families—especially their employees. Some Hoosier businesses were surprised to learn how many working families utilize food pantries in our state. Others may be surprised by how many of their workers utilize nonprofit childcare. How does your nonprofit sustain working households, enhance talent pipelines, or support businesses?
Not Either/Or, But Both
Most of us can better appreciate data through stories. Try to use both.
That way, your message will reflect the full scope of who you are: a mission-driven organization that is also a crucial segment of local, state, and national economies.
The good news is that, even in an era of declining public trust, studies show that nonprofit organizations have the highest level of trust (39%) among all major institutions, including business, government, and religious organizations. However, when none of our institutions capture a majority of the public’s trust, we all have work to do.
Let’s ensure that more of the public associates nonprofits with daily interactions, quality jobs, increased prosperity, added stability, and fuel for economic growth.
That’s the impact we’re already having. It’s time more in our community knew it.
Leave A Comment