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
May 10, 2025 - Funding Struggles Continue
- Almost half of nonprofits lack sufficient funds to deliver all of their programs and services, according to the Forvis Mazars 2025 State of the Nonprofit Sector Report. Three out of four responding organizations have eliminated staff & reduced programs & services. About 65% of responding organizations are hampered by staffing shortages.
- President Trump has issued a memorandum that orders a review of federal funding for all nongovernmental organizations (NGOs). The memo said that federal agencies should "align future funding" with the interest of the United States and the "priorities of my administration." There are about 1.5 million advocacy and service NGOs connected with federal funding, according to the US State Department.
- The number of nonprofit organizations has increased 36% since 2000, according to Philanthropy Roundtable. Employment in the 501(c)(3) sector increased 30% from 2002 through 2022. Most of the growth in nonprofits during this time was in human services and public benefit organizations. This suggests that most of the increase in the number of organizations in recent decades is in response to increased demand for social services, according to Philanthropy Roundtable.
- 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 5.32% year over year and 0.28% month over month in November 2024, according to the 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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