Understanding the size and breadth of the social sector has never been more essential. In recent years, this arena has grown increasingly influential; it has been vital in addressing many of society’s significant challenges, such as inequality and poverty. The sector is enormously complex, however. It crosscuts politics, religion, gender, race, and geography. To truly comprehend its immense impact on our lives, we must look closely at all the entities and people who make up this pivotal domain. From high-profile international associations to small grassroots initiatives, each organization can have an outsized impact on improving our communities for generations to come. Their stories, investments in services and products, and resource development efforts—are all crucial elements of seeking equitable change in an increasingly interconnected world.
However, partly due to its multifaceted nature and deep complexity, the social sector still needs to be discovered. Few people understand what it is or why we should care about it. For many years, this divide existed primarily because of a lack of resources dedicated to making the sector accessible and understandable. But that all changed with the rise of social media, which put the industry in conversation with millions around the world who are eager to learn more about what lies beyond their backyard. Indeed, social media has enabled citizens to stay constantly informed on issues facing their community and country—and even gave them platforms to become agents for change themselves.
The social sector encompasses more than just nonprofits.
The social sector is a powerful force for positive change, driven by private action and spearheaded by non governmental organizations and individuals in all corners of society. It encompasses a range of activities, from charitable nonprofits to social enterprises, and few paths to creating systemic change beyond the government. Social businesses are one example of this – they operate like traditional businesses in many respects, with profits made through selling goods or provide services. Still, without seeking tax exempt status, they are also required to deliver broader social benefits as well. Consequently, these high performing organizations are able to generate a positive return for both their investors and the wider community alike. In this way, the social sector can bridge conventional divisions between business and government in order to create meaningful change. In recent years, political organizations have had a profound impact on elections. We often think of politics in terms of the public and private sectors, but these political action committees (PACs) occupy a unique space between social sector and private sector. While PACs accept private sector donations, they are neither wholly public nor completely private. In recent years, the boundaries between business, government, and social services have been growing thinner. Organizations now must acknowledge current events and take a stance on moral issues; the government relies on nonprofit organizations for certain services. By representing this intermixing structure through data visualization tools like dashboards, we can better understand how PACs are intertwined in our society today.
Nonprofits don’t always have to be 501(c)(3) organizations.
Despite the great variety of not for profit companies, 501(c)(3)s are still overwhelmingly the most common type. It’s clear why: they have unique tax benefits and also enjoy that widespread recognition as a “charity” or “charity organization.” After all, of 1.8 million nonprofits operating in the U.S., it is estimated that a complete 80% of them (1.4 million) are 501(c)(3)s: far outnumbering labor unions, social welfare, faith based organizations, business associations, fraternal societies and other types of nonprofits. Still, it’s essential to recognize that the broader nonprofit sector encompasses many more organizations than just 501(c)(3)s, each with its own unique organization’s mission and purpose.
Most 501(c)(3) public charities are religious or provide human services.
With such a vast amount of religious and human service organizations existing in the social sector, it’s no wonder why they are considered to be the most common types of 501(c)(3) public charities. With over 318,000 religion-focused 501(c)(3)s and over 302,000 human services 501(c)(3)s (which account for 18% and 17% of all public charities, respectively), there undoubtedly exists an abundance of faith-based and social causes doing incredible works globally. Not to mention that many religious organizations do not require registration with the IRS, meaning that the total number of faith-based and social welfare support groups are likely far more expansive than these figures alone suggest. We should all make every effort to both contribute directly or indirectly–through donations or volunteer hours–to assisting any one of these noble religious and human service organizations; after all, their efforts have been documented time and time again as invaluable to our society.
Donations aren’t the only option for income for Nonprofits.
Charitable donations are obviously essential for funding nonprofits but earned income plays an even more prominent role. In fact, made income sources such as program and service revenue account for a whopping $1.6 trillion of total nonprofit sector revenue—that’s nearly four times more money than charitable giving or contributions! This number is impressive when you consider that universities and hospitals, which often generate their own large amounts of revenue, do not typically count towards this statistic. It should be noted that this total includes a wide variety of items, such as income from the sale of goods and provide services, rental fees, and investments. Thus one can see just how critical earned income is for keeping these essential entities running successfully every year.
Most nonprofits are small yet powerful forces for good in their communities.
Running a nonprofit organization is no small feat, especially given the statistics around revenue and staffing. 69% of nonprofits have an annual income of less than $50,000, with over half having two or fewer employees and 43% having no paid employees at all. When you look at the other end of the spectrum, only 8% of nonprofits have annual revenue greater than $1 million, and only 22% can staff more than 20 people – it almost seems impossible to make significant changes with such limited resources. But through hard work and dedication, these social sector organizations continue to strive for their missions every day – a true testament to their commitment and passion.
Dedicating one-fifth of funds towards general operational costs – will be worth it!
With an estimated grant total of $46 billion dollars, foundation funding has an incredible capacity to bring lasting change in a variety of fields. While program development receives around 34% of the funding pie, 22% is also allocated to general operating support – an integral and often overlooked pillar in creating sustained success. Additionally, it is noteworthy that education or we can say that career development is one of the most funded subject areas—revealing the foundations’ investment in building strong futures for generations to come. Whether through general operating support or program development, giving long-term attention to initiatives helps ensure that progress takes permanent root, bearing positive fruit for everyone’s benefit.
Whether you’re a startup organization or a leading corporation, CommunityForce provides fully customizable, all-in-one online grant management solutions to maximize your efficiency, simplify complex processes, and improve collaboration so you can focus on increasing your impact. We’ve helped organizations streamline their entire process no matter the size and scope of their giving.
