US Nonprofit Sector

The 1,812,815 organizations registered with the IRS as tax exempt under section 501 c of the IRS code include public charities, private and community foundations, advocacy and social welfare groups, business associations, social and recreation clubs, labor unions, and fraternal societies. Other tax exempt entities under other IRS rules include religious organizations and political organizations.

Reliance on Donations

Many nonprofits rely heavily on private contributions from individuals, corporations, and philanthropic organizations.

Retaining Staff and Volunteers

Nonprofit organizations can be highly dependent on volunteers for many staff positions and for carrying out their work.

Sep 10, 2026 - Volunteer Support Funding Is Often Overlooked

• About 19¢ of every $100 that foundations give goes to volunteer engagement, according to the Points of Light Foundation. A key reason for this may be that foundations rarely ask about volunteers in their grant application forms, according to the Nonprofit Quarterly. While foundations often fund direct services, they do not fund support to the volunteer workforce that brings direct services to scale, nor do they fund the volunteerism infrastructure. Cost estimates for recruiting and deploying volunteers ranged from $136 to $2,000 per volunteer, according to the Points of Light Foundation.
• One-third of US nonprofits had some type of government funding disruption in 2025, according to Smart Cities Dive. About 34% of nonprofits have experienced or anticipate a funding loss from the federal government and 29% from state and local government. About 84% of respondents to The Nonprofit Finance Fund’s 2025 State of the Nonprofit Sector Survey expect future cuts.
• About 73% of nonprofits report an increased demand for services in 2026, according to Nonprofit Quarterly. Levels this high haven't been seen since the coronavirus pandemic. Some 66% of nonprofit leaders express deep concern about their organization’s financial stability as it becomes increasingly difficult to secure grants. About 30% of nonprofits have experienced a staffing reduction in 2026.
• Nonprofit industry revenue is forecast to increase at a 5.46% compounded annual rate from 2026 to 2030, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Nonprofits generate revenue through membership dues, subscriptions, fees for services, sales of branded products, advertising, grants, contracts, donations, fundraising, and investments. Cash flow can be seasonal with greater giving in the fourth quarter and more membership renewals in the first quarter. Social assistance revenue increased 8.18% year over year and 0.46% quarter over quarter during the fourth quarter of 2025, according to the US Census Bureau.

Industry size & Structure

The nonprofit sector is comprised of 1.8 million organizations that employ 12.5 million workers and generate $3.7 trillion in annual revenue, according to Candid.

• Data from Candid on the nonprofit sector are based on organizations registered with the IRS as tax exempt under the 501(c) section of the IRS Code and includes both organizations with employees and those without employees.
• Nonprofits are not a separate sector as classified by the Census Bureau. The following industry categories are predominantly composed of nonprofit organizations: individual and family services; community food, housing, and relief services; vocational rehabilitation services; child day care services; museums, historical sites, and similar institutions; religious organizations; grantmaking and giving services; social advocacy organizations; civic and social organizations; and business, professional, labor, political, and similar organizations.
• The predominantly nonprofit industry categories reported by the Census Bureau represent 5.9% of the nation's Gross Domestic Product (GDP) and employ 4.8% of the country's workers.
• The sector is highly fragmented, according to Census Bureau data. The 50 largest social assistance firms account for 13% of the subsector’s revenue. The 50 largest religious, grantmaking, civic, professional, and similar organizations represent 18% of that subsector’s revenue. Within the museums, historical sites, and similar institutions subsector, the 50 largest firms account for 35% of its revenue.
• The nonprofit sector includes employer firms and owner-operated establishments with no employees. The owners of nonemployer firms typically perform the work or use volunteer or contract labor.