How important is government funding to nonprofits?

We learned from the recently released Causes Count: the Economic Power of California’s Nonprofit Sector – New Findings that government funding represents 30% of nonprofit revenue in California, more than foundation funding and individual giving combined! We also learned that nonprofits struggle to find and secure government grants – particularly their first one.

In total, government provides more than ten times the funding to nonprofits as foundations, especially in human services, health and education, but also in the arts, environment, animal welfare, consumer protection, and elsewhere. But there are lots of workshops and resources on getting foundation grants compared to very few on getting government grants. We hope our new A Nonprofit’s Guide to Getting Your First Government Grant helps community nonprofits access government funding.

The spending bill passed and signed on December 20, 2019 included some great news for nonprofits: the tax on nonprofit employee transportation benefits, written into federal law in 2017, was repealed. This is a major victory for the nonprofit sector and a testament to what we can accomplish when the nonprofit community works together and reaches out to allies.

This illogical and harmful tax forced nonprofits to pay a 21% tax on employee benefits: yes, a tax on expenses. If a nonprofit paid for transit passes or employee parking – even on property they owned – they had to pay 21% of that amount in taxes. CalNonprofits members told us that some were forced to discontinue transportation benefits, and others paid tens of thousands of dollars in unnecessary taxes, and in additional accounting and audit costs.

We are thrilled to announce that the new Causes Count report, including new original research and a deep dive into the government/nonprofit relationship, is here!

Which of these statements about California nonprofits is true?
A) Nonprofits employ more people than in the construction industry.
B) Nonprofits bring more than $40 billion into our state each year from government, out-of-state foundations, and individual donors around the world.
C) Volunteers contribute the equivalent of about 331,000 full-time jobs to their communities.
D) California relies on nonprofits to deliver approximately 32% of Medi-Cal services to communities.

To find out the answer we invite you to download the full report (here) or order your own full color printed copy of the 72-page report (here). Printed copies of the report will be mailed starting December 2nd.

Did you miss the webinar with our CEO Jan Masaoka and Policy Director Nancy Berlin discussing highlights from the report? You can watch the recording here.

What's new in Causes Count - New Findings?

New research for this report includes a deep-dive into the relationship between government and nonprofits — the first time an analysis like this has ever been done in California. We also used the baseline data from the first-ever economic impact report, called Causes Count, released in 2014 to find new insights into California's nonprofit sector, including:

• disparities within our sector are growing
• California is now a net-exporter of foundation dollars
• nonprofit sector's annual revenue grew faster than did California's GDP as a whole

We are proud to have partnered with The Nonprofit Institute at the University of San Diego on this research, and we are grateful to the many advisors and our funders who made this report possible.