A recent article in The Arizona Republic and azcentral.com described Arizona’s nonprofit sector as “a force to be reckoned with”—and recent data suggest this is more than an anecdotal compliment.
The findings of a recent report, Arizona Nonprofits: Economic Power, Positive Impact, show that our state’s nonprofit sector not only contributes positively to our social fabric; it is also a critical economic driver in our state.
The research found that nonprofits are Arizona’s fifth-largest employer as a sector. That means that one in every 16 working Arizonans is employed by a nonprofit. With a labor force more than 165,000 strong, Arizona’s nonprofit sector employs more people than the construction, agriculture and mining sectors combined. This segment of the workforce includes doctors and nurses at hospitals, social workers in shelters, maintenance staff at churches, fitness instructors at community centers and docents at museums, among many other professions.
The findings show that the sector is a sophisticated and thriving network of more than 21,000 social-purpose organizations that account for eight percent of Gross State Product. Nonprofit organizations paid out some $7.7 billion in wages and generated $22.4 billion in economic activity in 2014.
Perhaps the most exciting trend identified is that the nonprofit sector has grown significantly in the last five years, adding nearly 18,000 jobs since 2009. And these gains in employment are directly supporting critical needs in our state: health, education and the environment.
And perhaps the most surprising finding was that nonprofits are not nearly as reliant on donor gifts and foundation grants as one might think. In fact, only 27 percent of nonprofit revenue comes from charitable donations. The other 73 percent comes from government contracts and earned income.
The power of the findings of this report should give everyone who has ever supported a nonprofit organization—whether as a volunteer, donor or staff member—a renewed sense of pride. And it should remind us why it’s so important to support our nonprofits.
We hope this report helps donors understand that nonprofit organizations seeking support are doing so from a position of strength, with innovative programs, an eye toward problem-solving and sound management practices. The social and cultural impact of the nonprofit sector is invaluable, as our communities are enriched daily by their work in ways both large and small. But it’s worth reminding ourselves this sector is important to our state in other ways—employing residents, generating revenue, and bolstering our economy.