US Nonprofit Sector NAICS 624, 712, 813
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Industry Summary
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.
Recent Developments
Feb 3, 2026 - Nonprofits Prepare For ACA Subsidies Expiration
- Nonprofit organizations are preparing to assist those with Affordable Care Act (ACA) marketplace health insurance plans who see significant increases in their monthly premiums, according to the Kaiser Family Foundation. More than 20 million people in the US face sharply higher health insurance costs as of January 1, 2026, due to the expiration of enhanced tax credits that helped ACA enrollees. A Franklin County, OH, nonprofit that provides free prescription medication to residents in need is one of the organizations preparing for a potential demand increase. The Charitable Pharmacy served close to 1,700 people in Franklin County in 2025, dispensing more than $10 million worth of prescriptions, according to its annual report. Dr. Taylor Reed, the pharmacy's executive director, said that he has seen the need among people unable to afford their medicine change year over year. He said that he worries about the impact higher health insurance costs could have. More than 100,000 Ohioans are expected to stop buying health insurance in 2026 if costs increase, according to Health Policy Institute of Ohio.
- US non-profit organizations eliminated tens of thousands of jobs in 2025, according to The Financial Times. Federal grant reductions or eliminations and a decrease in donations have driven the staffing cuts. The sector accounts for 10% of private payrolls, compared to 8% for manufacturing, according to the US Department of Labor. More than 300,000 non-profits employ 12.8 million US workers.
- The Trump administration has made significant funding cuts for shelter, emergency food, AmeriCorps, and other programs but the deepest cuts are expected to hit by 2026 and 2027, according to the Center for an Urban Future. That’s when cuts to homeless housing programs will kick in and when new work requirements to qualify for Medicaid become active. Many of the 22 nonprofit organizations surveyed by the Center for an Urban Future said that almost a third of their budgets come from federal dollars, and for some the proportion can be as high as 50%. Some organizations are opting out of applying for certain grants because of new federal requirements that they can’t agree to, such as barring helping undocumented people, according to the Center for an Urban Future.
- Nonprofit industry revenue is forecast to increase at a 5.02% compounded annual rate from 2025 to 2029, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Personal income, an indicator of charitable giving rates, increased 5.06% year over year and a 0.37% month over month in August 2025, according to the US Bureau of Economic Analysis. 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 and revenue at museums, zoos, and parks increased slightly during the third quarter of 2024 compared to the prior quarter, according to the US Census Bureau.
Industry Revenue
US Nonprofit Sector
Industry Structure
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.
Industry Forecast
Industry Forecast
US Nonprofit Sector Industry Growth
Source: Vertical IQ and Inforum
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