SE Valley Times

If all of the nonprofits in Arizona were grouped together as an industry, they would be the sixth-largest sector in the state — ahead of construction, transportation and warehousing, and accommodation and food service — in economic impact.

That was one of the findings in a recent research project by the Lodestar Center for Philanthropy and Nonprofit Innovation at Arizona State University.

The project, called Scope of the Arizona Nonprofit Sector, was based on census and Internal Revenue Service data and is presented as an interactive tool.

Robert Ashcraft, executive director of the Lodestar Center, stated that in addition to supporting ASU’s undergraduate and graduate degrees, the center provides its own professional and continuing education programs, original research, and capacity support services for the nonprofit sector.

“Our center has a big mission and a big portfolio," Ashcraft said. "But one thing is, how do we understand the nonprofit philanthropic sector, and what are its dimensions? What characteristics does it bring? How and what does that mean relative to other segments of community?”

“And we've revealed a very robust third sector, this quasi-public nonprofit philanthropic sector.”

Among the facts about the impact of Arizona nonprofits were:

- The nonprofit industry employs over 222,380 full- and part-time workers, representing nearly 7% of total statewide employment. Nonprofit employees earn 7.3% of the total wages paid in the state.

- The median wage for nonprofit workers is 11.6% greater than the overall state median wage, a difference of nearly $5,000.

- The median full-time wage for workers in the nonprofit sector is $47,305, above the $42,390 median full-time wage for all workers in the state. Higher pay in healthcare and higher education subsectors are a main reason for this difference.

- Of the total 28,379 nonprofit organizations in Arizona, faith-based organizations form the largest category at nearly 5,300. This includes traditional churches as well as groups like Habitat for Humanity that deliver social services. The next largest category is education-based organizations at nearly 4,300.

- Only 521 faith-based nonprofits reported any income due to IRS reporting exemptions. Those that did report showed a median income of $144,310.

- Among top public charities by revenue from contributions was St. Mary’s Food Bank Alliance with about $269 million.

One important aspect of nonprofit organizations is their tax-exempt status dating back to legislation passed on Aug. 17, 1894. This led to National Nonprofit Day celebrated annually on Aug. 17.

In honor of National Nonprofit Day, Ashcraft answered some questions from ASU News.

Question: What was surprising to you in the Scope of the Arizona Nonprofit Sector?

Answer: “The industry itself comes in as sixth largest... And that's true nationally... That seems to turn heads... It's quite a force.”

Q: A video accompanying your report discusses myths about lower pay for meaningful work within nonprofits. What did your research find?

A: “There are a lot of myths out there... There's been this stigma that wages are to be compressed... But CEOs earn seven figures or more.”

Q: What’s another myth?

A: “People say ‘Well they're tax exempt.’ Nonprofits pay taxes... Every state is different.”

Q: Volunteers aren’t paid wages; how can their contributions be accounted for?

A: “There is generally accepted calculus… Laurie Mook argues that nonprofits depend on volunteers… If not included somewhere… you're devaluing your organization…”

Q: The project noted no financial information available for 69% of organizations. Why?

A: “If you're under a $25k budget… For faith communities like Catholic Charities or Jewish Family Services... they file differently…”

Q: The research used census and IRS data; what does it leave out?

A: “When we talk about non-profits it's placeholder philanthropy… acts like giving money anonymously aren't counted…"

“We're getting more interested in generosity beyond philanthropy—impulse to give beyond ourselves…”