arizona nonprofits scope of the sector - asu · 2010 arizona nonprofits • scope of the sector...

ASU Lodestar Center for Philanthropy & Nonprofit Innovation

arizona nonprofitsscope of the sector

understanding Arizona’s nonprofits and private foundations

2010

2010 Arizona Nonprofits • Scope of the Sector

Arizona public charities at a glance

Arizona’s biggest nonprofits

Which nonprofits get the most donations?

Arizona nonprofits: how many and how much, by subsector

Arizona nonprofits: how many and how much, by county

Private grantmaking foundations

Arizona’s largest foundations, by assets

Arizona’s largest foundations, by grants

Arizona’s congregations

Arizona nonprofits that are not public charities

Yesterday, today and the future

Data sources

This report was authored by Dr. Mark A. Hager and Brintha Gardner with editing support from Dr. Robert Ashcraft, Stephanie La Loggia, Amy O’Hara and Jill Watts. It was completed under the auspices of the ASU Lodestar Center for Philanthropy & Nonprofit Innovation, with layout and design sup-port from the ASU College of Public Programs (Felipe Ruiz).

Copyright © 2010 Arizona Board of Regents for and on behalf of the ASU Lodestar Center for Philanthropy and Nonprofit Innovation, College of Public Programs, Arizona State University. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the express written permission of the ASU Lodestar Center, except for brief quotations in critical reviews. The authors may be reached at ASU Lodestar Center, 411 N. Central Ave., Suite 500, Phoenix, AZ 85004-0691.

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2010… is a periodic report on the Arizona nonprofit sector produced by the Lodestar Center for Philanthropy & Nonprofit Innovation at Arizona State University.

… focuses on public charities, which are nonprofit organizations that have been recognized by the federal government as public-serving organizations under section 501(c)(3) of the Internal Revenue Code. This includes organizations that raise their own money through fees-for-service or contracts with government, as well as organizations that rely to a large extent on grants and donations. They operate across the full range of social action, including social services, health care, education, arts and culture, and civic engagement.

… reports on private grantmaking foundations, which receive little to no operating capital from the public. Rather, they operate primarily as vehicles to transform personal and corporate wealth into grants to public charities. Public or community foundations receive most of their capital from public donations, so they are included in the summaries of public charities.

… reflects a vibrant and maturing nonprofit and philanthropic sector in Arizona. It grows, shrinks, moves, and breathes with its people.

… represents a moment in time before economic winds influenced the fates and operations of nearly every individual and organization in the state. This report is based on data from 2007 and 2008, amid shrinking donations and nonprofit budgets. The ASU Lodestar Center continues to collect new data and monitor sector trends as nonprofits weather the challenging economy.

focus

reports

reflection

representation

1


Arizona public charitiesat a glance

5,000+

7,000+

3,000

Arizona is home to nearly 15,000 public charities that give us a means to express our ideals, engage our communities, worship, and provide services to our neighbors.

Over 5,000 Arizona public charities are required to file the extensive Form 990 with the IRS. Since nonprofits report different things in annual reports, and some do not produce public financial reports at all, IRS Form 990 is a consistent way for donors to know the details of what nonprofit organizations are doing and how they are spending their money.

• More than 5,000 public charities report total revenues (circa 2007) of $18.9 billion.

• Almost nine out of every ten public charities report contributed revenues, which include donations from individuals as well as grants and other contributions from foundations and other organizations. Contributions to public charities based in Arizona total $3.4 billion (circa 2007, not including substantial contributions to religious congregations). Only 18 percent (to as high as 27 percent, if congregations reported their donations they receive) of nonprofit revenues in Arizona come from contributions. A large majority of total nonprofit revenues are earned from fees, due in large part to the concentration of contract income in Arizona’s hospitals.

Over 7,000 Arizona-based public charities with receipts of $25,000 or less file a ‘postcard’ Form 990 with no financial information. Because of this limitation, we know little about the scale and activities of this group. Nonprofits file a more extensive Form 990 when their annual gross receipts exceed $25,000.

Nearly 3,000 public charities in Arizona are registered with the federal government as churches, temples, mosques, and other religious houses of worship. Their registration allows donors to make tax-deductible donations to these houses of worship, but the organizations are not required to report to the government. We know from other sources that churches are the recipients of a large portion of our charitable contributions, but those contributions escape the sweep of this report.

2


$ 3,432,271,299

21,000

$ 18,893,342,254

public charities (form 990 filers)**

21,129

**Does not include an estimated $2.2 billion donated to religious congregations. These congregations get more donations than any other category of nonprofit, but they are not required to report these contributions to the IRS.

*For the purposes of this report, those who file the Form 990 and 990EZ are referred to as “Form 990 filers,” reporting gross receipts over $25,000.

total revenues, circa 2007

total contributed revenues, circa 2007

Arizona-based nonprofit organizations registered with the IRS

grand total over

public charities total

private foundations

other nonprofit organizations

Form 990 and 990EZ filers* 5,045

Postcard 990 filers (receipts under $25,000) 7,047

Congregations (do not file IRS Form 990) 2,816

1,069

5,152

3


Banner Health $ 3.027 billion

Southwest Catholic Health Network Corporation $ 1.638 billion

Scottsdale Healthcare Hospitals $ 774.2 million

Mayo Clinic Arizona $ 725.0 million

University Medical Center Corporation $ 512.2 million

Sun Health Corporation $ 511.8 million

Blood Systems $ 499.2 million

John C. Lincoln Hospital $ 480.2 million

Carondelet Health Network $ 455.5 million

Tucson Medical Center $ 403.5 million

Arizona’s biggest nonprofits

Although the sector is dominated numerically by very small, community-based organizations with no staff and little financial activity, it is dominated financially by a relatively small number of mammoth organizations.

All of the 10 largest public charities in the state are hospitals or health systems. Banner Health, one of the largest employers in the Phoenix area, is by far the state’s largest nonprofit. In the third quarter of 2008, Banner Health got even bigger with the acquisition of Sun Health, which is number six on the list.

These 10 largest nonprofits alone represent over $9.0 billion in revenues. They constitute almost half of the $18.9 billion in revenues for the 5,045 Arizona public charities that report their financial positions to the IRS.

Largest Arizona-based nonprofits, by revenues (circa 2007)

4


which nonprofits receive the most donations?People more often associate the nonprofit sector with the organizations they support with their dona-

tions, not big hospitals. The list below shows the 10 Arizona-based nonprofits that receive the most in

donations and grants.

The largest ‘donative’ nonprofit in

the state is the Muscular Dystrophy

Association. It is one of four national or

international organizations on this list that

are headquartered in Arizona. The other

three are Food for the Hungry, Make-a-

Wish, and the Alliance Defense Fund.

These organizations are national or inter-

national in scope and receive donations

from across the country and world.

Substantial contributions support the

Arizona State University and University

of Arizona Foundations, nonprofits that

receive private donations in support of

their respective institutions. Despite its name, Science Foundation Arizona operates like a traditional

nonprofit, benefitting recently from large State commitments to education and research in science,

engineering, and technology.

Big local nonprofits make the list, too, including St. Mary’s Food Bank Alliance, the Valley of the Sun

United Way, and Mayo Clinic Arizona. St. Mary’s Food Bank reminds us that donations need not always

be cash donations. Ninety percent of the value of contributions to St. Mary’s Food Bank is food and

other noncash support.

5

Arizona-based nonprofits with the most grants and contributions (circa 2007)

Muscular Dystrophy Association* $ 137.6 million

Arizona State University Foundation $ 107.3 million

St. Mary’s Food Bank Alliance $ 101.7 million

Food for the Hungry* $ 88.2 million

University of Arizona Foundation $ 75.1 million

Science Foundation Arizona $ 56.7 million

Valley of the Sun United Way $ 55.8 million

Mayo Clinic Arizona $ 52.5 million

Make-a-Wish Foundation of America* $ 46.9 million

Alliance Defense Fund* $ 30.6 million

* National (or International) nonprofit headquartered in Arizona.


Looking across the broad breadth of more than 21,000 Arizona nonprofit organizations recognized by the federal government, more than 5,000 are human services organizations-- approximately one in every four. Human services is itself a broad category, with Arizona nonprof-its representing the full range of youth development (363 organizations), recreation and sports (1,639), public safety and disaster preparedness (177), housing and shelter (423), food and agriculture (148), employment (291), and crime and legal-related (297).

Among public charities large enough to file the extensive Form 990 (second column page 7), human services still dominates numerically with 31 percent of filers. Education nonprofits run a strong second, at 20 percent of filers.

While 17 percent of Arizona’s nonprofits are primarily religion-related, they only make up 6.5 percent of Form 990 filers. Only one in 10 religion-related nonprofits file Form 990, primarily because churches (and other houses of worship) are not required to file. This is an important piece of missing information, so conclusions about spending by and donations to religious organization should be drawn with care.

While the number of health nonprofits is small in comparison with human services and education nonprofits, we know from page 4 that some of them are very large. In the third column on the following page, we see that contributions to health nonprofits based in Arizona rivaled contributions to human services organizations, both of which approach $1 billion. In contrast, arts, culture and humanities nonprofits, which represent 11 percent of Form 990 filers, tend to be small and only garner 4 percent of aggregate contributions to Arizona nonprofits.

Religion-related filers claim only $142 million in donations, but this is one place where the hole in the data can lead to false conclusions. Individual donors in the United States give most of their charitable contributions to their churches. Giving USA (Giving USA Foundation and Indiana University Center on Philanthropy) estimates total giving to religious nonprofits at $103.3 billion in 2007. That year, Arizona’s 6.4 million people represented 2.1 percent of the U.S. population. If Arizonans give to religious nonprof-its at the same rate as everybody else, our 2.1 percent share of religious giving would be $2.2 billion: more than charitable giving to Arizona health and human service nonprofits combined.

Health nonprofits dominate the Arizona nonprofit sector with $13.6 billion in total revenues. As illus-trated on page 4, the 10 largest hospitals alone represent nearly half of charitable revenues in the state.

human services

religion-related

health vs. arts

giving to religion

health dominates

6


how many and how much, by subsector

number of organizations contributed & total revenues*

Arts, Culture & Humanities

Education

Environment

Health

Human services

International

Philanthropy & Grantmaking

Public & Societal Benefit

Religion

Mutual Benefit

Unknown

1,608

2,611

755

1,369

5,387

286

1,726

2,722

3,603

669

393

21,129

7.6%

12.4%

3.6%

6.5%

25.5%

1.4%

8.2%

12.9%

17.1%

3.2%

1.9%

550

1,014

241

601

1,552

103

268

388

328

-

-

5,045

10.9%

20.1%

4.8%

11.9%

30.8%

2.0%

5.3%

7.7%

6.5%

-

-

$ 126.8 m

$ 671.9 m

$ 112.9 m

$ 922.7 m

$ 949.2 m

$ 132.6 m

$ 168.0 m

$ 206.0 m

$ 142.3 m***

-

-

$ 3.4 billion

3.7%

19.6%

3.3%

26.9%

27.7%

3.9%

4.9%

6.0%

4.1%

-

-

$ 248.5 m

$ 1.345 b

$ 180.5 m

$ 13.553 b

$ 2.333 b

$ 141.1 m

$ 279.2 m

$ 609.6 m

$ 202.6 m

-

-

$ 18.9 billion

1.3%

7.1%

1.0%

71.7%

12.4%

0.7%

1.5%

3.2%

1.1%

-

-

Arizona nonprofits:

subsector all form 990filers**

total contributed revenues,

form 990 filers,circa 2007*

total revenues, form 990 filers,

circa 2007*

7

21,000nonprofit organizations registered with the IRS

over

Arizona-based

* Contributed revenues include donations or grants. **For the purposes of this report, those who file the Form 990 and 990EZ are referred to as “Form 990 filers,” reporting gross receipts over $25,000.***See “giving to religion” on previous page for an estimate of giving to all religious organizations.


The concentration of Arizona nonprofits reflects the concentration of population in its urban centers. More than three out of four of Arizona’s registered charities are in Maricopa (Phoenix) and Pima (Tucson) Counties.

Similarly, charitable contributions are concentrated in the public charities in Maricopa and Pima Counties. Maricopa County is home to 58 percent of public charities that are required to file the extensive Form 990 with the IRS, but lay claim to 63 percent ($2.2 billion) of donations and grants to such organizations across the state. Pima County is home to 19 percent of these filers, but their nonprofits represent 23 percent of charitable grants and contributions. Together, these two counties represent 86 percent of grants and contributions to Arizona-based nonprofits.

Conversely, the other 13 counties are the homes of not only fewer, but also smaller charities. Greenlee County, among the counties with the sparsest charitable assets in the country, is an outlier. Gila, Cochise, and La Paz Counties are also characterized by a low sum of contributed revenues when compared to the number of nonprofits in the county. For example, Gila County holds its own with 62 Form 990 filers, which is 1.2 percent of such organizations in the state. However, these public charities in Gila County represent only 0.3 percent of contributions to Arizona-based public charities.

The concentration of large hospitals and state health care systems in the Phoenix area results in an extreme concentration of charitable revenues in Maricopa County. Two-thirds of all nonprofit revenues are found there. Pima County represents another 20 percent. Coconino’s 4 percent of state charitable revenues is greater than expected, given the number of public charities in the county. Those revenues are driven to a large extent by the Flagstaff Medical Center’s service across northern Arizona.

concentration

charitable contributions

outside maricopa and pima counties

healthcare revenues

8


how many and how much, by county

Apache

Cochise

Coconino

Gila

Graham

Greenlee

La Paz

Maricopa

Mohave

Navajo

Pima

Pinal

Santa Cruz

Yavapai

Yuma

194

650

652

280

113

39

96

11,780

624

365

3,945

607

191

1,158

435

21,129

40

122

183

62

20

3

10

2,948

111

72

981

91

50

265

87

5,045

$ 24.7 m

$ 30.9 m

$ 104.6 m

$ 9.4 m

$ 7.8 m

$ 150,000

$ 2.5 m

$ 2.155 b

$ 55.8 m

$ 43.9 m

$ 804.6 m

$ 53.2 m

$ 16.0 m

$ 74.3 m

$ 49.0 m

$ 3.4 billion

$ 74.9 m

$ 226.0 m

$ 719.6 m

$ 44.5 m

$ 59.0 m

$ 220,000

$ 19.4 m

$ 12.5 b

$ 239.4 m

$ 176.2 m

$ 3.7 b

$ 195.3 m

$ 31.9 m

$ 506.1 m

$ 381.6 m

$ 18.9 billion

Arizona nonprofits:

countytotal number of

nonprofitsnumber of

form 990 filers**

total revenues, form 990 filers,

circa 2007*

9

Important note: These totals do not include the substantial individual contributions to churches and other congregations, which are not required to report to the IRS. These contributions alone total more than an additional $2 billion.* Contributed revenues include donations or grants. **For the purposes of this report, those who file the Form 990 and 990EZ are referred to as “Form 990 filers,” reporting gross receipts over $25,000.

number of organizations contributed & total revenues*total contributed

revenues,form 990 filers,

circa 2007*


private grantmaking foundations

The facing page illustrates how private foundations’ assets and charitable giving (circa 2007) are distributed across Arizona’s counties. Maricopa County is home to the most private foundations and the greatest concentration of private foundation assets. Maricopa County’s private foundations represent 85 percent of private foundation giving in the state, circa 2007.

Pima County runs a distant second, although its nearly $1 billion in assets and 10 percent of the state’s private foundation giving represents most of the remainder. The other notable concentration of private foundation assets and giving are found in Yavapai County, thanks mainly to the Del E. Webb and J.W. Kieckhefer Foundations.

Some private foundations are very small, or even inactive. This is conspicuously true in Apache County, whose one foundation reports $1 in assets and no giving. Navajo County’s two very small private foundations reported no current giving.

An important part of the philanthropic landscape of any city, state, or county is the private foun-dations that have grown up in the past half-century. Arizona lags behind much of the country in private foundation assets, which means fewer grant dollars for Arizona nonprofits. This may change quickly, depending on the fates of Arizona’s corporations and wealthy benefac-tors. In a short time, the Virginia G. Piper Charitable Trust has emerged as both the largest Arizona private foundation and the most charitable in terms of grants given.

Arizona is home to over 1,000 private foundations. However, most are small: only 300 have more than $1 million in assets. Most have no staff. Rather, these mostly-small private foundations are a vehicle for wealthy Arizona residents to distribute their charitable contributions each year.

$ 4,465,619,678

$ 239,668,682

private foundations (circa 2007)

total giving

total assets

10


their assets and grantmaking (circa 2007)

Apache

Cochise

Coconino

Gila

Graham

Greenlee

La Paz

Maricopa

Mohave

Navajo

Pima

Pinal

Santa Cruz

Yavapai

Yuma

Arizona

1

11

20

8

0

1

2

722

6

2

225

13

10

41

7

1,069

$ 1

$ 12.8 m

$ 24.8 m

$ 4.5 m

-

$ 1.8 m

$ 77,740

$ 3.293 b

$ 0.9 m

$ 438

$ 953.7 m

$ 11.2 m

$ 20.7 m

$ 135.0 m

$ 7.2 m

$ 4.5 billion

-

$ 256,000

$ 562,000

$ 227,000

-

$ 51,000

$ 400

$ 203.3 m

$ 67,000

-

$ 24.9 m

$ 519,000

$ 339,000

$ 9.1 m

$ 324,000

$ 239.7 million

Arizona’s private foundations

countynumber of

private foundationsaggregate private foundation assets,

circa 2007

aggregate private foundation giving,

circa 2007

11

$239.7m(circa 2007)

private foundation givingtotal Arizona-based


Virginia G. Piper Charitable Trust $ 644.2 m

Lincoln Institute of Land Policy $ 504.5 m

Community Finance Corporation $ 392.2 m

Flinn Foundation $ 221.4 m

Research Corporation $ 178.5 m

Kemper & Ethel Marley Foundation $ 161.0 m

Stardust Foundation $ 130.5 m

Steele Foundation $ 109.7 m

Emma Eccles Jones Foundation $ 79.4 m

Dorrance Family Foundation $ 76.4 m

Arizona’s largest foundations, by assets

Many non-Arizona-based private foundations make grants to Arizona nonprofits, and many Arizona-based private foundations make grants outside the state. One such example, the Nina Mason Pulliam Charitable Trust, is conspicuously missing from this list because it is incorporated in Indiana, and our report includes only Arizona-based organizations. In 2007, the Indiana-based Pulliam Trust held assets of $401.3 million.

The Helios Education Foundation is also missing from the list. Since Helios was initially founded by a large private contribution, it was initially (and currently) classified as a public charity rather than a private foundation. In Septem-ber 2008, the Helios Education Foundation reported $664.9 million in assets.

In March 2008, the Arizona Community Foundation held $274 million in assets. Because it receives most of its money from broad public support, the Arizona Community Foundation is listed among the public charities rather than here among the private grantmaking foundations. From March 2007 to March 2008, it paid out $28.2 million in grants, including $14.9 million from donor advised funds.

A newcomer on the list of large Arizona private foundations is the Lincoln Institute of Land Policy. Originally a public charity, the private operating foundation was established in 2006 through a merger with the Lincoln Founda-tion. Based in Massachusetts and incorporated in Arizona, the new Lincoln Institute has provided support for the Sonoran Institute and the Superstition Vistas projects.

These 10 largest private foundations represent $2.5 billion in charitable assets, which is more than half of Arizona’s total of $4.5 billion in private foundation assets, circa 2007.

private foundations assets

(circa 2007)

12


Virginia G. Piper Charitable Trust $ 20.7 m

Flinn Foundation $ 10.6 m

Arthur R. Metz Foundation $ 10.5 m

Sterne-Elder Memorial Trust $ 9.0 m

Dorrance Family Foundation $ 8.5 m

Kemper & Ethel Marley Foundation $ 7.9 m

Aurora Foundation $ 7.0 m

Emma Eccles Jones Foundation $ 6.1 m

Denny Sanford Foundation $ 6.0 m

Stardust Foundation $ 5.8 m

Arizona’s largest foundations by grants given

In a short number of years, the Virginia G. Piper Charitable Trust has established itself as the largest and most generous private foundation in the state. Its charitable contributions, gifts, and grants paid are nearly double that of the next largest Arizona-based private foundation.

Indiana’s Pulliam Trust is again conspicuously missing from the list. The Nina Mason Pulliam Charitable Trust maintains a Phoenix office and invested half of its $15.2 million in 2007 grants to Arizona nonprofits. Helios is also missing from the list. During the 2008 fiscal year, it paid out $27 million in grants.

The 10 Arizona-based private foundations listed on this page made grants totaling $92 million (circa 2007). This represents more than a third of all grants paid out by Arizona’s 1,069 private foundations.

Although not a private grantmaking foundation, the largest grantmaker in the state is the Valley of the Sun United Way, which raised and gave $45.6 million in grants to Arizona nonprofits in its 2007-2008 fiscal year. United Way chapters across the state collectively granted $60.8 million that year.

foundations total grants

(circa 2007)

(circa 2007)

13

$ 644.2m$ 20.7m

Arizona’s largest private grantmaking foundation

Virginia G. Piper Charitable Trust

in assets

in grants given


Arizona’s congregations

number ofcongregations county

total congregations2,816

Congregations include churches, temples, mosques,

and other formal houses of worship. They are exempt

from filing Form 990 with the IRS, and most choose

not to file. However, they register with the federal

government for the purpose of securing their right

to receive tax-deductible contributions from their

members. Americans support congregations more

than they support any other kind of charity. Near-

ly one in every five public charities in Arizona is a

congregation.

Although congregations are sometimes overlooked

in summaries of the nonprofit sector, they are an

integral part of our communities, and they are a major

recipient of our charitable contributions. Many congre-

gations provide critical social services to their mem-

bers, and manage important social service outreach

programs in their communities.

The chart to the left shows how Arizona’s congrega-

tions are distributed around the state. Their econom-

ic heft, though considerable, is harder to document

since they do not report to a central authority.

41

107

79

36

14

6

19

14

Apache

Cochise

Coconino

Gila

Graham

Greenlee

La Paz

Maricopa

Mohave

Navajo

Pima

Pinal

Santa Cruz

Yavapai

Yuma

1,544

86

63

440

121

19

169

72


the remaining 5,152 (mostly) tax-exempt organizations

501(c)(1)

501(c)(2)

501(c)(4)

501(c)(5)

501(c)(6)

501(c)(7)

501(c)(8)

501(c)(9)

501(c)(10)

501(c)(11)

501(c)(12)

501(c)(13)

501(c)(14)

501(c)(15)

501(c)(16)

501(c)(17)

501(c)(19)

501(c)(25)

501(d)(40)

527

4947(a)(1)

4947(a)(2)

1

28

1,492

358

1,021

784

522

58

142

1

88

22

29

84

1

4

459

2

4

1

34

17

5,152

Corporation originated under Act of Congress, including Federal Credit Unions

Title-holding corporations for a tax-exempt organization

Civic leagues, social welfare organizations, and local associations of employees

Labor, agricultural, horticultural organizations

Business leagues, chambers of commerce, real estate boards

Social and recreational clubs that provide pleasure, recreation, and social activities

Fraternal beneficiary societies and associations, providing for payment of member benefits

Voluntary employees’ beneficiary associations

Domestic fraternal societies and associations with no member benefits

Teachers retirement fund association

Benevolent life insurance associations, mutual ditch or irrigation companies

Cemetery companies providing burial and incidental activities for members

State-chartered credit unions of mutual reserve funds offering loans to members

Mutual insurance companies or associations

Cooperative organization to finance crop operations

Supplemental unemployment benefit trusts

Posts or organizations of war veterans

Title-holding companies for pensions

Apostolic and religious organizations

Political organization

Non-exempt private foundations

Non-exempt split interest trusts

Arizona nonprofits that are not public charities:

IRC sectionnumber

of Arizonanonprofits

description

15


yesterday, today and the futurea look back

contributions

declining revenues

resilience

looking forward

This report represents a snapshot in a time that has perhaps passed us by. Based on data mostly from 2006, 2007, and 2008, this snapshot shows a time of vibrant charitable revenues and as-sets in Arizona. However, it does not take into account the extent of current declines, and future historians may document our current economic conditions as a low point. This report does not reflect the extent of decline that many in the sector have felt over the past two years.

What can we expect beyond 2010? Giving USA (Giving USA Foundation and the Indiana University Center on Philanthropy) reports that current dollar charitable giving declined 3.6 percent from 2008 to 2009. When adjusting for the price deflation, the percent decline is 3.2 percent. Anecdotal reports do not suggest much change for 2010, pushing a projected economic recovery possibly into 2011.

Declines in giving dramatically affect the one in five organizations that rely on charitable con-tributions. Earned incomes will decline, too, although hospitals and health systems, which represent the lion’s share of revenues for public charities in the state, will continue to garner their insurance payments and government contracts. In summary, most nonprofits will see declines in their revenues. Many will cut staff, and some will close.

However, while we see Arizona’s nonprofits bending under the strain of economic decline, we expect that most of them will not break. Organizations are employing a broad range of retrenchment strategies, cutting costs and seeking new streams of income. Even those that must close for a time are likely to re-emerge when the time is ripe. Obsolete organizations will be swept away, but visions and missions that have meaning to Arizona will not die. Restaurants, gift shops, and other businesses of all stripes will close, but our nonprofit organizations represent our hopes, values, and dreams. You cannot kill a dream.

In 2011, we anticipate that the Arizona nonprofit sector will look a lot like the one we see in 2007. Obsolete or ineffective organizations will be replaced by vibrant, new ones. Our most important service providers, civic engagers, social entrepreneurs, and holders of faith and value will still be there, dutifully carrying out our collective social needs.

16


analyses in this report draw from four sourcesForms 990 filed by public charities (organizations with a federal charitable exemption under section 501(c)(3) of the Internal Revenue Code), from datafiles available from the National Center for Charitable Statistics (NCCS). The most current filings are included in the NCCS core files, although filing irregularities and data administration introduce lags in the availability of the Forms. Of Arizona’s 5,045 public charities analyzed in this report that have filed Form 990 in recent years, 12 percent are reporting their 2008 fiscal year, 72 percent are reporting their 2007 fiscal year, 13 percent are reporting their 2006 fiscal year, and the remaining 3 percent (who may or may not still be active) are reporting on their 2005 fiscal year.

Some data have been amended by the author. Many large charities report government contracts as government grants rather than earned income, artificially inflating the aggregate total of donations and grants to state charities. The largest charities have been spot-checked and amended.

Form 990-PF filed by private grantmaking foundations, from datafiles available from NCCS. Of Arizona’s 1,069 private foundations analyzed in this report that have filed Form 990-PF in recent years, 10 percent are reporting their 2008 fiscal year, 80 percent are reporting their 2007 fiscal year, 7 percent are reporting their 2006 fiscal year, and 3 percent are reporting their 2005 fiscal year.

The list of Arizona organizations classified as tax-exempt public charities by the Internal Revenue Service (IRS) in February 2009, available from the IRS. This list corresponds with Publication 78, Cumulative List of Organizations described in Section 170(c) of the Internal Revenue Code of 1986.

Organizations exempt under some section of 501(c) of the Internal Revenue Code other than subsection 3, from datafiles available from the National Center for Charitable Statistics.

17



2010


College of Public Programs

411 N. Central Ave., Suite 500

Phoenix, AZ 85004-0691

602.496.0500

The mission of ASU’s Lodestar Center is to help build the capacity of the social sector by enhancing the effectiveness of those who lead, manage, and support nonprofit organizations.

http://lodestar.asu.edu

arizona nonprofits scope of the sector - asu · 2010 arizona nonprofits • scope of the sector...

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