The number of charitable organizations in the U.S. is on the rise. According to a new report from Urban Institute, about 1.44 million nonprofits were registered with the Internal Revenue Service in 2012, an increase of 8.6 percent from 2002. Another exciting finding from the report was that the nonprofit sector contributed $887 billion to the U.S. economy in 2012, which amounts to 5.4 percent of the overall gross domestic product.
Philanthropy is growing as well. Between 2012 and 2013, giving from individuals, foundations and businesses reached $335.17 billion, an increase of 4 percent. The report also found that more than a quarter of U.S. adults volunteered with an organization in 2013, contributing roughly 8 billion hours that amounted to about $163 billion worth of work.
Tools to help growth nonprofit sector
As the nonprofit sector continues to expand and evolve, organizations will need to invest in effective tools to keep the momentum going.
For instance, one issue with the number of nonprofits is that it can be difficult for donors to determine where to give their money. While some large names like Feeding America or United Way stand out, many others don’t receive the same attention. A digital tool from Kickstarter co-founder Perry Chen will help funders find lesser-known nonprofits. The website, called Dollar a Day, features a new nonprofit each day, Fast Company reported. Everyone who signs up for the site automatically donates to the featured nonprofit.
It’s a great way for people who want to use their own assets for good to contribute without doing a lot of research. The eventual goal is that contributors will discover new organizations and become more involved with them over time.
External discovery tools are great, but to be successful, nonprofits and foundations also need to leverage their own technology. For instance, if a charity does gain more attention from donors, it will need donation management software to continue to maintain relationships with new donors. Also, as assets in foundations continue to grow, grant management software could become a fundamental need for most organizations to effectively deliver funding. Finally, as organizations add to their volunteer corps, volunteer management software could become a greater need.
Continuous growth in the nonprofit sector is a great thing, but more activity also means greater challenges to meet. These organizations will need to make sure they are investing in the tools to ensure success.