High-Performance Partnerships - National Academy of Public ...

FIGURE 2-2
NONPROFIT SECTOR REVENUES
INDEPENDENT SECTOR REVENUES BY SOURCE. 1997
Other
Revenue
11.4%
Government
31.3%
Private
Contributions
19.9%
Dues, Fees,
and Charges
37.5%
DISTRIBUTION OF INDEPENDENT SECTOR REVENUES
BY SUBSECTOR. 1997
Civic, Social,
and Fraternal
2.7%
Social and
Legal Services
11.5%
Religious
Organizations
11.5%
Education
Research
17.9%
Arts and Culture 2.3%
Foundations 5.1%
Health
Services
49.0%
TOTAL 1997 REVENUES: $664.8 BILLION
Source: New Nonprofit Almanac
Involved with nearly every aspect of community
life, government establishes the “legal and
policy context for the private market and nonprofit
community” (Fosler). The public sector
must increasingly work with and rely on the
business and nonprofit sectors to deliver services
that communities require and deserve.
This emerging need to share responsibility for
serving citizens can chafe governments that are
accustomed to a high degree of control.
Governments operate under extraordinary
public and media scrutiny and must provide
an opportunity for everyone to be heard.
Given its legal obligation to fairly represent the
public interest, government’s emphasis is heavily
on process and making sure that all the
“rules” are met. The focus on results is too
often on short-term accomplishments and
parochial concerns. The rigidity of public
organizations is legendary for good reason,
posing a significant challenge for cross-sector
collaboration.
The nonprofit sector (also known as the independent
sector) is composed of a wide variety
of organizations that support and provide
charitable, educational, and cultural services
and activities. Nonprofit groups range from
small neighborhood-based operations to international
conglomerates, from religious institutions
to entrepreneurial service providers.
Some function similar to businesses in that
they must generate sufficient revenue to cover
their expenses. The nonprofit sector also
includes foundations and other major funders.
Six percent of all U.S. organizations are nonprofit,
and they collectively represent nearly 7
percent of the nation’s economic activity and 9
percent of its employment (New Nonprofit
Almanac). Greater detail about the nonprofit
sector’s role in the nation’s economy is included
in Figure 2-2.
Despite its diversity, the nonprofit sector has
some common characteristics. Generally, nonprofits
are organized around a specific, altruistic
mission that drives their activities and ability
to obtain the volunteer and external contributions
that support many of their operations.
The organizations serve a common good that
is not served by businesses. Thus, they are
granted tax-exempt status, making them legally
distinct from the business sector. Due to
their service orientation, nonprofits engender
community support and develop expertise not
generally present in other sectors. However,
they increasingly are becoming entrepreneurial
and results oriented to survive the competition
for limited resources.
As shown in Figure 2-2, 31 percent of all nonprofit
sector revenue comes from government
contracts and grants. Yet nonprofits some-
23 Powering the Future: High-Performance Partnerships