Illinois Vital Force PDF

A Vital Force in Illinois:
The Nonprofit Economy 2011
Suggested Citation A Vital Force in Illinois: The Nonprofit Economy 2011 (Chicago, IL: Donors Forum, April 2011) Copies Copies of this report are available on Donors Forums website (www.donorsforum.org). Note This report and the recommendations herein are solely the responsibility and views of Donors Forum, and they are not intended to reflect the views of any donor or sponsor. Acknowledgement This report was made possible in part by the generosity of the Henrietta Lange Burk Fund, administered by Bank of America Merrill Lynch.
Copyright 2011 Donors Forum All rights reserved Printed in the United States of America
A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011 02
A Vital Force in Illinois:

The Nonprofit Economy 2011
A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011
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About Donors Forum

Donors Forum strengthens philanthropy and the nonprofit community in Illinois by providing resources and serviceseducation, networking, research, library services, publications, advocacy, and leadership for grantmakers, other donors, advisors, and nonprofits. In so doing, Donors Forum increases the ability of the philanthropic and nonprofit sector to meet the needs and enhance the lives of individuals, families, and communities. For more on the resources and services offered by Donors Forum, please visit www.donorsforum.org and see page 56.
About This Report

A Vital Force in Illinois: The Nonprofit Economy 2011 is Donors Forums fourth report since 2003 to examine the size and scope of Illinois nonprofit sector. While the first two reports focused on nonprofit sector employment, the third report, published in Fall 2008, also looked at nonprofit finances and contributions to Illinois Gross State Product (GSP). This focus has been broadened in the current report to include examples of nonprofits indirect contributions to the states economy, including cost savings to taxpayers and additional business activity generated by nonprofit spending on goods and services outside the sector. This change was made to emphasize the importance of the sector beyond the traditional size and dollar measures, in the hope of reaching new audiences and expanding support for the sector. For the same reason, a measure was added to assess the number of individuals who benefit from nonprofit programs and services. The underlying motives for these and other changes to the current report are changes in the external economic climate, creating unprecedented challenges to nonprofits financial resources and operating capacities. To chronicle these impacts, the sources of compiled data previously used for sector profile, contribution to GSP , and employment trend analyses were supplemented with a comprehensive secondary literature review encompassing published research studies and industry statistics, U.S. economy performance updates and projections, and State budget analyses. A full list of all the sources used is provided in the Works and Major Data Sources Cited section of the report. Key examples include Urban Institute sector profile publications, findings from the organizations 2010 state contracting relationships survey, and the database of nonprofit organizations maintained by its National Center for Charitable Statistics (NCCS) program; U.S. Bureau of Economic Analysis state-level GSP statistics and economic outlook updates; and reports on the Illinois State budget crisis by the Illinois Office of the Comptroller, the Center for Tax and Budget Accountability, and Voices for Children Illinois. The report also draws from information published by membership and advocacy organizations representing hospitals, private independent colleges and universities, the environment, and the arts; as well as an exhaustive profile of Illinois human services sector by the Illinois Human Services Commission.
Like the previous report, this report relies on the Quarterly Census of Employment and Wages (QCEW) for its nonprofit employment estimates and comparative analyses. The QCEW is a joint effort of the U.S. Bureau of Labor Statistics and state unemployment insurance systems and provides state-level monthly employment estimates for the many industry subsectors and subsector groups defined by the North American Industry Classification System (NAICS). Although the NAICS does not differentiate between nonprofit and for-profit organizations, the level of detail in the QCEW breakouts permits rough comparisons between the NAICS categories and the categories in the nonprofit sectors equivalent classification system, the National Taxonomy of Exempt Entities (NTEE). This is the basis for estimating nonprofit employment levels, a process that involves matching organization counts in the NCCS database against those in the QCEW data for each comparable NAICS and NTEE category. The process is detailed in the Methodology description in Appendix IV. NTEE category definitions are also provided in Appendix II. Comparison to the last report will reveal some changes in the estimation methodology. This partly reflects the current availability of publicly accessible QCEW data, precluding the necessity of using proprietary state agency data and methodology developed by Johns Hopkins Center for Civil Society Studies Director Les Salamon. The methodology used in the current report also reflects changes in the analysis objectives. Numerous surveys of nonprofitsincluding Donors Forums own Economic Outlook surveyindicate that State budget deficits and other funding declines resulting from the recession have had serious impacts on nonprofit operating capacities. These findings were included in this report, and a key focus of the employment analyses was to identify like trends in the QCEW data. This required a deeper level of comparative analysis than had previously been performed, with employment estimates made, not just for industry subsectors, but for individual groups within each subsector. Thus, for example, the especially high levels of job loss found for nonprofits in the Arts, Culture category were compared against the NAICS categories representing performing arts organizations and museums, groups within the Arts, Recreation subsector. Similar distinctions were also made for organizations in the Health, Social Assistance subsector, in order to differentiate between subsector categories with high levels of nonprofit employment (hospitals, social services agencies) and those largely made up of for-profit employers (ambulatory care providers). It should be emphasized that this report does not represent an update of the 2008 study, but rather a new approach to profiling the role and economic contributions of the sector in light of momentous changes in the larger economic climate.
Table of Contents
Introduction 1 Key Findings Recommendations and Implications 2 5
Importance of the Nonprofit Sector 9 Defining the Illinois Nonprofit Sector Profile of Illinois 501(c)(3) Public Charity Organizations The Nonprofit Sectors Contribution to Illinois Economy 9 10 19 28 28 32 37 39 41 48 51 53 56
Threats to the Nonprofit Sector Impacts of the Recession on the Nonprofit Sector Employment Trends in the Nonprofit Sector
Works and Major Data Sources Cited Appendix I: Defining the Nonprofit Sector Appendix II: Definition of 26 Single NTEE Categories Appendix III: Number of Illinois Public Charities circa 2009 by Region and County Appendix IV: Methodology for Estimating Nonprofit Employment End Notes Donors Forum at a Glance
Introduction
Nonprofit organizations address virtually every facet of life in Illinois. They further research to cure disease, they enrich our spirits with art and architecture, they provide healthcare to our parents and after-school programs for our kids, and they give job training to friends who have lost their jobs. And of course, nonprofits care for the most vulnerable in our society, feeding people who are hungry, visiting people who are infirm, and housing people who are homeless. While each of us could list still other ways in which nonprofits have touched our lives, the economic impact of nonprofit organizations is much less understood. To remedy this, Donors Forum began tracking employment in the nonprofit sector in Illinois a decade ago, and this reportpart of a series that began in 2003examines Illinois nonprofits role in supporting the states economy as well as nonprofits indirect economic contributions. This years report, unlike previous reports, includes information on the impact of external economic trends. A Vital Force in Illinois: The Nonprofit Economy 2011 opens with an overview of key findings and highlights, followed by recommendations for addressing the most critical challenges. The main body offers a comprehensive picture of the sector, and it is followed by the sources used in creating the analysis. The challenges that Illinois nonprofits face are difficult, but not impossible, to overcome. We urge everyoneelected officials, community leaders, board members and volunteers, and staff members of grantmakers and nonprofitsto use this report to learn more about the nonprofit sector and to spread the word about the vital role nonprofits play in our state. We also ask that each person do whatever he or she can to ensure that nonprofits have the resources needed to continue to provide their unique and critical services to the people of Illinois. Specific ideas are found in the Recommendations section, on pages 58. As always, we invite your questions and ideas about the report and its recommendations by contacting Donors Forum (312-578-0090, toll free 888-878-0090, or info@donorsforum.org) or by conversing with us on our blog, Facebook page, or Twitter stream (go to www.donorsforum.org for links). Thank you for your interest in strengthening and sustaining the nonprofits of Illinois.
Bob Glaves Chair, Board of Directors, Donors Forum
Valerie S. Lies President and CEO, Donors Forum
Key Findings
A Vital Force in Illinois: The Nonprofit Economy 2011
The nonprofit sector is a vital force in the economy of Illinois and in the well being of its residents. Nonprofit organizations are resources for everyone who lives in Illinois, and they are building blocks for every communityrural, suburban, and urbanacross the state. The broad and diverse programs and services of Illinois nonprofits address virtually every facet of human experience: they further research to cure disease, they enrich our spirits with art and architecture, they provide after-school programs for our kids, and they give job training to friends who have lost their jobs. Many nonprofits perform critical life-saving functions, ensuring that the environment is safe, increasing national security, and providing medical care, disaster relief, and refuge from family violence. And of course, nonprofits care for the most vulnerable in our society, feeding people who are hungry, visiting people who are infirm, and housing those who are homeless. In short, nonprofits provide essential services that enhance quality of life for all Illinois residents and contribute to their safety and survival. In Illinois, nonprofit organizations:
Rival the States Largest Industries in Size

There are 61,700 registered nonprofit organizations in Illinois. Of these, 35,800 filed a 990 annual report with the IRS. (Very small and religious organizations are not required to file). Even when counting by the more conservative number of 35,800, the nonprofit sector rivaled the states other industries in terms of number of establishments: construction (39,365), retail (37,565), and other services, e.g., personal, repair (36,725). Only one industry, professional/technical services, had a significantly larger number of establishments (50,762) than the number of nonprofits.
Account for Ten Percent All Private Sector Jobs

Nonprofits employed an estimated 483,492 workers in 2009. They account for 10.2% of all private sector organization employees and 8.7% of the states total workforce. The number of workers employed by nonprofits in Illinois exceeds the worldwide workforces of major corporate employers Boeing, Kraft, Abbott Labs, Sara Lee, and Motorola combined, and is more than double the size of the workforces of these sectors of private industry combined: construction and transportation, utilities, and warehousing.
Contribute Significantly to Illinois Economy

Illinois nonprofits contributed 9.4% of Illinois Gross State Product in 2008 or a total of $59.7 billion in expenditures on goods and services for maintaining their operations, surpassing the comparable percentages of economic output contributed by these industries: financial services (9.2%), professional/ technical services (9.1%), retail (5.5%), and construction (4.1%). Only real estate (12.5%) and manufacturing (12.4%) exceed the expenditures of nonprofits.
Have a Positive Multiplier Effect on the Economy

Nonprofits expenditures are multiplied, further strengthening the economy. For example, nonprofits spending on wages and payments to vendors is, in turn, spent by these recipients on housing, household products, leisure activities, and more. This spending supports the makers and distributors of the purchased items and services, thus creating and sustaining jobs and spurring further market spending.
Reduce State Costs

Many nonprofits save taxpayer funds by offering services that prevent or reduce costs. To cite just one example, leading economists estimate that every dollar spent on high-quality early education saves society seven dollars per single dollar invested in future costs for special education, delinquency, crime control, public assistance benefits, lost taxes, and other areas. To cite another example, they save the State money by reducing incarceration rates and related costs as a result of successful youth violence prevention and support services for ex-offenders.
Generate $9.3 Billion in Volunteer Time

In Illinois, the average value of volunteer services was $22.50 per hour in 2008 (Independent Sector, Value of Volunteer Time). This figure is all the more impressive in light of Illinois total volume of volunteer activity: 2.6 million Illinois residents volunteer their time, contributing a yearly average of 414.1 million hours of service (Corporation for National and Community Service, Volunteering in America 2010: National, State, and City Information). This means thatat $22.50 per hourthese services have a dollar value of $9.3 billion.
Face Serious Financial Challenges

The economic downturn that has affected virtually every U.S. business and household has also taken its toll on Illinois nonprofit sector. In a recent survey by Donors Forum, six in ten nonprofits reported having cash reserves of only three months or lessnearly the identical percentage as the previous year (63%). Roughly three in ten also continued to report delays in vendor payments, and two in ten report initiating a loan or new line of credit. Most alarmingly, 50% of nonprofits reported leaving vacant positions unfilled, and 46% eliminated full-time/regular staff positions (Donors Forum, Economic Outlook 2011).
See an Unprecedented Demand for Their Services

Exacerbating the financial pressures on nonprofits are unprecedented levels of service demand, most dramatically affecting those nonprofits that provide economic relief and human welfare/social assistance services. In 2009, the percentage of nonprofits reporting increased demand had surged to 67% from 11% in 2008a nearly six-fold increase. Yet this percentage continued to rise in 2010, climbing to 78% of the nonprofit surveyed by Donors Forum (Donors Forum, Economic Outlook 2011). Combined with staff cuts, the increased demand affects nonprofits ability to survive and maintain high-quality service.
Are Hit Hard by the States Budget Crisis

State government funding is the major source of support for organizations most besieged by an increased demand for services. By the end of the States fiscal year 2010, its backlog of unpaid bills totaled nearly $5 billion. Among all 50 states, Illinois ranks first in the country for late payments, third for payments failing to cover the full cost of contracted services, and third for government changing contract terms mid-stream (Urban Institute, 2010, Human Service Nonprofits and Government Collaboration). In a Donors Forum survey, 46% of nonprofits reported payment delays in 2010up from 36% a year earlier. By December, 80% were still owed back payments, ranging from less than $1,000 to several million dollars, with an average of more than $250,000 due to each provider (Donors Forum, Economic Outlook 2011).
Recommendations and Implications:

A Vital Force in Illinois
So that nonprofits can continue to be a vital force in our economy, they need continuing support from everyone in Illinoisthe general public, lawmakers, foundation and corporate leaders, nonprofit staff and board members, and other volunteers. Below is a list of some actions to take. Begin with the first sectioneveryoneand then find the additional category in which you fit. If you have any questions on these ideas, please contact Donors Forum at www.donorsforum.org, info@donorsforum.org, 312-578-0090, or toll free 888-578-0090.
Everyone
the general public, legislators and government leaders, staff and board members of nonprofits and grantmakers Volunteer, join a board, and spread the word about the value of nonprofit organizations. Many people dont understand the critical role nonprofits play in our communities, the challenges they face in funding, or the important ways in which they strengthen Illinois economy. Become part of an organization in your community. Find volunteer opportunities at sites such as www.onegoodeedchicago.org, www.volunteermatch.org, and www.idealist.org. Lend a few hours a month or a few hours a week. Spread the word about its work. Make sure business, government, and other civic leaders understand the important work of your favorite nonprofittake them on a tour. Donate more. Even nonprofits that receive grants from corporations and foundations need your support. In fact, 83 percent of the charitable contributions nonprofits receive are from individuals (GivingUSA Foundation, Giving USA 2010). Support your favorite organizations or do research to find organizations that match your interests and passions. Involve the family, and teach children about the satisfaction of giving. Use resources such as www.Guidestar.org and the Illinois Attorney Generals website (http://bit.ly.DFgivingAG) for more on wise giving and choosing charities. Engage with Donors Forums public policy work. Join with Donors Forum as we work to: Preserve and expand policies that encourage charitable giving; Support an active advocacy role for the philanthropic and nonprofit communities; Support effective, accountable, and transparent governance and management policies; Promote efforts to secure adequate public resources and achieve equitable fiscal policies and practices for vital programs and services; and Promote efforts to ensure nonprofits have adequate capacity to effectively fulfill their missions. Find more at www.donorsforum.org/policy. Keep up to date with the best resources available to strengthen your favorite nonprofits by staying connected with Donors Forum. Subscribe to the monthly e-newsletter Nonprofits Now for updates on affordable and authoritative workshops, events, and other resources on fundraising, nonprofit management, governance, and more. Subscribe to the monthly e-newsletter Policy Update and to occasional Policy Alerts. They offer the latest news on public policy issues affecting Illinois nonprofits and how you can take action to support these nonprofitsand the people and communities they serve. To subscribe, send an email to info@donorsforum.org and mention one or both newsletters, or sign up quickly and easily online at www.donorsforum.org/4help.
Recommendations and Implications: A Vital Force in Illinois
Legislators & Government Leaders

local, state, and federal legislators; other government leaders Endorse and follow the practices in Donors Forums Fair and Accountable: Partnership Principles for a Sustainable Human Services System. This seminal document recommends practices that should be followed when the City of Chicago and State of Illinois contract with nonprofits to provide human services. The practicessome of which are also listed beloware designed to help ensure that Illinois residents have access to high-quality, cost-effective human services that meet their needs. Go to www.donorsforum.org/goodpartners to learn more and sign on. Support best practices in State budgeting. Though Illinois current fiscal problems are daunting and require politically difficult decisions, solutions that create a financial system that is stable, efficient, accountable, measurable, and fair should be supported. Moving from expense-based budgeting to revenue-based budgeting, for instance, would allow the State to create budgets based on available revenue, rather than deficits, which force the State to rely on one-time, short-term funding. Meet your obligations. By ignoring its obligations to unpaid vendors, the State risks carrying the growing $6 billion in unpaid bills from fiscal year to fiscal year, adding to Illinois crippling debt. Legislative solutions (e.g., SB 3) will help the State meet its immediate responsibility to unpaid vendors and allow Illinois to move the nonprofit sector toward long-term fiscal stability. Enact solutions that address service delivery deficiencies. Illinois leads the country in bad contracting practices and its human services delivery system is inefficient, redundant, and often burdensome to nonprofits. Be informed of, and support, the work toward eliminating costly inefficiencies and redundancies in human service provision (e.g., HB 5124).
Nonprofits
staff and board members Endorse and follow the practices in Donors Forums Fair and Accountable: Partnership Principles for a Sustainable Human Services System. This seminal document recommends practices that should be followed when the City of Chicago and State of Illinois contract with nonprofits to provide human services. The practicessome of which are also listed beloware designed to help ensure that Illinois residents have access to high-quality, cost-effective human services that meet their needs. Go to www.donorsforum.org/goodpartners to learn more and sign on. Understand and comply with legal and fiduciary requirements. Use Illinois Nonprofit Principles and Best Practices as a guide to good governance, management, and financial practices. This and other resources are available at www.donorsforum.org to help nonprofits adopt best practices in oversight as well as day-to-day operations. Recent developments that merit special attention include revisions to the requirements for IRS Form 990. Maintain financial benchmarks as an ongoing policy. In order to maintain financial health, a nonprofit must continually review its fiscal policies and financial plan; this is a shared responsibility of board members and staff. Likewise, as the State makes moves toward performance-based budgeting, nonprofits should take the time to anticipate establishing programmatic benchmarks, as well. Invest in infrastructure and capacity building for a range of needs, such as information technology, specialized staff (including development directors), and board and staff development. Collect the right data and ensure appropriate levels of funding for acquiring and maintaining information technology. Collecting the right data will tell a story that leads to better financial management decisions internally. Technology supports the internal capacity to collect and use financial and service data. Engage in active and appropriate oversight. There is no substitute for the oversight of a critical group of volunteers who care about the mission and choose to invest their time and talents in nonprofit charitable activities. Nonprofits should conduct regular analyses of their boards and governance practices, such as a board self assessment. Boards should regularly review the performance and compensation of the chief executive, who should manage staff performance reviews and the compensation-setting process. Engage with Donors Forums public policy work and advocate on behalf of the sector. Join with Donors Forum to communicate the contributions and impact of the nonprofit sector, and become versed in current policy debates that impact the sector as a whole, including Budgeting for Results (BFR), SB 3 (debt restructuring), and HB 5124 implementation (streamlined auditing). Find more at www.donorsforum.org/policy.
Grantmakers
corporations, foundations, and other funders Understand and comply with legal and fiduciary requirements. Use Illinois Nonprofit Principles and Best Practices as a guide to good governance, management, and financial practices. This and other resources are available at www.donorsforum.org to help nonprofits adopt best practices in oversight as well as day-to-day operations. Recent developments that merit special attention include revisions to the requirements for IRS Form 990. Make general operating support a priority. Financial health is built over time through careful investments in infrastructure, and nonprofits need support from funders in these efforts. General operating support translates into capacity building for a range of needs such as information technology, specialized staff (including development directors), and board and staff development. Recognize that all projects require administration and oversight. Fully support necessary administrative expenses when funding projects and programs. Streamline the grant and sponsorship application and reporting process to minimize the amount of time, effort, and financial resources nonprofits expend to secure support. This will provide nonprofits with more resources to fulfill their missions. Recognize the importance of governance in supporting the financial health of nonprofits. Funders should target funding to improve nonprofit governance such as funding for board training, board self assessments, and high-quality strategic planning that conforms with the guidelines in Illinois Nonprofit Principles and Best Practices. This commitment will strengthen the sector overall. Endorse Donors Forums Fair and Accountable: Partnership Principles for a Sustainable Human Services System. This seminal document recommends practices that should be followed when the City of Chicago and State of Illinois contract with nonprofits to provide human services. The practices are designed to help ensure that Illinois residents have access to high-quality, cost-effective human services that meet their needs. Go to www.donorsforum.org/goodpartners to learn more and sign on. Engage with Donors Forums public policy work and advocate on behalf of the sector. Join with Donors Forum to communicate the contributions and impact of the nonprofit sector, and become versed in current policy debates that impact the sector as a whole, including Budgeting for Outcomes (BFO), SB 3 (debt restructuring), and HB 5124 implementation (streamlined auditing). (Private foundations should check with their attorneys on lobbying restrictions.) Find more at www.donorsforum.org/policy.
Importance of the Nonprofit Sector in Illinois

The nonprofit sector is a vital force in the economy of Illinois and in the well-being of its residents. Nonprofit organizations are resources for everyone who lives in Illinois and they are building blocks for every communityrural, suburban, and urbanacross the state. The broad and diverse programs and services of Illinois nonprofits address virtually every facet of human experience: They further research to cure disease, they enrich our spirits with art and architecture, they provide after-school programs for our kids, and they give job training to friends who have lost their jobs. Many nonprofits perform critical life-saving functions, ensuring that the environment is safe, increasing national security, and providing medical care, disaster relief, and refuge from family violence. In short, nonprofits provide essential services that enhance quality of life for all Illinois residents and contribute to their safety and survival. The sheer size of the sector makes it a major source of employment and economy-stimulating spending. On all countsnumber of organizations, number of employees, annual expenditures on payroll and other operating expenses, and size of population servedthe sector is a significant contributor to the economy of Illinois.
I. DEFINING THE ILLINOIS NONPROFIT SECTOR
Sector Size and Composition

In 2009, Illinois had 61,700 registered nonprofit organizations. Of these, registered 501(c)(3) public charities made up the largest share 58% of the total, representing some 39,000 organizations (Figure 1).1 Of Illinois registered nonprofits, 22,550 (34% of the total) were special interest, membership, and mutual benefits groups with other 501(c) designationsfor example, 501(c)(4) political organizations, 501(c)(5) labor unions, 501(c)(6) business leagues and trade associations, 501(c)(7) fraternities and sororities, 501(c)(8) voluntary employee associations, 501(c)(15) insurance associations, 501(c)(1) and 501(c)(14) credit unions, and (501(c)(19) and 501(c)(23) veterans organizations.2
FIGURE 1
Distribution of Tax-Exempt Organizations in Illinois circa 2009 by 501(c) Designation
Size of Nonprofit Sector Rivals the States Largest Industries

Even when counting by the most conservative measurecounting Illinois 501(c) organizations which file an annual report with the IRS3only four of the states private sector industries comprised a larger number of organizations than reporting 501(c) organizations. Of these, only professional/technical services, with 50,782 business establishments, surpassed the nonprofit total by a significant margin.
Illinois Industries by Number of Business Establishments (2009) (in order of largest industry) 1. P rofessional/technical services: 50,762. 2. Construction: 39,365. 3. Retail: 37,565. 4. O ther services (personal, repair, membership): 36,725. 5. N onprofit sectors reporting public charity and other 501(c) organizations: 35,800 (including reporting religious organizations). 6. H ealth/social assistance: 28,211. 7. Accommodation (hotel/motel, food services): 25,694. 8. F inancial services (banking, investment, insurance): 21,705.
II. PROFILE OF ILLINOIS 501(c)(3) PUBLIC CHARITY ORGANIZATIONS

The best known types of nonprofits are those classified as Internal Revenue subsection 501(c)(3) public charities. These organizations are organized and operated exclusively for religious, charitable, scientific, educational, and other similar purposes, receive the bulk of their support from the public, and represent the public on their governing boards. These requirements distinguish public charities from 501(c)(3) private foundations, which are privately funded and managed.4 The types of services these organizations provide include health care, safety and rescue, and housing and hunger reliefservices that can make the difference between life and death for Illinois residents. While other types of tax-exempt organizations also perform important functions, public charities often perform critical services that have generally been deemed important for the public as a whole.
Breadth and Versatility of Functions Performed

Figure 2 displays the breakout of Illinois public charities circa 2009 by broad organizational purpose category. These categories are based on the 26 major categories identified in the National Taxonomy of Exempt Entities (NTEE), generally the most widely used nonprofit organization classification systems and initially developed by the National Center for Charitable Statistics (NCCS) for use by the IRS.5
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FIGURE 2
Registered Public Charities in Illinois circa 2009 by Broad Purpose Category
*Health category comprises NTEEs four health-related major categories: healthcare, mental health/crisis intervention, voluntary health organizations, and medical research. **Human Services category combines the food/nutrition; housing/shelter; employment; crime-related; public safety, disaster relief; youth development; sports, recreation; and human services agencies categories. ***Public Society Benefit category represents civic, philanthropic, public affairs/public service, research, and social advocacy organizations. Source: NCCS, IRS Business Master File, January 2010.
The major NTEE category representations among each of the broad categories are shown in Table 1 with further breakdowns by reporting vs. registered organizations. These provide a more detailed view of both the specific types of organizations in each category and the relative representation of very small organizations.
Key Characteristics of Public Charity Organizations

The Largest Category of Public Charity Organizations is Human Services
This category includes organizations engaged in services related to food and nutrition, housing and shelter, employment, crime prevention and public safety, disaster relief, youth development, sports and recreation, and many other services to Illinois residents.
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TABLE 1
501(c)(3) Public Charities in Illinois circa 2009: Distribution by Major NTEE Category*
Registered Filing 990s
No. % Total % Regstrd
Major Category(ies) in order of NTEE Code A. B. Arts, Culture, Humanities (3rd Largest) Performing arts Visual arts; humanities; publishing, media Museums, cultural centers Historic sites, historical societies Education (2nd Largest) PK, elementary, secondary schools 4-year colleges, universities Educational services, remedial/other programs Student services, scholarships, booster clubs Student, alumni, parent-teacher groups
No.
% Total
3,832 1,340 415 714 822 5,981 696 133 442 1,395 1,756 97 1,070 361 49 372 56 3,688 1,685 250 201 257 194 786 986 231 558 303 88 324 361 965 345 182 127 284 3,776 812
10% 35% 11% 19% 21% 15% 12% 2% 7% 23% 29% 2% 3% 34% 5% 35% 5% 9% 46% 15% 12% 15% 12% 21% 27% 6% 1% 54% 16% 1% 1% 2% 36% 19% 13% 1% 10% 2%
2,517 847 235 469 596 3,835 414 86 250 907 1,151 52 776 265 24 279 43 2,801 1,390 212 161 199 141 601 636 174 344 195 46 233 261 687 246 162 74 144 2,449 436
12% 34% 9% 19% 24% 18% 11% 2% 7% 24% 30% 1% 4% 34% 3% 36% 6% 13% 50% 15% 12% 14% 10% 21% 23% 6% 2% 57% 13% 1% 1% 3% 36% 24% 11% 1% 11% 2%
66% 63% 57% 66% 73% 64% 59% 65% 57% 65% 66% 54% 73% 73% 49% 75% 77% 76% 82% 85% 80% 77% 73% 76% 65% 75% 62% 64% 52% 72% 72% 71% 71% 89% 58% 51% 65% 54%
Libraries C.-D. Environment, Animals (9th Largest) Environmental quality, design; resource conservation Wildlife preservation/rescue, wildlife sanctuaries Animal shelters, care services Zoos, aquariums; nature centers; botanical gardens
E. -H. Health (5th Largest) Health Care (Facilities, Services) Hospitals Nursing, rehabilitative facilities, home health care Health clinics, family planning, public health services Ancillary medical services, patient/family support Mental Health, Crisis Intervention, Substance Abuse Voluntary Health Groups (Disease-, Specialty-Related) Medical Research I. J. K. L. M. Crime-, Justice-Related (14th Largest) Crime, violence prevention; protective, legal services Inmate, ex-offender support services Vocational Training, Employment-Related Food, Nutrition, Agriculture Housing, Shelter (10th Largest) Affordable/subsidized, accessible housing Senior housing, retirement communities Homeless shelters, temporary housing Public Safety, Disaster Preparedness, Relief
N. Sports, Recreation (4th Largest) O. Youth Development (11th Largest)
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TABLE 1
501(c)(3) Public Charities in Illinois circa 2009: Distribution by Major NTEE Category*
Registered Filing 990s
No. 2,242 % Total 11% % Regstrd
Major Category(ies) in order of NTEE Code P . Q. R. S. T. U. V. X. Human Services Agencies (6th Largest) Multipurpose agencies; neighborhood centers Childrens/youth, family services Child day care services Residential, support services for the elderly , disabled Residential, support services for other populations International, Foreign Affairs (13th Largest) Civil Rights, Social Change Advocacy Community Improvement (7th Largest) Grantmaking, Giving Services (8th Largest) Scientific, Technology-Related Research Economic, Sociological, Humanities Research Religion, Spiritual Development (1st Largest) Religious congregations, places of worship, ministries Religious media, publishing Interfaith coalitions; alternative spiritual practice
No.
% Total
3,434 672 665 313 487 543 601 203 1,755 1,263 201 71 706 8,596 7,951 90 482 460 38,941
9% 20% 19% 9% 14% 16% 2% 1% 5% 3% 1% 0.2% 2% 22% 92% 1% 6% 1%
65% 52% 68% 68% 76% 66% 61% 64% 60% 70% 65% 51% 72% 15% 14% 70% 26% 50% 55% 5%
348 463 213 372 358

367 130 1,061 878 131 36 507 1,315
15.5% 21% 10% 17% 16%

2% 1% 5% 4% 1% 0% 2% 6%
W. Public Affairs, Public Services (12th Largest)
1,069 63 138
179
81% 10%
0.8%
Other; Unclassified/Unknown GRAND TOTAL
21,329
*For a full definition of the subcategories comprising each NTEE category, readers should refer to Appendix I. The percentages of the total displayed refer to the overall grand totals for registered organizations and for filing organizations. Source: National Center on Charitable Statistics, from IRS Business Master File (January 2010).
A Majority of Illinois Public Charities Have Assets Less Than $100,000

When non-reporting organizations are taken into account, the percentage of public charities reporting assets of more than $100,000 is reduced to 20%.6 This includes organizations that are either exempted from IRS reporting requirements, including religious organizations (22% of Illinois registered public charity total, of which 6% nevertheless voluntarily reported to the IRS), as well as organizations with annual receipts below $10,000; or organizations that had receipts below the previous exemption threshold of $25,000 and that had not yet complied with the IRS reporting mandates instituted for tax year 2008 (20% of the total).
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A Small Number of Large Organizations Control the Vast Majority of Public Charity Assets
As Figure 3 shows, only 4% of public charities have assets exceeding $10 million. Yet this tiny minority of Illinois public charities held the lions share (92%) of all public charity assets circa 2009.
Source: NCCS, IRS Business Master File (January 2010)
FIGURE 3
Distribution of Illinois Reporting Public Charities circa 2009 by Asset Range: Percentage of Total Organizations vs. Percentage of Total Assets
As might be expected, the organizations falling into the largest and smallest asset categories differ in a variety of ways; among them, in the populations they serve, their major funding sources, and their internal organizational resource needs for delivering the required services. Organizations most frequently found in the largest asset size categories are those that operate large housing, care-providing, and/or education and research facilities; require highly trained and specialized personnel to deliver the organizations services; and serve a large, unrestricted population and/or geographic market. Specific examples include Illinois-based branches of national or global multipurpose human services agencies such as the YMCA, YWCA, and The Salvation Army; dedicated housing development and supportive services providers serving major metropolitan areas or multiple communities throughout the state; and the states largest cultural institutions (e.g., Chicagos Field Museum of Natural History, Museum of Science and Industry, and John G. Shedd Aquarium). Additional examples include hospitals and universities, which also constitute the largest overall organizational categories by asset size. As a whole, these categories hold a particularly disproportionate share of their respective subsectors (health, education categories), as well as all Illinois public charity assetsin turn, a reflection of the large asset holdings of each categorys individual organizations. Specifically:7 hile Illinois 501(c)(3) hospitals represented 7% of organizations in the broad health category W circa 2009, their assets ($45.2 billion) made up 80% of the categorys asset total ($53.4 billion). As the single largest public charity subcategory by asset size, hospitals also made up 35% of all public charity assets in Illinois.
14
llinois private universities represented 2% of all education subsector organizations circa 2009, I but 83% of the subsectors total assets ($28.8 billion vs. $34.8 billion) and 24% of the state asset total. By contrast, the number of organizations in the combined parent-teacher group, alumni association, and student group subcategory (Table 1) represented 29% of Illinois education organizations, yet only 0.2% of the subsectors asset total.
Yet Small Organizations Provide Critical Services that are Otherwise Unavailable
One of the most important functions that public charities perform is to deliver critical life-saving or life-transforming services that are not cost effective for public agencies or commercial organizations to provide. Some of the sectors smallest organizations provide this type of service, which may be needed only on a sporadic basis (such as disaster relief) or by individuals with minimal financial resources (such as those needing emergency shelters, children, and youth). Some examples of these critical services include: rograms targeted to low-income and/or at-risk youth, such as youth development, youth clubs/ P centers, and youth violence-prevention programs. Temporary housing providers; in particular, halfway houses for ex-offenders. escue squads (community-focused volunteer-staffed organizations, such as volunteer fire R fighters and missing-person search groups). eighborhood centers providing day care, employment assistance, and other types of social N services. Food assistance programs such as soup kitchens and Meals on Wheels. As many as 1,600 of such organizations in Illinois are not even registered with the IRS; while the Illinois Human Services Commission counts nearly 2,000 food pantries, soup kitchens, and shelters among the states providers,8 the number of comparable registered providers circa 2009 was only 319.9
Sectors Smallest Organizations Also Stimulate Volunteer and Community Member Involvement
Shared characteristics of the sectors smallest organizations are their local focus and community or voluntary membership basis. Such organizations make up the bulk of the three largest public charity subsectors: eligion, the largest subsector by number of registered organizations, with 22% of the total. R The vast majority of organizations in this category (92%) are local, community-based religious congregations, ministries, and places of worshipinstitutions with a longstanding history of community involvement and a presence in virtually every community in the state. ducation, the second-largest subsector (15% of all public charities in the state). Nearly one-half E of education subsector organizations (47%) provide education services and volunteer support to the states 4,528 public elementary and secondary schools,10 all local or community based. Of these, volunteer-based parent-teacher groups make up the largest share, representing 19% of the category total. rts, culture, humanities, the third-largest subsector (10%). Performing arts (35%) and historical A preservation (21%) organizations make up over one-half of the subsector total (56%)organizations that, again, are most frequently locally focused (e.g., local historical societies) and/or community based (e.g., community theaters).11
15
Who Benefits from Illinois Public Charity Offerings?

Because nonprofits are such an integral part of everyday life, its likely that most Illinois residents have directly benefited from their offerings at one time or another. Anyone who has been treated in a nonprofit medical facility (80% of all hospitals in Illinois are nonprofits); has engaged in fitness or recreational activities at their local Y; belongs to a church, synagogue, or another religious community; adopted a pet from an animal shelter; or attended a nonprofit theater performance or museum exhibit, has benefited from the services or offerings of a nonprofit. Illinois public charities have an even wider impact when indirect benefits are taken into account. For example, every resident of the state benefits when natural habitats are preserved, when crime rates are lowered, when people have access to a wide array of arts and cultural offerings, and when there is a safety net of service providers in case of medical emergency, natural disaster, or financial crisis. Not only do public charities serve the residents of Illinois, they also add to the states value by attracting people from outside the state. Among the nonprofits with a substantial out-of-state market are the states leading private colleges and universities and its arts and cultural institutions. For example, of those enrolled in the freshman class of 2011 at the University of Chicago, only about one-third (34%) are from Illinois and other states in the Midwest, and of the remaining two-thirds, 51% are from other regions of the U.S., with 13% from outside the U.S. Similarly, Chicago-based arts and cultural institutions have helped to make Illinois a travel destination for many millions of out-of-state visitors. According to 2008 statistical information from the Chicago Office of Tourism, Illinois had 67.8 million domestic leisure travel visitors in 2008, one-half of whom (32.4 million) visited Chicago. Chicago also had 1.34 million international visitors (69% of all international travelers to Illinois).
FIGURE 4
Domestic Leisure Travelers: Activities Engaged in at Travel Destination Chicago
Source: Chicago Office of Tourism, D.K. Shifflet & Associates, 2009
16
The contribution of Chicagos arts and cultural institutions in attracting these visitors is suggested by the following additional statistics: f Chicagos top ten tourism attractions (excluding sports and special events/festivals), O seven are cultural institutions, according to the Chicago Office of Tourism. f the 32.4 million domestic leisure travel visitors to Chicago in 2008, 26% visited a museum O or art exhibit (8.42 million), and 16% (5.18 million), attended a play, concert, or dance performance (Figure 4).
Populations Served by Illinois Public Charities (Selected Examples) *

Nonprofit hospitals in Illinois made 1.6 million patient admissions in 2008 and handled five million emergency room visits, according to Kaiser Family Foundation, Statehealthfacts.org. 500,000 people are enrolled in private nonprofit educational institutions in Illinois. llinois private pre-K-12 institutions had enrollments of 264,010 in school year 2007-2008, I says the National Center for Education Statistics.12 ccording to the Illinois Board of Education, enrollments in Illinois private four-year A colleges and universities totaled 231,378 in 2008-2009.13 Up to two in ten Illinoisans benefit from human services. Selected examples from Illinois Human Services Commissions June 2010 report, Human Services in Illinois: Community food banks serve more than 1.4 million Illinois residents per year. n fiscal year 2009, nonprofit domestic violence programs responded to 203,589 I hotline calls and delivered prevention/education services to nearly 544,000 local community members. About 166,200 individuals also received community-based mental health services. nglish as a second language, civics, and citizenship application assistance and E education are provided annually to more than 100,000 immigrants throughout Illinois. Chicagos cultural institutions attract millions of visitors every year. f Chicagos top ten visitor attractions in 2008, the third through sixth most popular O following top-ranked Navy Peer and number-two-ranked Millennium Parkwere cultural institutions: Lincoln Park Zoo, ranked number three with three million visitors, followed by the Shedd Aquarium (1.86 million visitors), Museum of Science and Industry (1.42 million visitors), The Art Institute of Chicago (1.4 million visitors), and The Field Museum (1.39 million visitors), according to the Chicago Office of Tourism.14
*For all sources cited here, see the Works and Major Data Sources Cited section of this report for more detailed source information.
17
FIGURE 5
Top Illinois Counties by Number of Registered Public Charities
Geographic Distribution of Illinois Public Charities

Consistent with their ubiquitous local community presence, public charities are found in all 102 of Illinois counties (see Appendix III for a detailed breakdown). As would also be expected, the distribution of public charities follows that of the states overall population, with the largest concentrations in the most heavily populated counties. The states largest county, Cook, also has the largest number of registered public charities, accounting for 44% of all Illinois public charities. These organizations additionally represent a disproportionate share of public charity assets, making up 61.5% of the states asset total.
Source: NCCS, Core Files Public Carities (circa 2008).
18
Cook Countys large population size is due to the presence of Chicago. By the same token, the counties with the second through fifth largest public charity distributions are among the Chicago areas six collar counties: Dupage (second most public charities in the state), Lake (third most), Will (fourth most), and Kane (fifth most) counties. In all, the greater Chicago metropolitan area accounts for 64% of the states registered public charitiesand 81% of total assets The top 15 counties by number of registered public charities are displayed in Figure 5, again illustrating the correspondence between number of public charities and population size. For example, the counties with the sixth through ninth largest registered public charity distributionsSangamon (sixth most public charities), Winnebago (seventh most), Madison (eighth most), and Peoria (ninth most)each encompass or border significantly sized urban communitiesrespectively, Springfield, Rockford, East St. Louis, and Peoria. These relationships are further confirmed by county population statistics. These are provided in Appendix III, along with a listing of each countys and each Illinois regions number of registered public charities and total assets, and their corresponding share of the total (total public charities in Illinois, the states total public charity assets).
III. THE NONPROFIT SECTORS CONTRIBUTION TO ILLINOIS ECONOMY

Nonprofit organizations provide direct support to Illinois economy through the hundreds of thousands of workers they employ and billions of dollars in spending on the goods and services required for maintaining operations. They also provide various forms of indirect support through the additional economic activity generated by employee, vendor, and client/patron spending. They also contribute to the economy through programs and services that create cost savings for the State; for example, reductions in incarceration rates and related costs as a result of successful youth violence prevention and support services for ex-offenders.
Illinois Nonprofit Sector: A Major Source of Employment

Size of Nonprofit Workforce
Illinois 501(c)(3) organizations that filed an annual form 990 statement in 200915 employed an estimated 483,492 workers in 200916, accounting for 10.2% of all private sector organization employees (approximately 4.74 million) and 8.7% of the states total workforce (5.55 million).17
19
Indeed, Illinois 2009 nonprofit workforce surpassed that of all 15 private sector industries except for the top three, including the second-ranked retail industry (596,146 workers) and the third-ranked ranked manufacturing industry (577,486 workers). As for the top-ranked health/social assistance industry, of the 683,952 workers this industry employed in 2009, nearly one-half (47%) were employed by nonprofits. This makes the health/social assistance industry both the largest employer of nonprofit workers and also highly reliant on the nonprofit sector for continued delivery of its critical life-saving services.
TABLE 2
Illinois 501(c)(3) Nonprofit Employment, 2009: Estimated Number of Employees by Private Sector Industry
Industry Total Nonprofit Sector Total Nonprofit % of Industry % of Nonprofit Employment
In Order by NAICS Code 551 INFORMATION Publishing, broadcast media, libraries 554 PROFESSIONAL, TECHNICAL SERVICES Scientific, sociological research; technical consulting; legal aid; animal care, landscaping services 561 EDUCATION 562 HEALTH, HUMAN WELFARE Outpatient, ambulatory care services Hospitals Nursing, residential care; assisted, senior living Social assistance/human services 571 ARTS, RECREATION, ENTERTAINMENT Performing arts; museums, historical sites, zoos, other related organizations; recreational clubs, athletics 581 OTHER SERVICES - MEMBERSHIP ORGANIZATIONS Religious, philanthropic, social advocacy, and selected civic, business, and social membership organizations ALL PRIVATE SECTOR EMPLOYMENT*
*Represents average workforce size over entire calendar year. Source of industry employment totals: Quarterly Census of Employment & Wages Illinois (2009).
106,660 347,339 134,259 219,100 233,807 133,976 97,070 77,118
2,090 7.398 107,907 15,556 201,074 46,346 61,542 9,948
2.0% 2.1% 80.4% 7.1% 86.0% 34.6% 63.4% 12.9%
0.4% 1.5% 22.3% 3.2% 41.6% 9.6% 12.7% 2.1%
81,078
31,620
39%
6.5%
4,737,920
483,492
10.2%
100.0%
Distribution of Nonprofit Workers by Industry

H ospitals (86.0%). Overall, hospitals are the largest source of nonprofit employment, due to the generally large size of hospital workforces (233,807 employees) and the large proportion of hospitals represented by nonprofits.18 In the health subsector, the hospitals category contrasts sharply with the nearly-as-large ambulatory care category (213,708 employees), of which only a small minority (7%) work for nonprofits. This reflects the categorys large share of private practices, which account for 63% of all ambulatory care employment (more than 180,000 jobs in total).
20
Education (80.4%). Like hospitals, the majority of organizations in the education industry are 501(c)(3) public charity nonprofits. These include the sectors largest employers, private universities and four-year colleges (with 63,833 employees in 2009 according to QCEW employment data for Illinois, a number representing 49% of the entire education workforce). Social assistance (63.4%) is made up of family, childrens, and other individual services agencies; emergency rescue/relief and food and housing assistance programs; vocational rehabilitation; and child day-care providers. Of these, child day-care providers employ the largest number of workers (27,76829% of the subsector total), but are also more likely to encompass non-tax-exempt employers than other social assistance providers (potentially up to two-thirds of the relevant total). Membership organizations (39.0%), a subsector of the other services, encompassing religious, grantmaking, social advocacy, civic, business/trade, and various other types of voluntary membership organizations. This subsector, while made up exclusively of nonprofits, includes both 501(c)(3) and other 501(c) organizations. Those with 501(c)(3) status are concentrated among the first three organization types, and are estimated to represent 73% of all 501(c)(3) employees in this subsector. Residential care, assisted living facilities (34.6%). Private sector providers in this health subsector category (which, according to NAICS definitions, include housing/related services for the elderly and developmentally disabled, but which the NTEE classifies under human services) represent a mix of nonprofit and for-profit organizations. Nonprofit representation is highest for mental health/substance abuse treatment facilities (more than 90%). For nursing care facilities, which represent 59% of the categorys workforce (78,413), nonprofit representation is 27%, according to the Illinois statistics presented in Kaiser Family Foundations statehealthfacts.org.19
FIGURE 6A
Percentage of Illinois Private Sector Industry Workers Employed by Nonprofits (2009)
21
Of the remaining categories with nonprofit employee representations, only one has a representation of more than one or two percentage points: A rts, recreation, and entertainment (12.9%). The majority (73%) of this subsectors nonprofit employees work for museums, historical sites, zoos/aquariums, and similar organizations. Of the remainder, 19% work for performing arts organizations, and 8% for recreational or sports-related facilities and programs.20 As for the categories with only minimal nonprofit worker representation, these include: rofessional/technical services (2.1%). A full 84% of nonprofit workers in this industry are P employed in scientific or social sciences/humanities research. Of the remainder, the largest proportion (14%) work for legal aid programs, while 2% are employed by 501(c)(3) veterinary care, horticultural landscaping, and technical consulting services providers. nformation (2.0%). The subsectors making up this industry include publishing, broadcast, motion I picture/sound recording, cable, telecommunications, data processing/internet services, and other information services subsectors. Nonprofit employees are found primarily in publishing (university/ other nonprofit presses), broadcast (public television and radio, religious broadcasting and other information services), and libraries and archives.
Composition of Total Nonprofit Workforce: Breakdown by Industry

Within the nonprofit workforce universe, the health subsector employs the largest proportion of all nonprofit workers (54.4%). Of these, 41.6% work for hospitals, reflecting both the large number of workers that hospitals employ, and the large number of hospitals with 501(c)(3) tax-exempt status (86% of all private sector hospitals).
FIGURE 6B
Percentage of Illinois Nonprofit Workers in each Employing Industry (2009)
22
The education subsector follows health as the second-largest employer of nonprofit workers (22.3%). Universities and four-year colleges are this subsectors largest employers, with 13.2% of the nonprofit sector workforcethe third-highest percentage of any of the listed categories, surpassing the social assistance subsector (12.7%) and the residential care category (9.6%). The social assistance subsector employs the third-largest share of the nonprofit workforce (12.7%). This subsector has a relatively high representation of nonprofit organizations. According to the Center for Tax and Budget Accountability (CBTA), about 75% of Illinois Human Services organizations are nonprofit.21 The fourth-largest employer of nonprofit workers is the membership organizations category (6.5%). As previously noted, this category comprises both 501(c)(3) and other 501(c) organizations. Those organization types that are exclusively 501(c)(3)religious, grantmaking, and social advocacy organizations22employ nearly one-third of all employees in this category (31.9%). While most civic, social, business/trade, and other types of membership organizations are not 501(c)(3) but some other type of tax-exempt organization, those that do have 501(c)(3) public charity status employ an additional 7% of membership organization category workers. Finally, the arts, recreation, and entertainment subsectorwith a total workforce of 77 ,118 (smaller than any of the preceding categories) and a 12.9% share of nonprofit workersis the fifth-largest nonprofit employer, accounting for 2.1% of all nonprofit workers.
Nonprofits Are a Major Source of Economy-Stimulating Spending

Billions of Dollars in Direct Spending
Expenditures of Illinois public charities that reported earnings and expenses to the IRS circa 2008 (the most recent tax year for which this data is publicly available) totaled more than $59.7 billion.23 This represents 9.4% of Illinois 2008 Gross State Product ($633.7 billion),24 surpassing the comparable percentages of economic output contributed by the financial services (9.2%), professional/technical services (9.1%), retail (5.5%), and construction (4.1%) industries, all but the two highest-contributing private sector industries, real estate (12.5%) and manufacturing (12.4%).25
Even More in Indirect Spendingthe Multiplier Effect

The nonprofit sectors economic impact extends beyond the dollar value of its spending: a key factor in identifying the true economic impact of sector spending is its multiplier effect. To illustrate, nonprofits payroll spending on employee wages is, in turn, spent on housing, household products and related expenses, personal consumption items, leisure/entertainment activities, and a host of other goods and services. This spending supports the makers and distributors of the purchased items, creating or sustaining jobs and spurring further market spending. In short, a spending cycle is created by the nonprofits initial expenditures that multiplies the value of every original dollar spent. The U.S. Bureau of Economic Analysis has identified individual multipliers for every major NAICS industry and for metropolitan and regional areas throughout the U.S.26 These measures have formed the basis of economic impact analyses for the arts, hospitals, private colleges/universities, and the green industry (in this case, focusing primarily on commercial industry job opportunities, but representing nonprofit organization policy goals/objectives and active involvement in planning and support activities for growing the industry). Specific results include:
23
Hospitals
Illinois community hospitals 2008 expenditures of $2.8 billion contributed $6.75 billion in additional business output to the state economy. This represents a multiplier effect of nearly $2.40 for every hospital dollar spent, according to the American Hospital Association.27
Private Four-Year Colleges and Universities

Illinois private four-year colleges and universities institutional, student, and visitor expenditures in 2009 topped $14 billion, supporting not only these institutions own workforces of approximately 63,000, but an additional 104,000 jobs throughout the state.28
Nonprofit Arts Organizations

ationally, nonprofit arts organization spent an estimated $63.1 billion in fiscal 2005, leveraging N an additional $103.1 billion on event-related spending by arts audiences, according to a study by Americans for the Arts.29 The $166.2 billion in total economic activity produced, which included spending on meals and refreshments, transportation, gifts/souvenirs, accommodations, and child care, supported 5.7 million full-time equivalent jobs. he Americans for the Arts study also found that non-local arts audiences spend twice as much as T local audiences on supplemental goods and services (an average of $40.19 vs. $19.53 per event). If these same spending levels can be assumed to apply to the Chicago area, this would mean that the approximately 8.42 million out-of-town visitors who patronize Chicagos cultural attractions every year generate an average of $338.4 million in additional economic activity.30
Green Industry
study by the University of Illinois-Chicago (UIC) Center for Urban Economic Development31 A projects that implementation of the Chicago Climate Change Action Plan, a joint public-private sector collaborative effort launched in September 2008, will create direct demand for several thousand jobs in building retrofits, renewable energy installation, and green infrastructure and indirect demand for additional types of jobs ranging from green construction trade workers to energy engineers. he UIC report also cites projections from other sources, including analyses for Chicago Metropolis T 2020 (now known as Metropolis Strategies) implying gains of up to 25,000 jobs throughout the Chicago metro region. potentially significant role for 501(c)(3) public charities is in the training and education arena. A As demand for specific types of job skills grows, so too will demand for training and education programs grow. Already, the Chicago Climate Change Action Plan has resulted in creation of a new employment initiative being carried out by 11 nonprofits. hrough expansion of the Citys Greencorps Chicago program, these nonprofits are engaged T in building capacity for sustained jobs in everything from home weatherization and household chemicals management to urban agriculture, with the goal of supporting jobs for the chronically underemployed and re-entry individuals, according to Chicago Climate Action Plans Progress Report 2008-2009.
24
O ther ways in which nonprofit organizations have been involved in implementing the Chicago Climate Change Action Plan include: Leadership of policy planning and research initiatives (e.g., by the Environmental Law and Policy Center in convening a Renewable Energy Working Group; by the Field Museum in conducting rapid ethnographic studies in neighborhoods throughout Chicago to identify community assets that can serve as springboards for climate action). roviding community-level energy efficiency education and assistance through the plans Energy P Action Network in working with 21 community-based organizations, the network aims to create energy efficient communities through bill payment assistance, weatherization services, and energy efficiency programs and rebates. For the nonprofits involved in these initiatives, the desired outcomes are the indirect benefits of improved air and water quality resulting from environmentally sustainable energy use, building construction, transportation, and other such practices. However, their participation does have the effect intended or notof increasing demand for their services, and hence their own growth. Indeed, the employment trend data presented in subsequent report sections reveals an increase in employment by environmental organizations, even during the worst of the recession.32
Indirect Economic Impacts of Illinois Public Charities

Support of Illinois Economy through Creation of Cost Savings
Another way in which Illinois nonprofits contribute to the states economy is through reducing or avoiding future service costs by providing more cost-effective community-based or preventative program alternatives. Specific examples and accomplishments include:33
Human Services Subsector
Cost Savings through Reductions in Incarceration Expenses Cost effectiveness of community-based substance abuse treatment programs: The majority of Illinois correctional system inmates have been convicted of substance abuse-related offenses. The cost of incarcerating a low-level drug crime offender for 120 days is more than $7 ,000, while re-routing that same person into a drug treatment program would cost less than $4,500. According to Human Services in Illinois,34 studies show that treatment-focused community supervision programs lower the recidivism rate by 16 percent and save the community up to 20 dollars for every one dollar invested.35 Cost effectiveness of vocational training/job placement support: Ex-offenders who are employed are three times less likely to return to prison than those who are not. The Human Services in Illinois36 report shows that support services designed to help ex-offenders secure employment significantly increase the chances that an employer will consider hiring a person with a criminal record.37 In addition, vocational training delivered to offenders while incarcerated results in a recidivism rate 20% lower than among offenders who did not receive such training. In all, investment in treatment and services for offenders and ex-offenders yields a return of up to seven dollars for each dollar spent.
25
Cost Savings through Reductions in Residential Care Expenses roviding special needs populations with service-enriched housing results in reduced spending P on crisis-driven interventions and other services that would otherwise need to be accessed. As quoted in the Human Services in Illinois report, a 2009 Heartland Alliance study found that, among a sample of 177 supportive housing residents, the total cost of services from pre- to post-supportive housing was reduced by 39%, yielding an annual savings rate of $2,414 per resident.38 Increased access to community mental health services can reduce more costly institutionalization rates. In FY09, spending on community mental health services for 175,000 people...totaled $390 million, while spending on the 15,000 nursing home [residents] with mental illness who do not require daily skilled nursing totaled at least $640 million. 39 Similar reductions in costs could also be made in the delivery of services to individuals with developmental disabilities: independent living options for this population cost half as much as state-operated developmental disabilities facilities. Cost Saving through Improved Education Outcomes According to the Human Services in Illinois report, Research links high-quality, early-childhood intervention programs to both school success and improved social-emotional outcomes for children. Leading economists...estimate that every dollar spent on high-quality early education saves society seven dollars in future costs for special education, delinquency, crime control, public assistance benefits, lost taxes, and other areas. 40
Environment Subsector
Energy Efficiency Policies and Associated Cost Savings The citizens advocacy group Environment Illinois was instrumental in helping to pass 2007 legislation requiring Illinois electric utilities...to help their customers save energyand by 2015...to meet 2% of their customers energy needs with energy efficiency rather than by selling more electricity. This program is projected to save Illinoisans more than $2 billion per year on energy costs41 when fully implemented. In 2009, Environment Illinois advocated to pass the residential energy efficient building code in Illinois. According to Environmental Illinois, A recent study commissioned by the Department of Energy estimated that through updating to the latest International Energy Conservation Code (IECC) standards, Illinois families would [each] save up to $472 per year in utility bills in new housing. Meanwhile, by 2020, Illinois will have saved an estimated 12.8 million tons of CO2 just from decreased power generation. 42 Notably, one of the Chicago Climate Change Action Plans five major strategies is to achieve energyefficient buildings. Specific goals outlined in the plan are to work with a range of government, nonprofit, and development partners to retrofit up to 400,000 units [or 40% of Chicagos residential housing stock] to result in potential greenhouse gas emission reductions of 1.44 MMTCO2e , as well as a return on investment for...energy efficiency improvements [ranging] from 12.5 percent to 30 percent. 43
26
Economic Value of Volunteer Contributions

Every year, Independent Sector reports an estimated dollar value of volunteer time based on the actual activities performed by volunteers and the wages that paid workers receive for these services, both on a nationwide and a state-by-state basis. In Illinois, the average value of volunteer services was $22.50 per hour in 2008.44 This figure is all the more impressive in light of Illinois total volume of volunteer activity: 2.6 million Illinois residents volunteer their time, contributing a yearly average of 414.1 million hours of service.45 This means thatat $22.50 per hourthese services have a dollar value of $9.3 billion.
Volunteer Support Essential to Smallest Human Services-Providing Public Charities
The organizations named earlier as among the sectors smallest, yet most vital to providing services not available from the public or commercial sectors, are also those most reliant on volunteer support. Key among these are organizationsmany faith-basedthat provide emergency food, shelter, and personal assistance services (transportation assistance, financial counseling), employment search support, and youth development programs/services such as mentoring and after-school tutoring.
Food Relief Programs are Particularly Reliant on Volunteers
It is noteworthy that, of the Greater Chicago Food Depositorys member network of more than 600 food pantries, soup kitchens, and shelters, 60% are staffed entirely by volunteers.46 The statewide percentage is likely to be even higher given the total number of total Illinois food relief programs not even registered with the IRS: nearly 1,600 of the 2,000 programs identified for the Illinois Human Services Commissions June 2010 profile report, or 80% of the total.47 Concomitantly, statistics related to volunteer activities reveal that in 2009, the second most popular volunteer activity among the nations 63.4 million volunteers was (after fundraising) collecting, preparing, distributing, or serving foodactivities engaged in by 23.5% of the total, or 14.9 million U.S. residents.48 This in turn is suggestive of high demand for this type of support, as volunteer activities are generally focused on existing programs that seek and ask for volunteer participation.
27
Threats to the Nonprofit Sector

The 2008 economic downturn that has affected virtually every U.S. business and household has also taken its toll on Illinois nonprofit sector. The impacts on households have ranged from reductions in the value of 401(k) and personal savings to job layoffs and home losses due to mortgage foreclosure (affecting one out of every 371 homes in Illinois, the ninth highest mortgage foreclosure rate in the U.S.).49 These trends have increased demand for nonprofit organizations services at the same time as the underlying financial market causes have reduced nonprofits service delivery capacities. In short, the recession has exacted costs in the economic well-being of both nonprofit employees and the beneficiaries of nonprofit organizations.
I. IMPACTS OF THE RECESSION ON THE NONPROFIT SECTOR
Aftermath of the October 2008 Market Crash

The nations deepest recession since the Great Depression of the 1930s had its most severe impacts in the aftermath of the October 2008 market crash, depressing financial earnings and employment levels throughout the entire following year. The effects on the nonprofit sector have been documented in numerous nonprofit organization surveys. To cite one example, the Nonprofit Finance Funds 2010 State of the Nonprofit Sector Survey found that 68% of its 1,315 respondents had operating reserves of only three months or less, and that 36% had finished fiscal year 2009 with an operating deficit. In addition, 48% had frozen hiring and salaries, 35% had made staff or salary cutbacks, and about one-quarter had instituted reduced staff hours (26%) or made cutbacks in staff benefits (25%).50
Steep Declines in Nonprofit Revenues throughout Much of 2009

Reductions in nonprofits operating capacities reflect steep declines in 2009 revenues from virtually all nonprofits major funding sources. However, the declines were greater from some sources than others. In Donors Forums Economic Outlook 2010 survey, the nonprofits surveyed experienced the largest declines in investment and endowment income, followed by State government, foundation, and corporate funding support. Variations in the declines from different funding sources, in turn, have had varying impacts on the affected nonprofits. Endowment income, for example, plays a particularly significant role for private colleges and universities and museums. The financial losses suffered by educational institutions as a result of the recession are documented in the National Association of College and University Business Officers 2009 NACUBOCommonfund Study of Endowments: among the 842 U.S. colleges, universities, and supporting foundations participating in this study, the average return on endowment investments in fiscal year 2009 was -18.7%.
28
Similarly, an April 2009 article in The Art Newspaper cites losses of $800 million for New Yorks Metropolitan Museum of Art and $1.5 billion for the J. Paul Getty Trust in Los Angeles.51 Closer to home, the Art Institute of Chicago reported that, after six straight years of positive returns, our pool endowment [funds] returned -23.6% for the year ending June 30, 2009. 52 Notably, among both types of institutions, the losses were especially severe for the most generously endowed. In Illinois, such institutions include Northwestern University and the University of Chicago, with, respectively, the seventh and eleventh largest endowments in the U.S. by 2009 market value; as well as the Chicago areas leading art, natural history, and science museums, according to NACUBOs Commonfund Study of Endowments.53 As for 2009 declines in non-federal government funding, the factors that determine how greatly nonprofit funding recipients are affected by the declines include the extent of the nonprofits reliance on this source and the depth of the funding cuts themselves. Thus, while arts organizations rely comparatively little on State government funding, the severity of the budget cuts for the States arts funding agency, the Illinois Arts Councilmore than halving the agencys budget in the last three budget cycleshas seriously limited the number and size of grants available for community-based arts organizations and individual artists.54 Conversely, for nonprofits in the human services sector, State funding contributes the largest single share of overall support; thus, depending on the areas targeted for funding cutbacks, even a relatively small reduction can have a significant impact on the recipient organizations.
From the Illinois Arts Councils Fiscal Year 2009 Annual Report: As the states fiscal crisis has worsened, the Illinois Arts Council budget has plummeted from $19.8 million in FY07 (90% of which was awarded as grants) to $7.5 million in FY10... The average operating support grant has fallen from $12,248 in FY07 to a projected $4,684 in FY10. Given the continual decline of state revenues, this may well be the harbinger of more cuts to come before the end of FY10... Compounding the impact of these budget cuts...local private (and public) funding has slumped and philanthropic giving for arts is falling concurrently. As the recession [continues], artists and arts organizations report that corporate support is shifting to shore up the social services safety net. Moreover, what scarce funds do remain...are increasingly targeted specifically to arts education programs, making it harder than ever for even the most valued arts institutions, community arts organizations, and individual artists to stay afloat.
Impact of the Illinois State Budget Crisis on Nonprofits

In the aftermath of the 2008 market crash when business revenues, asset values, and consumer earnings were plummeting most rapidly, State budget deficits were likewise climbing to unprecedented levels. This reflects inherent structural deficits in the budgets themselves, echoing the reliance on debt characterizing consumer markets, and the exacerbating impact of the recession on tax revenues. According to the Center on Budget and Policy Priorities:
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The worst recession since the 1930s has caused the steepest decline in state tax receipts on record. State tax revenues were 8.4 percent lower in the 2009 fiscal year than in 2008, and an additional 3.1 percent lower in 2010, while the need for state-funded services did not decline. As a result, even after making very deep spending cuts over the last two years, states continue to face large budget gaps. 55 In Illinois, fiscal year (FY) 2010 tax revenues showed declines of -7.7% for individual income tax, -20.5% for corporate income tax, and -6.09% for sales tax receipts, contributing to a year-end budget shortfall of roughly $13 million. And, concomitant with continuing rises in the budget deficit, the State has increasingly relied on delays in payment for contracted services as a spending avoidance mechanism. This resulted in a nearly $2 billion increase in end-of-year payables between FY09 and FY10up from $2.79 billion at the end of FY09 to a backlog of unpaid bills and fund transfers totaling $4.72 billion in June 2010.56 A breakdown of the FY10 backlog published by Voices for Illinois Children provides some insight into the extent of the impact on the Illinois nonprofit sector. By year-end, the State owed $1.47 billion to public school districts, $751 million to healthcare providers, $777 million to human services agencies, and more than $2 billion to local governments and other nonprofit subsectors. More significantly, these de facto budget cuts have serious consequences for the affected organizations operating capacities, having already caused staff layoffs, service reductions, and elimination of state-funded services in many communities. 57
Illinois State Contracting Practices Are the Worst in the Nation
This assessment by Voices for Illinois Children is corroborated by surveys of the sector. Of particular note is the Urban Institute study on unfair government contracting practices released in October 2010, conducted with a nationwide sample of 2,500 human services organizations. The study found that, of all 50 states, Illinois had the worst record for on-time service contract payments. Illinois also had the highest percentage of human services agencies forced to borrow funds or increase their lines of credit as a result of delayed State payment (42%) and was one of three states with the highest percentages of agencies forced to cut staff salaries (around 60%).
One Year Out from 2009 Revenue Declines: Continuing Challenges for Illinois Nonprofit Sector
Although the recession was declared officially ended by the second half of calendar year 2010, Donors Forums Economic Outlook 2011 survey, conducted in November and December 2010, found virtually no improvement in nonprofits cash position: six in ten reported having cash reserves of only three months or less (61%)nearly the same percentage as a year earlier (63%). Roughly the same proportions in the 2010 and 2009 surveys also reported delaying vendor payments (aboutd three in ten respondents) and taking out a loan or a new line of credit (around two in ten).
Worsening State Budget Crisis a Key Factor in Nonprofits Continuing Challenges

This continued lack of adequate operating capacities reflects the ongoing Illinois State budget crisis, with an even larger overall deficit than at the end of FY10 and a still-increasing backlog of unpaid bills. Of the funding sources relied on by the Economic Outlook 2011 nonprofit respondents, all but one were most likely to yield increased or steady funding levelsthe one exception being State government, for which 50% of respondents reported declines in 2010 funding support.
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The Economic Outlook 2011 findings also point to delays in State service contract payments as the chief culprit in the funding declines reported by respondents. Of all the nonprofits surveyed, 46% reported delays in State paymentsan increase from 36% one year earlier. In addition, 80% were still owed FY10 payments in December 2010, ranging from less than $1,000 to several million dollars, with an average of over $250,000 in payments due.
Nonprofits Challenges Exacerbated by Ongoing Increases in Service Demand

At the same time as nonprofits have faced budget limitations, they have experienced ongoing increases in service demand. In Donors Forums 2009 Economic Outlook survey, the percentage of nonprofits reporting increased demand had surged to 67% from only 11% the year priora nearly six-fold increase. Yet this percentage continued to rise in 2010, climbing to 78% of the nonprofits surveyed.
Nonprofits in the Human Services Sector are the Most Dramatically Impacted
As the organizations most likely to depend on State funding as their primary source of support, human services agencies are the most likely to be negatively impacted by declines in funding levelsincluding the declines caused by delayed State reimbursements. This trend has been documented in a number of different sources and is affirmed by Economic Outlook 2011 findings showing that one-half of human services agency respondents had experienced payment delays, compared to roughly three or four in ten of respondents in the arts, health care, and education subsectors. Furthermore, human services agencies are also the likeliest to experience increases in service demand, as these increases are the result of the recessions impact on consumer economic security: unemployment, mortgage foreclosures, loss of insurance, and similar trends have affected a rising number of consumers, consumers have increasingly turned to the nonprofit sector for economic relief and social assistance services.
Increased Demand for Economic Relief and Social Assistance Services: Selected Examples
8 8% of the Greater Chicago Food Depositorys network members reported seeing more clients than in 2006. Nearly 29% also reported turning clients away in the past year (Hunger in America 2010: A Report on Emergency Food Distribution in Cook County). 6 1 homelessness services agencies surveyed by the Chicago Alliance to End Homelessness reported turning away 1,292 clients in January 2010 due to FY10 state budget cutsa number representing 9% of all clients served (13,720) (A Devastating Impact: How Budget Cuts and Delayed Payments Will Increase Homelessness in Illinois).
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II. EMPLOYMENT TRENDS IN THE NONPROFIT SECTOR

One of the most devastating and most lingering effects of the economic downturn has been an increase in unemployment. The State of Illinois reports that Illinois unemployment rate had reached 10.9% by the end of 2009,58 well above the national rate of 9.3%.59
Aftermath of Late 2008 Market Crash

Nonprofit Sector as a Counter-Cyclical Force in the Economy
Quarterly Census of Employment & Wages (QCEW)60 2009 findings for Illinois would appear to affirm the assertions of Johns Hopkins Listening Post Project researchers who describe the nonprofit sector as a counter-cyclical force in the economy. 61 Compared to the states other private sector industries, those with the largest representations of nonprofit workers were comparatively less negatively impacted by the recession ensuing from the 2008 market crash.
FIGURE 7
Employment Trends in Various Industries (with asterisks [*] denoting those with the largest concentration of nonprofit workers)
Source: Quarterly Census of Employment & Wages, Illinois, 20062009 (U.S. Bureau of Labor Statistics website).
*The Other Services industry encompasses both personal services and the membership organizations category, comprising philanthropic, social advocacy, religious, and other membership groups; virtually all are 501(c)(3) or other 501(c) nonprofits.
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These trends are illustrated in Figure 7, which show some growth in employment for both the health/ social assistance industry and the education industry between December 2008 and December 2009: the health/social assistance industrys workforce grew from 674,200 to 683,800 (growth of 1.4%), while education grew from 130,400 to 134,300 workers (growth of nearly 3.0%). By contrast, virtually all other major private sector industries experienced negative growth during this time period. Most striking are the declines in the manufacturing industry, dropping from the largest industry in 2007 to second largest by the last quarter of 2008 and, finallyduring the market crash aftershock period in early 2009to third largest, surpassed by both the health/social assistance and retail industries.
FIGURE 8
Breakdown of Private Sector Industries Encompassing Nonprofit Employers Reveals Growth in Employment in Some Subsectors, Declines in Others
Source: Quarterly Census of Employment & Wages, Illinois, 20062009 (U.S. Bureau of Labor Statistics website).
Nonprofit Sectors Pattern of Growth Less Clear When Broken Down by Subsector
In contrast to Figure 7, Figure 8 displays the individual subsectors that make up the broad industry sectors in which nonprofit workers are represented. These more detailed breakdowns reveal subsectors and subsector categories made up of nonprofits in which 2009 employment trends were negative rather than positive.
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Health/Social Assistance Industry Subsectors with Largest Shares of Nonprofit Workers Experienced Slight Declines in Employment
Despite the overall growth in health/social assistance industry jobs during 2009, two of the industrys subsectors experienced slight declines in employment. These include the hospitals subsector, in which employment dropped by -.026% (Figure 8), and while this represents only a fraction of the entire hospital workforce, it still accounts for hundreds of jobs. Furthermore, the bulk of jobs affected were with nonprofit institutions, as these employ 86% of all private sector hospital workers. The other industry subsector that experienced slight employment declines was social assistance (Figure 8)also the only subsector other than hospitals in which the majority of employees work for nonprofits (63.4%). By contrast, growth was positive in the two subsectors dominated by for-profit organizations: The nursing, residential care subsector, in which about one-third (34.6%) of the workforce is employed by nonprofits, grew by 3% from December 2008 to December 2009. rowth was even greater in the ambulatory care subsector (3.4%) and indeed represented the G highest growth rate of any industry category, yet the percentage of this categorys workers who were employed by nonprofits was only 7 .1%.
Declines in Nonprofit Employment Were Most Precipitous within the Arts, Entertainment, and Recreation Subsector
Overall trends for Illinois arts, entertainment, and recreation subsector (Figure 8) show declines of 3.8% between December 2008 and December 2009down from 77 ,171 to 69,137 workers. This reflects especially steep declines among performing arts organizations, with a drop of 8.1% in workers employed. Also reflected is a 2.0% decline among museums, historical sites, zoos/aquariums, and other similar organizations, which because of the generally large size of these organizations, affects a relatively large overall number of jobs.62
Overall Membership Organizations Subsector Employment Also Declinedbut with Variations Between the Subsectors 501(c)(3) and Other 501(c) Organizations
The one remaining subsector with a significant representation of nonprofit workers, the membership organizations subsector,63 experienced a 1% decline in employment between December 2008 and December 2009, dropping from 81,706 to 80,858 workers (Figure 8). However, this reflects declines among only certain types of organizations, most of them with other 501(c) designationse.g., business leagues (-3.7%), labor unions (-2.3%), and civic and social membership groups such as womens leagues and fraternities/sororities (-1.6%). Conversely, the 501(c)(3) public charities making up the subsector showed slight growth in employment. This includes the subsectors environmental, human rights, and other social advocacy groups (0.9%), religious organizations (3.7%), and philanthropic organizations (2.4%).64
More Recent Employment Trends

More recent employment trends based on U.S. Bureau of Labor Statistics monthly tracking data are shown in Figure 9. These indicate that private sector hospital employment increased between December 2009 and June 2010, surpassing employment levels the previous June, while growth in social assistance employment remained flat, and in the arts, recreation, and entertainment subsector showed continuing declines.
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FIGURE 9
Number of Illinois Employees (000s) by Subsector: Seven-Year Trends
Source: U.S. Bureau of Labor Statistics, State Employment & Wages Data.
The declines in the arts, recreation, and entertainment subsector reflect cutbacks in performing arts organization staff, as well as in the staff of large, heavily endowed museums, such as Chicagos Field Museum and Art Institute.65 The flat growth exhibited by the social assistance subsector is consistent with the dual impacts of increased demand for social services, creating a concomitant demand for increased staffing, yet at the same time reduced cash flow due to delayed State government payments and other State funding cutbacks. Finally, increased employment by hospitals, although overall a positive sign, does not represent uniform growth among this health subsector category. After hitting an all-time peak in July 2009, hospital layoffs began to decline and, from December 2009 to January 2010, hospitals nationwide added 5,000 jobs, according to health finance newsletter Fierce HealthFinance.com.66 However, the newsletter also noted that employment in the nations hospitals continues to suffer a case of the haves and have-nots, with some struggling hospitals [still] making last-ditch efforts to balance the books by cutting staff. Examples of the latter include large urban teaching hospitals such as the University of Chicago Medical Center and Northwestern Memorial Hospital, which as recently as August 2010 announced a mass layoff of 115 workers.67
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Reasons for Continued Concern

The budget shortfalls still plaguing some of Illinois largest nonprofit employerse.g., major museums and in particular hospitalsare alone a reason for concern. However, several other system-wide and macro-level issues may pose a still greater threat.
Quality and Sustainability
Payroll Reduction Strategies Used as Alternatives to Layoffs
Johns Hopkins Listening Post Project, April 2010 Survey Findings
Continuing increases in demand for services are causing many nonprofits to respond by stretching their current staffing resources and increasing their use of volunteers or temporary staff. These strategies pose the risk of losses in service quality, with a domino effect of consequences for the organizations reputation and credibility with institutional funders. Other responses to ongoing or increased demand for services with limited financial resources include hiring for new positions at more junior levels and lower pay rates than required for previous (now eliminated) positions, or on a contract basis, with no paid benefits. Again, these changes risk leading to declines in service quality, either directly or through decreased organizational efficiency. It is also important to recognize that, while showing up in U.S. Bureau of Labor Statistics as increases in employment, such growth does not signal improvements in financial health, but instead the use of stop-gap measures that over the long term may not be sustainable.
Ongoing Illinois State Budget Crisis
One in three (29%) of all nonprofits surveyed had eliminated staff positions in the past 6 months, while 3 6% had postponed filling vacant positions. 3 9% had implemented a salary freeze and 23% had reduced or eliminated staff benefits. In addition, however: 4 9% had redefined job descriptions to add responsibilities previously handled by other positions and/or to accommodate increased demand for services. 3 4% reported increased use of volunteers, and 29%, of contract or part-time workers. T hese practices were most common among arts organizations, reported by over one half compared to less than one-third of human services agencies. Increased use of contract and volunteer services were particularly common strategies among arts organizations, used by one-half or more, compared to less than onethird of human services agencies.
Source: Recession Puts Pressure on Nonprofit Jobs, Johns Hopkins Center for Civil Society Studies, Listening Post Project Communiqu No. 19, 2010.
The worsening situation is described in the October 2010 issue of Illinois State Comptrollers CQ Quarterly: As long as fiscal year 2010 payments remain a priority, current year spending will continue to be backlogged and, absent any other changes, payment delays will be extended from the historic levels seen recently. This will lead to more providers facing financial hardship and further threaten both the level and quality of services provided to Illinois citizens... The structural imbalance in the current budget, combined with higher debt service costs and the loss of federal stimulus revenues, creates the very real possibility that the Governor and General Assembly will face a working deficit of $15 billion or more...early next year. This deficit would represent more than half of the current General Funds budget. The ability of the state to maintain any reasonable level of education or social services fundingand just as importantly to pay for those services on a timely basiswill be severely jeopardized. The state fiscal year, already extended an additional four months this year, will likely have to be even more prolonged next year, creating chaotic fiscal conditions as the situation snowballs.
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Works and Major Data Sources Cited

A Devastating Impact: How Budget Cuts and Delayed Payments Will Increase Homelessness in Illinois. Chicago Alliance to End Homelessness, March 24, 2010. American Hospital Association: TrendWatch Chartbook 2010, Chapter 6: The Economic Impact of U.S. Hospitals (www.aha.org/aha/research-and-trends/chartbook/ch6.html). Arts & Economic Prosperity III: The Economic Impact of Nonprofit Arts and Cultural Organizations and Their Audiences. Washington, DC: Americans for the Arts, 2007. Blackwood, Amy et al. Here Today, Gone Tomorrow: A Look at Organizations that May Have Their Tax Exempt Status Revoked. Washington, DC: Urban Institute, July 8, 2010. Boris, Elizabeth T. et al. Human Service Nonprofits and Government Collaboration: Findings from the 2010 National Survey of Government Contracting and Grants. Washington, DC: Urban Institute, October 2010. Broughman, Stephen et al. Characteristics of Private Schools in the U.S.: Results from the 2007-08 Private School Universe Survey. U.S. Department of Education, National Center for Education Statistics, 2009. Center for Philanthropy at Indiana University: Giving USA 2010: The Annual Report for Philanthropy for the Year 2009, 55th edition: Giving USA Foundation, 2010. Chicago Climate Action Plan: Progress ReportFirst Two Years. Chicago: City of Chicago, September 2009 (www.chicagoclimateaction.org). Governors Office of Management and Budget. Fiscal Year 2011 Budget: Allocations by Agency. Budget. Illinois.gov, August 2, 2010. Greater Chicago Food Depository: Illinois Cook County and Chicago metropolitan area-specific findings from national Hunger in America 2010 study, including Hunger in America 2010 Executive Summary: A Report on Emergency Food Distribution in Cook County and Hunger in America 2010: Chicago Profile (both available for download from the organization websites Hunger in Chicago, Research and Studies section (www.chicagosfoodbank.org/site/PageServer?pagename=hunger_research). Human Services in Illinois: A Point-in-Time Review of the Current System. Illinois Human Services Commission, June 2010. Illinois Department of Economic Security: Illinois Annual Economic Analysis Report, 2009. State of Illinois: June 2010 (http://lmi.ides.state.il.us/iaear.htm). Illinois Office of the Comptroller: Illinois State Comptrollers CQ Quarterly, July 2010 and October 2010 issues. Illinois State Budget, Fiscal Year 2011. State of Illinois, March 2010. Independent Sector website: Value of Volunteer Time (http://independentsector.org/volunteer_time). Joseph, Larry et al. Passing the Buck: FY 2011 State Budget Jeopardizes Programs for Children and Families. Chicago: Voices for Illinois Children, Budget & Tax Policy Initiative, June 2010. McNichol, Elizabeth et al. States Continue to Feel Recessions Impact. Washington, DC: Center on Budget and Policy Priorities, October 7, 2010. Mead, Charles et al. Income and Outlays of Households and Nonprofit Institutions, Survey of Current Business, April 2003.
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National Association of College and University Business Officers (NACUBO): 2009 NACUBO-Commonfund Study of Endowments. Washington, DC: NACUBO, January 2010. National Center on Charitable Statistics: Multiple website resources, including custom data table creation feature using data from IRS Business Master File, January 2010, and NCCS Core Files (Public Charities) circa 2008 (Data Analysis section of website (http://nccs.urban.org/tools/index.cfm); types, definitions of nonprofit organizations (http://nccsdataweb.urban.org/PubApps/nonprofit-overview.php); and NTEE category definitions (http://nccs.urban.org/classification/NTEE.cfm). Nonprofit Finance Fund: 2010 State of the Nonprofit Sector Survey, National Results. Available for download from organization websites State of the Sector Surveys section (http://nonprofitfinancefund.org/state-of-the-sector-surveys). Quarterly Census of Employment and Wages: 2006-2009 findings for the state of Illinois. Datasets downloaded for analysis from U.S. Bureau of Labor Statistics (BLS) website (www.bls.gov/data/). Regional Multipliers: A User Handbook for the Regional Input-Output Modeling System (RIMS II), third edition. Washington, DC: U.S. Bureau of Economic Analysis, 1997. Salamon, Lester et al. Recession Puts Pressure on Nonprofit Jobs. Baltimore: Johns Hopkins Center for Civil Society Studies, Listening Post Project Communiqu No. 19, 2010. Schrock, Greg et al. Potential Workforce Impacts of the Chicago Climate Action Plan: Quantitative and Qualitative Assessment. University of Illinois at Chicago, Center for Urban Economic Development, January 2009. Special Report: Illinois State Funding for Human Services in Context. Chicago: Center for Budget and Tax Accountability, February 2010. Terpstra, Amy et al. 2010 Report on Illinois Poverty. Chicago: Social IMPACT Research Center, Heartland Alliance, 2010. U.S. Bureau of Economic Analysis: U.S. GDP by State statistics. Downloaded using custom data table creation feature on organizations website (www.bea.gov/regional/gsp/). Volunteering in America 2010: National, State, and City Information. Washington, DC: Corporation for National and Community Service, Office of Research and Policy Development, June 2010.
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Appendix I
Defining the Nonprofit Sector
What Is a Nonprofit Organization?
Nonprofit organizations are those that qualify for tax-exempt status under section 501(c) of the Internal Revenue Code. The Internal Revenue Service (IRS) distinguishes between more 25 different types of nonprofits, each defined under a separate 501(c) subsection. The most common are 501(c)(3) public charity organizations (approximately 64% of the U.S. 501(c) nonprofit organization total, and 58% of the total in Illinois). Such organizations must be organized and operated exclusively for charitable, religious, educational, scientific, literary, and other similar purposes, and none of [their] earnings may inure to any private shareholder or individual (IRS.gov, Exemption RequirementsSection 501(c)(3) Organizations). They are also prohibited from engaging in any political or direct legislative advocacy activities and required to meet specified public support and representation criteria. A full description of the different types of 501(c) organizations is available on the NCCS website: http://nccsdataweb.urban.org/PubApps/profile1.php for a breakdown of the basic 501(c)(3) and other 501(c) categories; and http://nccsdataweb.urban.org/PubApps/profileDrillDown.php?state=US&rpt=CO for a detailed listing of all the organizations with other 501(c) designations; for example, 501(c)(4) civic leagues and social welfare associations targeting specific groups of individuals; 501(c)(5) labor unions and farm bureaus; 501(c)(6) business leagues, chambers of commerce, and real estate boards; 501(c)(7) social and recreational clubs; 501(c)(14) state-chartered credit unions; 501(c)(15) mutual insurance associations; and 501(c)(19) veterans organizations.
Registered vs. Reporting Nonprofits

To receive tax-exempt status, an organization must register with the IRS. The two exceptions are religious organizations and those with annual receipts less than $5,000.68 Those required to file annual earnings and expense statements with the IRSi.e., reporting organizationsare non-religious organizations and those with annual receipts and/or assets above a specified dollar amount threshold. In 2009, about one-third of all of Illinois non-religion-affiliated nonprofits (34%) fell into the non-reporting category. This attests on one hand to the large number of small organizations comprising the sector, as those exempted from reporting for reasons other than religious status represent the sectors smallest organizations. It also attests to certain measurement challenges inherent in the IRS registration and reporting requirements. Once a nonprofit registers with the IRS, it is presumed to remain active until it explicitly informs the IRS otherwise. As the Urban Institute notes, there is no guarantee that terminated organizations will in fact notify the IRS [of their change in status]; thus, many registered non-reporting organizations could be defunct nonprofits just sitting on the IRS Business Master File.69
Recent Changes in Reporting Requirements Likely to Improve Accuracy of Sector Size Measurements
With passage of the Pension Protection Act of 2006, new IRS reporting requirements have lowered the annual receipts threshold for mandated annual statement filing. Whereas, previously, organizations with annual receipts less than $25,000 were exempted from filing, as of the 2008 filing deadline for tax year 2007, those with receipts between $10,000 and $25,000 have been required to file an abbreviated e-Postcard statement, which asks only for updated contact information and that the organization indicate whether it is still active. Those that fail to comply within the specified filing extension period70 will have their tax exempt status revoked. Continued annual filing of the e-Postcard statement is mandatory for these organizations to maintain their 501(c) status.
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FIGURE A
Registered Nonprofits in Illinois by IRS Filing Status (for tax years 20072008, circa 2009)
Source: NCCS, IRS Business Master File, January 2010.
Results of New IRS Filing Requirements in Illinois

As Figure A illustrates, the number of Illinois non-religious non-reporting organizations by year-end 2009 was 18,290 (10,420 public charities and 7,870 other 501(c) nonprofits)around one-third of the non-religious organization total. As of June 2010, this number had declined to 12,515, of which 8,547 (68% of all non-filers) had missed their filing extension deadline. The Urban Institute posits a number of reasons for non-compliance with the new e-Postcard filing mandate. One is organizations lack of awareness of the regulatory change; another is that the organizations in question may have ceased operations. Indeed, the Urban Institute estimates that compared to the IRSs listings of all registered nonprofits in the U.S., the true number of active organizations could be 21% lower in the education subsector, 18% lower in the arts, culture, humanities subsector, and 22% lower for organizations in the broad human services subsector.71
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Appendix II
Definitions of 26 Single NTEE Categories
Very briefly, the National Taxonomy of Exempt Organizations, or NTEE, consists of:
2 6 major categories representing 10 broad-purpose categories, including health; education; human services (an aggregation of eight major categories made up of organizations dedicated to meeting basic human welfare needs and providing housing and other supportive services to in-need populations); arts, culture, humanities; environment (including natural resource conservation) and animals (wildlife preservation, animal care services); and other categories listed below. 6 55 detailed categories representing different activity and organization types within each major category. In the arts, culture, humanities category, for example, these encompass an array of performing and visual arts organizations and activities; different types of museums; organizations, places, and events dedicated to historical preservation and celebration of cultural heritage; literary societies; and various communications and publishing media.
A - Arts, culture, humanities Private nonprofit organizations whose primary purpose is to promote appreciation for and enjoyment and understanding of the visual, performing, folk, and media arts; the humanities (archaeology, art history, modern and classical languages, philosophy, and theology); history and historical events; and communications (film, video, radio, television, journalism, and publishing). Includes museums and halls of fame; historic preservation programs; organizations that provide services to artists, performers, entertainers, writers, or humanities scholars; programs which promote artistic expression of or within ethnic groups and cultures; art and performing arts schools, centers, and studios; historical societies; and genealogical or hereditybased organizations. B - Education Includes private educational institutions on the pre-kindergarten, elementary, secondary, and post-secondary level (two-year colleges and vocational/technical institutes, four-year colleges and universities, university graduate schools/programs); educational services/other support programs for the states public school system (special education services, remedial/literacy and after-school tutoring programs, gifted/talented programs, testing and counseling services); student support/resource-building services; student, alumni, and parent-teacher membership associations; and fundraising/supporting organizations. C - Environment Private nonprofit organizations whose primary purpose is to preserve, protect, and improve the environment. Examples include organizations that are involved in pollution control and abatement, conservation and development of natural resources (land, water, energy), control or elimination of hazardous or toxic substances, solid waste management/recycling, and urban beautification and open spaces development. Also includes nature centers and outdoor survival programs, botanical gardens/arboreta, and horticultural societies. D - Animals Private nonprofit organizations whose primary purpose is to provide for the care, protection, and control of wildlife and domestic animal populations through creation and/or maintenance of safe havens and education of pet owners and the general public. Examples include organizations that develop and manage wildlife preserves to protect endangered species and/or natural wildlife habitats, humane societies, veterinary services, and zoos and aquariums.
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E. Health care, general Private nonprofit organizations focused on preventing, diagnosing, and/or treating illnesses, injuries, and chronic health conditions; providing reproductive health care-related services; and delivering rehabilitative, palliative, and other patient and patient/family support services. Examples include wellness/health promotion programs; public health screening and education programs; ambulatory/primary health care services (community clinics, nonprofit group practices, diagnostic services providers); home health care services; hospices/palliative care for terminally ill patients and related support services for patients and patients family or caregivers; nursing care facilities; rehabilitative facilities and outpatient/therapy services; hospitals; emergency medical services (e.g., transport services, blood banks); and family planning, maternity, and other related services. F - Mental health, related Private nonprofit organizations that provide medical, case management, and/or counseling assistance to sufferers of psychiatric disorders, addictions, physical or psychic trauma, and/or acute emotional distress that interferes with ability to cope with regular daily living routines. Examples include residential and outpatient mental health treatment facilities/programs, residential and outpatient substance abuse treatment and rehabilitative care facilities, substance abuse prevention/education programs, mental health counseling services and therapeutic support groups, and crisis intervention programs/services (crisis hotlines, suicide prevention, rape and assault victim intervention services). G - Diseases, disorders, and medical disciplines This category comprises voluntary health organizations that engage public support for the prevention, cure, or improved treatment of specific diseases and disorders; public charities dedicated to advancing and supporting treatment/clinical investigation of a particular type or class of disease/disorder; and organizations representing specific medical disciplines or professional specialties. H - Medical research Private nonprofit organizations/affiliated programs that conduct clinical research (clinical trials, experimental treatment techniques) and/or are involved in the systemic study of a specific health condition or type/class of disease/disorder. I - Crime or justice related Private nonprofit organizations that conduct crime and violence prevention programs (e.g., community watch groups, youth violence/delinquency prevention, domestic violence or sexual abuse prevention/education programs) and those that provide protective and legal assistance services to the victims of abuse and violence. Also includes rehabilitative and supportive services for ex-offenders and inmate support programs. J - Employment related Private nonprofit organizations that provide job search and employment placement assistance (basic search/ application skills training, counseling/coaching through the search, interview, hiring, and initial job start process); training/retraining in specific job skills; and vocational rehabilitation services targeted to hard-toplace individuals, such as those with disabilities or mental health-related conditions (drug/alcohol addictions, psychiatric, or mood disorders). K - Food, nutrition, agriculture: Examples include food assistance/relief programs for the hungry and homeless, food banks, and food distribution or delivery programs.
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L - Housing, shelter Private nonprofit organizations that seek to meet the basic shelter needs of the community by providing temporary shelter for people in emergency situations, housing alternatives for lower-income families and/or those requiring additional supportive services to remain independent, and homeowners and renters assistance programs. Includes affordable/subsidized housing development and supportive programs, accessible housing programs/services to support independent living options for those with disabilities, senior housing, housing counseling and advocacy programs, and emergency shelter and temporary or transitional housing services. M - Public safety, disaster services Private nonprofit organizations with the purpose of preventing, predicting, and/or mitigating the effects of disasters (e.g. fires, floods, earthquakes, tornadoes), preparing people to cope with disasters, and/or to providing broad-based relief services to disaster victims. Also includes accident victim rescue squads and programs that offer general safety education (e.g., fire prevention, firearms safety, traffic safety programs). N - Recreation and sports Organizations encompassed include community recreational facilities, camping facilities, little leagues/other amateur sports teams, private nonprofit recreational or athletic clubs, and amateur sports competitions such as the Special Olympics. O - Youth development Private nonprofit organizations/affiliated programs that provide opportunities for children and youth to engage in recreational, cultural, social, and civic activities and/or develop leadership skills and a sense of civic and community identity through participation in youth groups; youth clubs/centers, and other types of youth-development programs. P - Human services agencies Category encompasses child welfare services and residential programs/services for orphaned, neglected, or abused/endangered children and youth; a wide variety of family services (parenting education, family counseling, services for single parents/low-income families to facilitate or encourage economic self sufficiency, such as child care services); support centers, day care and residential facilities/programs for the elderly and developmentally disabled; support services for other in-need populations, including homeless adults, individuals with physical disabilities and/or chronic illnesses, and immigrant/refugee groups; and emergency and personal assistance services for those with limited financial resources or immediate, crisisrelated financial needs. Types of agencies delivering these services include multipurpose agencies and neighborhood centers, specialized agencies and supportive service programs, and faith- and community-based organizations. Q - International, foreign affairs: Private nonprofit organizations whose primary purpose is to provide services or other forms of support to increase mutual understanding across countries; encourage social, economic, or political development outside of the U.S.; and/or impact national, multilateral, or international policies on international issues. Includes organizations that promote international understanding and friendly relations among nations, and cross-border exchanges of scholars scientists artists, journalists, and other professionals; are dedicated to preservation of world peace; provide international humanitarian aid, hunger/poverty relief, and support for economic development projects; protect national and cooperative security interests; foster international human rights; and raise and distribute funds for the benefit of overseas institutions (e.g., Friends of the American University in Rome).
43
R - Civil rights, social action and advocacy Private nonprofit organizations that protect and promote individual civil liberties and the civil rights/right to equality of specific groups and populations; work for the realization of social and policy goals that create, enhance, and/or promote an environment of tolerance and social justice; and broaden participation in the public policy debate. Examples include organizations that work to improve relations between racial, ethnic, and cultural groups; advocacy and citizen action groups; organizations that use courts to protect and enlarge civil rights and liberties; and organizations that promote voter education and registration. S - Community improvement Programs that focus broadly on strengthening, unifying and building the economic, cultural, educational, and social services of a community or neighborhood and improving the quality of life for residents through economic development and community capacity building. Examples include business district revitalization programs to attract investment in new business and industry for the community; programs that encourage or provide for the renewal or rehabilitation of homes, streets, sidewalks, and incidental recreational areas in the community; technical assistance to help develop the leadership and management capacities of communitybased organizations; and support of neighborhood associations/community resident engagement activities. T - Philanthropy, voluntarism: Includes private nonprofit grantmaking organizations, fundraising/funds distribution services such as United Way and Jewish United Fund, and organizations that promote volunteer engagement. U - Science and technology research: Private nonprofit organizations/affiliated programs that conduct research and study in the physical and life sciences, engineering, and technology. V. Social sciences research Private nonprofit organizations/affiliated programs that conduct or support research in social science and related disciplines that are concerned with the interrelationship of individuals in social, political, and economic systems (e.g., political science, economics, history, and broader fields of cultural, ethnographic, and demographic study). W - Public affairs, public service Category encompasses organizations/programs concerned with effective, fair, and accountable public agency, public official, and public election campaign practices; that help protect consumer rights; that seek to expand understanding of citizens rights and responsibilities and/or broaden participation in government decision making and the political process; and that support the development, maintenance, and/or accessibility of public infrastructure systems (transportation, utilities, communications). X - Religion, spiritual development: Includes religious congregations, places of worship, and ministries; interfaith coalitions/organizations that promote understanding between different religions; missionary organizations; publishers and producers of religious literature and media; and organizations that teach and promote alternative spiritual practices. Y, Z - Other, unclassified
44
Number of Illinois Public Charities circa 2009 by NTEE Major Category

Registered Filing 990s No. % Total % Regstrd
NTEE Major Category(ies) A. Arts, Culture, Humanities B. Education E. F. Pre-K, elementary, secondary schools 4-year colleges, universities Voc/tech, 2-year postsecondary schools Student services (facilities, materials) Educational services, learning support programs Alumni, student, parent-teacher groups Supporting, other/unclassified organizations Education Total Environmental quality protection, beautification Natural, energy resource conservation Nature centers, botanical gardens, arboreta Wildlife preservation/rescue, wildlife sanctuaries Animal shelters, care services Zoos, aquariums Supporting, other/unclassified organizations Environment, Animals Total General/Comprehensive Health Care Services Hospitals (excl. psychiatric) Nursing, rehab facilities, home health care Ambulatory care services (incl. family planning) Patient and family support programs, services Ancillary services (labs, blood banks, etc.) Mental Health/Related Services Residential mental health, addictions treatment Outpatient mental health/related programs Crisis intervention services Performing arts Visual arts; humanities; publishing, media Arts education Museums, cultural centers Historic sites, historical societies Arts services, supporting, other organizations Arts, Culture, Humanities Total
No.
% Total
1,340 415 120 714 822 421 3,832 696 133 41 755 442 1,746 97 2,071 5,981 113 248 45 49 372 11 232 1,070
35% 11% 3% 19% 21% 11% 100% 12% 2% 1% 13% 7% 29% 2% 35% 100% 11% 23% 4% 5% 35% 1% 22% 100%
847 235 83 469 596 287 2,517 414 86 21 472 250 1,151 52 1,389 3,835 74 191 33 24 279 10 165 776
34% 9% 3% 19% 24% 11% 100% 11% 2% 1% 12% 7% 30% 1% 36% 100% 10% 25% 4% 3% 36% 1% 21% 100%
63% 57% 69% 66% 73% 68% 66% 59% 65% 51% 63% 57% 66% 54% 67% 64% 65% 77% 73% 49% 75% 91% 71% 73%
Libraries
C.-D. Environment, Animals (Combined)
Broad Health Categoy (E.-H.) 250 201 257 76 118 147 471 24 7% 5% 7% 2% 3% 4% 13% 1% 212 161 199 48 93 89 395 20 8% 6% 7% 2% 3% 3% 14% 1% 85% 80% 77% 63% 79% 61% 84% 83%
45

NTEE Major Category(ies) G. H. Voluntary Health Organizations (w/focus on Diseases/Disorders, Medical Practice Specialties) Medical Research Supporting, membership, other/unclassified organizations (all 4 NTEE categories) Broad Health Category Total Broad Human Services Category (I.-P .) I. J. K. L. Housing/Shelter M. N. O. Youth Development Youth centers, clubs Youth development, mentoring programs Scouting organizations, other/unclassified youth development programs Youth Development Total Public Safety, Disaster Relief Sports, Recreation Camps, parks, community recreation facilities Recreational, athletic clubs Little leagues, other amateur sports teams Amateur sports competitions Supporting, other/unclassified organizations Sports, Recreation Total Affordable/subsidized &/or accessible housing Senior housing, retirement communities Homeless shelters, temporary housing Housing advocacy, homeownership support Other housing-related organizations Housing/Shelter Total Crime- and Justice-Related Crime, violence, sexual/domestic abuse prevention Victim protection, legal services Inmate, ex-offender support services Supporting, other justice-related organizations Crime/Justice-Related Total Job Skills Training, Employment Assistance Food, Nutrition, Agriculture Food assistance, food distribution programs Other category-related organizations, programs Food/Nutrition Total
No.
% Total
986 231 927 3,688
27% 6% 25% 100%
636 174 774 2,801
23% 6% 28% 100%
65% 75% 83% 76%
197 106 88 167 558 324 190 171 361 345 182 127 177 134 965 284 239 1,498 1,858 73 108 3,776 188 315 309 812
35% 19% 16% 30% 100% 100% 53% 47% 100% 36% 19% 13% 18% 14% 100% 100% 6% 40% 49% 2% 3% 100% 23% 39% 38% 100%
122 73 46 103 344 233 129 132 261 246 162 74 119 86 687 144 146 1,066 1,145 31 61 2,449 107 148 181 436
35% 21% 13% 30% 100% 100% 49% 51% 100% 36% 24% 11% 17% 13% 100% 100% 6% 44% 47% 1% 2% 100% 25% 34% 42% 100%
62% 69% 52% 62% 62% 72% 68% 77% 72% 71% 89% 58% 67% 64% 71% 51% 61% 71% 62% 42% 56% 65% 57% 47% 59% 54%
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NTEE Major Category(ies) P . Human Services Agencies Multipurpose human services agencies Neighborhood centers Childrens/youth services Family services (multiple) Child day care services Supportive services for elderly, disabled Supportive services for other populations Financial/other personal assistance services Supporting organizations, unclassified/other Human Services Agencies Total Broad Human Services Category Total Policy, Diplomacy-Related, Peace Promotion Broad Society Benefit Category (R.-W.) R. Civil/Human Rights, Social Justice Advocacy S. Community Improvement T. Economic development, business growth Community organizing Community service, leadership development Other community improvement organizations Community Improvement Total Philanthropy/Giving Services
No.
% Total
524 148 256 409 313 487 543 200 554 3,434 10,514 601 203 146 889 584 136 1,755 1,263 201 71 706 4,199 7,996 90 437 73 8,596 460
15% 4% 7% 12% 9% 14% 16% 6% 16% 100% 100% 100% 100% 8% 51% 33% 8% 100% 100% 100% 100% 100% 100% 93% 1% 5% 1% 100% 100%
272 76 173 290 213 372 358 123 365 2,242 6,796 367 130 74 522 373 92 1,061 878 131 36 507 2,743 1,093 63 114 45 1,315 179
12% 3% 8% 13% 10% 17% 16% 5% 16% 100% 100% 100% 100% 7% 49% 35% 9% 100% 100% 100% 100% 100% 100% 83% 5% 9% 3% 100% 100%
52% 51% 68% 71% 68% 76% 66% 62% 66% 65% 65% 61% 64% 51% 59% 64% 68% 60% 70% 65% 51% 72% 65% 14% 70% 26% 62% 15% 39%
Q. International Aid/Relief, Foreign Affairs
U. Science/Technology-Related Research V. Social Science, Humanities Research W. Public Affairs, Public Service Y.-Z. Other, Unclassified (Combined) Broad Society Benefit Category Total Religious congregations, houses of worship Religious media, publishing Other groups with spiritual development purpose Supporting organizations Religion Total X. Religion, Spiritual Development
Source: National Center on Charitable Statistics, IRS Master File, January 2010
47
Appendix III
Number of Illinois Public Charities circa 2009 by Region and County
County Sangamon Peoria Champaign McLean Macon Tazewell Kankakee Vermilion Coles Livingston Logan Iroquois Christian Woodford Douglas Edgar Shelby De Witt Mason Menard Ford Marshall Piatt Clark Moultrie Cumberland Stark Region Madison St. Clair Macoupin Monroe Randolph Clinton Bond Greene Jersey Region Registered No. 844 709 660 611 375 323 299 208 187 123 119 113 103 100 77 71 64 63 62 62 58 57 55 51 40 22 16 5,472 713 677 134 92 90 63 56 44 41 1,910 % IL Total 2.2% 1.8% 1.7% 1.6% 1.0% 0.8% 0.8% 0.5% 0.5% 0.3% 0.3% 0.3% 0.3% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.0% 14.2% 1.8% 1.7% 0.3% 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% 4.7% Filing 990s No. 511 431 397 377 207 169 153 106 114 68 66 61 51 64 34 39 21 40 31 38 35 31 30 26 20 14 11 3,145 349 307 65 53 45 40 36 20 24 939 % IL Total 2.4% 2.0% 1.9% 1.8% 1.0% 0.8% 0.7% 0.5% 0.5% 0.3% 0.3% 0.3% 0.2% 0.3% 0.2% 0.2% 0.1% 0.2% 0.1% 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 14.8% 1.6% 1.4% 0.3% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1% 4.3% Assets Reported on 990 $ Value (000s) 2,424,951 3,868,343 2,878,039 970,571 974,028 221,948 663,669 77 ,780 346,041 43,844 355,051 66,402 76,411 91,743 18,015 66,774 53,703 9,003 5,023 4,723 45,789 7 ,999 30,390 8,874 10,801 3,660 650 13,324,222 551,753 756,094 82,375 10,440 5,834 95,951 92,094 4,531 6,154 1,605,225 % IL Total 2.0% 3.2% 2.4% 0.8% 0.8% 0.2% 0.5% 0.1% 0.3% 0.0% 0.3% 0.1% 0.1% 0.1% 0.0% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 11.0% 0.5% 0.6% 0.1% 0.0% 0.0% 0.1% 0.1% 0.0% 0.0% 1.4% East St. Louis Central Illinois Region
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County Cook Dupage Lake Kane McHenry Kendall Will Region Winnebago La Salle DeKalb Whiteside Henry Stephenson Ogle Lee Bureau Daviess Grundy Boone Carroll White Putnam Region Jackson Williamson Jefferson Marion Effingham Franklin Montgomery Crawford Saline Faryette Richland Perry Lawrence Johnson Wayne Union Wabash Registered No. 17,056 3,243 1,789 1,095 636 161 1,148 25,128 732 296 293 186 171 169 155 132 113 108 105 94 70 50 16 2,690 228 199 132 127 119 106 99 93 79 69 67 63 56 51 51 47 44 % IL Total 43.8% 8.3% 4.6% 2.8% 1.6% 0.4% 2.9% 64.4% 1.9% 0.8% 0.8% 0.5% 0.4% 0.4% 0.4% 0.3% 0.3% 0.3% 0.3% 0.2% 0.2% 0.1% 0.0% 6.9% 0.6% 0.5% 0.3% 0.3% 0.3% 0.3% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% Filing 990s No. 8,586 2,250 1,038 625 420 90 607 13,616 398 175 188 96 98 105 82 81 66 68 63 59 33 33 8 1,553 125 101 57 67 61 44 52 49 33 44 41 35 32 36 37 27 23 % IL Total 40.3% 10.6% 4.9% 2.9% 2.0% 0.4% 2.8% 63.9% 1.9% 0.8% 0.9% 0.5% 0.5% 0.5% 0.4% 0.4% 0.3% 0.3% 0.3% 0.3% 0.2% 0.2% 0.0% 7 .5% 0.6% 0.5% 0.3% 0.3% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1% Assets Reported on 990 $ Value (000s) 74,774,478 16,413,935 1,948,058 2,145,849 657 ,716 14,509 2,885,288 98,839,832 1,617 ,073 329,213 497 ,983 61,444 84,411 218,632 61,801 166,172 83,489 77 ,300 144,545 12,690 5,238 14,040 1,959 3,375,990 645,368 90,195 17 ,496 70,553 263,024 85,028 83,309 9,470 52,899 17 ,482 34,303 30,261 19,446 1,349 23,445 14,196 10,121 % IL Total 61.5% 13.5% 1.6% 1.8% 0.5% 0.0% 2.4% 81.3% 1.3% 0.3% 0.4% 0.1% 0.1% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.0% 0.0% 0.0% 0.0% 2.9% 0.5% 0.1% 0.0% 0.1% 0.2% 0.1% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Northern Illinois Metro Chicago Region
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County Washington Clay Jasper Alexander Massac Pulaski Hamilton Edwards Gallatin Pope Hardin Region Rock Island Adams Knox Morgan McDonough Fulton Warren Pike Hancock Mercer Cass Schuyler Henderson Scott Brown Calhoun Region Total Registered No. 38 31 27 % IL Total 0.1% 0.1% 0.1% Filing 990s No. 21 22 9 % IL Total 0.1% 0.1% 0.0% Assets Reported on 990 $ Value (000s) 4,801 2,238 2,096 % IL Total 0.0% 0.0% 0.0% Region
35 0.1% 17 0.1%
4,359 0.0%
28 0.1% 13 0.1% 13,387 0.0% 27 0.1% 13 0.1% 20 0.1% 13 0.1% 19 0.0% 15 0.1% 14 13 7 1,889 491 276 187 168 118 113 86 74 71 60 58 33 24 0.0% 0.0% 0.0% 4.8% 1.3% 0.7% 0.5% 0.4% 0.3% 0.3% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% 3 10 5 1,005 265 168 119 104 68 60 52 41 40 27 31 20 11 0.0% 0.0% 0.0% 4.9% 1.2% 0.8% 0.6% 0.5% 0.3% 0.3% 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 9,795 0.0% 3,720 0.0% 982 0.0% 308 9,729 3,598 1,522,954 755,257 559,973 655,227 387 ,042 59,996 119,253 188,101 14,985 33,168 4,335 9,823 4,765 1,528 0.0% 0.0% 0.0% 1.1% 0.6% 0.5% 0.5% 0.3% 0.0% 0.1% 0.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Southern Illinois
40 0.1% 16 0.1%
1,871 0.0%
23 0.1% 12 0.1% 26,467 0.0% 22 0.1% 17 0.1% 1,844 5 38,938 4.9% 0.0% 100.0% 1,051 1 21,310 5.0% 0.0% 100.0% 1,853 0.0% 2.2% 0.0% 100.0% Western Illinois Unclassified 85,852 121,491,952.6 2,823,643
Source: National Center on Charitable Statistics, IRS Master File, January 2010
Not coincidentally the rank order of the 15 counties roughly parallels their rank order by population size: Cook County ranks number one, followed by DuPage (two), Lake (three), Will (four), Kane (five), McHenry (six), Winnebago (seven), Madison (eight, St. Clair (nine), Sangamon (ten), Champaign (11), Peoria (12), McLean (13), Rock Island (14), and Tazewell (15; a county bordering both McLean and Peoria) (U.S. Census Bureau, State Population Estimates, 2008).
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Appendix IV
Methodology for Estimating Nonprofit Employment
Step 1
Match National Taxonomy of Exempt Entities (NTEE) detailed categories of organizational types against North American Industry Classification System (NAICS) subsector groups to identify like categories. Matching was based on the NTEE/NAICS/SIC Crosswalk guide developed by the NCCS, supplemented with further details from various published and online sources, among them articles and reports citing nonprofit employmentrelated statistics (e.g., C. Mead et al.s article on NPISHs in Survey of Current Business, April 2003), trade and professional association membership directories, and Illinois nonprofit sector profiles, such as the Illinois Human Services Commissions June 2010 Human Services in Illinois.
Step 2
Calculate the percentage of total NAICS group organizations the corresponding NTEE category organizations represent. Where there was not a precise match, a percentage was estimated based on other information sources.
Step 3
Adjust the percentage of the applicable industry group (i.e., NAICS category organizations) the nonprofit, NTEE category organizations make up by the percentage of total workers the industrys organizations employ to derive a nonprofit organization distribution representing the organizations share of overall industry group employment. Alternative estimation methodology: in cases where nonprofit representations among overall industry group were low, employment estimates were calculated by multiplying the average number of workers per organization within the industry group by number of representative nonprofit organizations.
Matching Criteria
NAICS Industries and Subsector Groups Corresponding NTEE Categories
551- INFORMATION Publishing, broadcast media, film/video A. Arts, Culture Media, journalism production X. Religion Religious literature, TV/radio broadcast production Libraries, archives B. Education Libraries 554- PROFESSIONAL, TECHNICAL SERVICES Scientific, technology-related research, R&D U. Science & Technology Research labs/institutes Sociological, humanities-related research V. Social Sciences Research institutes Legal services I. Crime, Justice-Related Dedicated legal aid services Tax preparation, other financial services P . Human Services Agencies Personal Landscaping services assistance services, finance-related Technical, management consulting companies C. Environment Landscaping, horticultural services S. Community Improvement Small business development assistance Common codes representing technical assistance organizations among all NTEE categories*
51
NAICS Industries and Subsector Groups
Corresponding NTEE Categories
561- EDUCATION B. Education PK-secondary schools; colleges/ universities; trade/technical schools; educational services providers A. Arts, Culture Arts education; performing arts schools 562- HEALTH, HUMAN WELFARE Outpatient, ambulatory care services F. Health Care, General Hospitals, community clinics, amily planning/reproductive care centers, home health Hospitals care, and ancillary medical/emergency support services G. Mental Health/Related Residential, outpatient, and self-help mental health, emergency/crisis intervention and substance abuse treatment programs/services Nursing, other types of residential care F. Health Care, General Nursing, rehabilitative facilities Assisted living, senior communities P . Human Services Agencies Residential, housing/ supportive services for the elderly, disabled, chronically ill Social Assistance Broad Human Services Categories I.-O.: Food and housing assistance, community safety, disaster relief, vocational rehabilitation, youth development, and other human welfare/social services 571- ARTS, RECREATION, ENTERTAINMENT Performing arts companies A. Arts, Culture Theater, dance, musical performance Museums, historical sites, zoos/aquariums, other groups; also museums, historical societies nature-related recreation and education venues C.-D. Environment/Animals Zoos/aquariums, botanical gardens/arboreta, nature centers Sports teams, activities N. Sports, Recreation Recreational/athletic facilities, Athletic, recreational clubs, facilities programs; sports teams, amateur sports competitions 581- OTHER SERVICES MEMBERSHIP ORGANIZATIONS Civic, social, business/trade-related membership B. Education Student, alumni, parent-teacher associations organizations O. Youth Development Scouting organizations S. Community Improvement Community service/civil leagues, business development groups Common codes representing professional membership organizations among all NTEE categories* Religious organizations X. Religion Grantmaking organizations, giving services T. Philanthropy, Voluntarism Environmental, civil/human rights, other social R. Civil Rights, Social Action/Advocacy; Q. International advocacy groups International human rights organizations; W. Public Affairs, Public Service Citizens rights, consumer protection/ watchdog groups C. Environment Organizations dedicated to improving environmental quality and sustainability
*Common codes represent activities of organizations, such as research, fundraising, and technical assistance, which are common to all major groups. The seven common codes used are: 01 Alliance/Advocacy Organizations; 02 Management and Technical Assistance; 03 Professional Societies/Associations; 05 Research Institutes and/or Public Policy Analysis; 11 Monetary Support Single Organization; 12 Monetary Support Multiple Organizations; 19 Nonmonetary Support Not Elsewhere Classified (N.E.C.). NCCS website, NTEE pages, http://nccs.urban.org/classification/NTEE.cfm.
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End Notes
1 Further details about the distinctions between the various types of organizations qualifying as tax exempt under the Internal Revenue Code are provided in Appendix I. 2 Source of all tax exempt organization counts are National Center for Charitable Statistics (NCCS) data tables created using the IRS Business Master File released January 2010. 3 The distinction between reporting and registered organizations is important because it is reporting organizations that are the source of employment statistics for the nonprofit sector. This distinction is defined in Appendix I. 4 501(c)(3) private foundations are referenced here for purposes of defining the total tax-exempt organization/ universe. The remainder of this section will be devoted to other types of nonprofits, with an emphasis on public charities. For more detailed information about the foundation role, interested readers should visit the Donors Forum website, www.donorsforum.org. 5 Appendix II provides detailed definitions of the NTEEs 26 major categories. The broad category definitions used in this report correspond to those of the NCCS. They differ somewhat from the definitions favored by Illinois nonprofit leaders, in particular with regard to the human services sector. This reflects Illinois leader efforts to maintain comparability to Illinois state budget categories. Thus, for example, mental health and substance abuse treatment services, which are funded out of Illinois Human Services budget, are classified as Human Services by Illinois leaders, while the NCCS defines classifies them under the Health category. 6 While it is theoretically possible that some non-reporting Illinois public charities could have assets greater than $100,000, the percentage is likely to be extremely small. Of all registered religious organizations circa 2009, 76% had assets less than $100,000, and the comparable percentage of reporting organizations was 68% (NCCS, IRS Business Master File, January 2010). Of the remaining non-reporting organizations, all had annual receipts less than $25,000. 7 Unless noted otherwise, the data source for the public charity counts and asset size statistics in this and the following section is NCCS (IRS Business Master File, January 2010). 8 Illinois Human Services Commission, Human Services in Illinois, June 2010. 9 The large number of unregistered food assistance providers in Illinois is an indication not only of small budget size, but also of the large number of faith-based organizations that operate hunger relief programs. According to the 2009 Congregational Economic Impact Study, a survey of 1,525 U.S. religious congregations conducted by the Alban Institute and the Center on Philanthropy at Indiana Universitys Lake Institute on Faith & Giving, most congregations have outreach programs that provide food, shelter, and other emergency assistance services. 10 School counts are for Illinois 929 public school districts for the school year 2009-2010 (Illinois State Board of Education, District Enrollments 2010). 11 Chicagos stature as a world-class destination for the arts (the number one source of independent theater productions in the U.S., as well as home to world-class art, natural history, and science museums, and one of the worlds top-ranking symphony orchestras) also influences this figure. Based on population factors alone, we would expect to find a larger representation of performing arts organizations in Cook County than elsewhere in the state. However, its share of such organizations far exceeds that predicted by its share of the overall Illinois arts, culture subsector: while Cook County encompasses 47% of all arts, culture organizations in the state, its theater groups make up 66% of the equivalent state total, and its dance companies make up 73% (NCCS, Core Files Public Charities, 2008). 12 National Center for Education Statistics: Characteristics of Private Schools in the U.S., 2009. 13 Illinois Board of Higher Education website, Colleges and Universities section (www.ibhe.state.il.us/Colleges and Universities/default.htm).. 14 Chicago Office of Tourism, 2008 Statistical Information. 15 These include registered 501(c)(3) private foundations, all of which are required to submit an annual IRS statement; and registered public charities, which include organizations that are exempted from IRS reporting requirements. Non-reporting organizations are excluded from this analysis because of the difficulty in ascertaining their continued operating status and likelihood that, if indeed still active, they are very small organizations without paid staff. 16 The nonprofit employment statistics reported here are estimates based on Quarterly Census of Employment and Wages (QCEW) tracking data for Illinois, looking at North American Industry Classification System (NAICS)-defined industries that have rough NTEE category equivalents. The estimates were derived through comparison of NAICS industry subsector and NTEE category 501(c)(3) organization counts and subsequent estimation of 501(c)(3) organizations share of the total industry workforce. These estimates are approximate only, as the government agencies involved in producing QCEW data do not explicitly track nonprofit sector employmentnor is there a perfect match between the NAICS and NTEE categories. As already noted, this analysis encompasses only those nonprofits with 501(c)(3) designations. Further information about the methodology used for these estimates is provided in Appendix IV.
53
17 QCEW workforce estimates for Illinois, 2009. All subsequently cited industry workforce counts are also from this source. 18 Of all Illinois hospitals in 2008 (both private and public sector), 78% were nonprofit, 8% were owned and operated by for-profit corporations, and 14% were government owned. Within the private sectorthe focus of this reports analyses501(c)(3) nonprofit-operated hospitals made up 86% of the total (Kaiser Family Foundation, Statehealthfacts.org: Illinois, 2008 Hospitals). 19 Statehealthfacts.org: Illinois, 2008 Nursing Homes. 20 While the performing arts and recreation categories comprise a far larger number of nonprofit organizations than do the museum, historical site, and zoo/aquarium categories, the former two categories also comprise a far larger number of small, community-based and largely or exclusively volunteer-staffed organizationscommunity theaters, little leagues, hobby clubs, and the like. Thus, the significantly larger percentage of this subsectors nonprofit employees who work for museums/other cultural institutions (73%) than for performing arts (19%) or recreational/sports (8%) organizations reflects these employers larger budget sizes and correspondingly greater likelihood of having a paid staff. 21 Cited in Center for Tax and Budget Accountability report, Illinois State Funding for Human Services in Context, February 2010. 22 The three NAICS-defined social advocacy organization subcategories are human rights, environmental, and other social advocacy organizations (QCEW, U.S. Bureau of Labor Statistics website). 23 NCCS, Core Files, 2008. 24 Source of all Illinois Gross State Product (GSP) statistics is U.S. Bureau of Economic Analysis (BEA), U.S. GDP by State statistics obtained using custom data table creation feature on BEA website, www.bea.gov/regional/gsp/. 25 While spending is not the measure used for determining contribution to GSP for any other industry, economists have concluded that this is a reasonable proxy measure for nonprofit sector organizations. In their seminal essay on this topic, which focused on program and membership fee-charging nonprofit institutions serving households (NPISHs), U.S. BEA economists Charles Mead, Clinton McCully, and Marshall Reinsdorf argued that for NPISHs, ...revenues from sales of services may be far below the cost of producing the services because the organizations purpose is something other than making a profit. Thus, in contrast to commercial organizations, for NPISHs, instead of sales, it is the expenses that NPISHs incur to produce their output [that provide] a meaningful measure of the value of their output (Income and Outlays of Households and Nonprofit Institutions, Survey of Current Business, April 2003).
26 U.S. BEA, Regional Multipliers: A User Handbook for the Regional Input-Output Modeling System (RIMS II), third edition, 1997 . 27 Based on analysis of 2009 American Hospital Association Annual Survey data reported in both TrendWatch Chartbook 2010 and in Economic Contribution of Hospitals fact sheet on organizations website (www.aha.org/aha/ research-and-trends/health-and-hospital-trends/2010.html). 28 Federation of Independent Illinois Colleges & Universities website (www.federationedu.org/ EconomicImpactCalculator/index.asp). 29 Americans for the Arts: Arts & Economic Prosperity III, 2007 (a study of 95,000 attendees of museum/arts exhibits and theater, dance and musical performance across the U.S.). 30 See above. 31 University of Illinois at Chicago, Center for Urban Economic Development: Potential Workforce Impacts of the Chicago Climate Action Plan: Quantitative and Qualitative Assessment, January 2009. 32 Other evidence suggesting a likely increase in demand for nonprofit organization education and training services in support of green industry growth is provided in the Illinois Department of Employment Securitys 2009 Illinois Annual Economic Analysis Report: Educational programs at community colleges and universities around the state have been started to train people for work related to [the states emerging] green industries. Certificates or degrees are already available for fields such as wind turbine technology, renewable energy, sustainable business practices, environmental resources and policy, bio-fuels, and green technology. The number of programs is expected to increase as demand increases (emphasis added). 33 The examples cited are from the Illinois Human Services Commissions June 2010 Human Services in Illinois report and, for those related to the environment, the Chicago Climate Action Plan and related documentation, and accomplishments reported by the environmental group Environment Illinois. 34 Human Services in Illinois, June 2010. 35 See above. 36 See above. 37 See above. 38 See above. 39 See above. 40 See above.
54
41 Environment Illinois website, www.environmentillinois.org. 42 See above. 43 City of Chicago: Chicago Climate Action Plan (www.chicagoclimateaction.org/filebin/pdf/finalreport/ Introduction.pdf). 44 Independent Sector, Value of Volunteer Time (http://independentsector.org/volunteer_time). 45 Corporation for National and Community Service, Office of Research and Policy Development: Volunteering in America 2010, June 2010. 46 Greater Chicago Food Depository: Hunger in America 2010: Chicago Profile, May 2010. 47 Human Services in Illinois, June 2010. 48 Volunteering in America 2010: National, State, and City Information, June 2010. 49 Heartland Alliance, Social IMPACT Research Center: 2010 Report on Illinois Poverty, 2010. 50 Similar findings were also yielded by both national and state level surveys with regard to the impact of the economy on nonprofits. A compendium of these findings was published by the National Council of Nonprofits and is available upon request from Donors Forum. 51 The Art Newspaper: Trouble Deepens for Museums, April 2009. 52 The Art Institute of Chicago: Annual Report 2009, Report of the Treasurer. 53 National Association of College and University Business Officers: 2009 NACUBO-Commonfund Study of Endowments, January 2010. 54 Time Out Chicago, Issue 280: July 8-14, 2010, citing the Illinois Arts Council and Arts Alliance Illinois as sources; affected organizations named in the article include large institutions like the Art Institute of Chicago [and Chicago Department of Cultural Affairs] and small ones such as Lucky Plush Productions,...the Experimental Sound Studio, Strawdog Theater Company, and dance company Same Planet Different World. 55 Center on Budget and Policy Issues: States Continue to Feel Recessions Impact, October 7, 2010. 56 Illinois State Comptrollers CQ Quarterly, July 2010. 57 Voices for Illinois Children: Budget and Tax Policy Initiative Special Report: Passing the Buck, June 2010. 58 State of Illinois, Illinois State Budget, Fiscal Year 2011. 59 Illinois Department of Economic Security: Illinois Annual Economic Analysis Report, 2009.
60 U.S. Bureau of Labor Statistics: QCEW (Illinois statistics). 61 Johns Hopkins Center for Civil Society Studies, Listening Post Project: Recession Puts Pressure on Nonprofit Jobs, 2010. 62 The performing arts and museum, historical sites, other organizations employment statistics cited here are not displayed in the relevant graph (Figure 8), but are subsumed under the arts, entertainment, recreation category. 63 It may be recalled that the membership organizations subsector includes a mix of nonprofits, some with paid memberships, but also 501(c)(3) public charities such as social justice advocacy groups and grant-making organizations. 64 U U.S. Bureau of Labor Statistics: QCEW (Illinois statistics). 65 A May 24, 2010 Chicago Tribune article reported that, the previous week, the Art Institute of Chicago laid off approximately 65 members of its museum staff..., [the museums] second round of layoffs at the museum since June 2009, when 22 employees were cut. And, more recently, the Field Museum announced plans to cut about 50 jobs from its 547-job staff through early retirement and buyout incentives (Crains Business Chicago, September 10, 2010). The same Crains article that reported the Field Museums payroll reduction plans additionally noted previous cutbacks by other major Chicago museums among them, the Museum of Science and Industry, which in February 2009 enacted across-the-board salary freezes and laid off about 4 percent of its full-time staff (www.chicagobreakingnews.com, February2, 2009). 66 Fierce HealthFinance.com: Layoffs Continue to Plague Hospitals, February 17 , 2010. 67 ChicagoTribune.com: 1,100-plus Workers Will Lose Their Jobs, September 8, 2010. 68 Although religious organizations are not required to register with the IRS, many nevertheless do so voluntarily (nationwide, up to one-half, according to the NCCS). 69 Urban Institute: Here Today, Gone Tomorrow: A Look at Organizations that May Have Their Tax Exempt Status Revoked, July 2010. 70 Organizations mandated to file the new form 990N e-Postcard have a three-year filing extension deadline, which varies depending upon their fiscal year end date. The extension time period ranges from May to December 2010 (Here Today, Gone Tomorrow, July 2010). 71 See above.
55
Donors Forum at a Glance

Donors Forum was founded in 1974 as Donors Forum of Chicago. Long recognized as the go to resource on philanthropy and nonprofits in the region, the organization dropped of Chicago from its name in 2007 as it broadened its reach to serve the entire state of Illinois. Valerie S. Lies, a nationally recognized leader in philanthropy, is President and CEO of Donors Forum. She assumed her position in 1987. Her many honors include serving as Co-chair of the National Panel on the Nonprofit Sector which was organized with the encouragement of the U.S. Senate Finance Committee. At the time of publication, some 1,410 individuals and institutions belonged to Donors Forum. This included 192 Members (foundations, corporations, and other funders), 34 Associate Members (professional advisors to funders), and 835 Forum Partners (nonprofits, schools, places of worship, government agencies, community groups, and consultants). Countless others use Donors Forums services. Some of Donors Forums services and products are free; others are available for an affordable fee. Some are available only to Members, Associate Members, or Partners while others are open to the public at large. Individuals and institutions belonging to Donors Forum always receive a discount on products and services for which fees are charged. Services include: Networking and Education N umerous workshops and programs on a variety of subjects such as fundraising, grantmaking, board governance, nonprofit management, strategic planning, and advocacy. R egular meetings of peer groups of funders on topics ranging from youth development to the environment to poverty reduction. E vents featuring leaders in philanthropy and the nonprofit sector. Information and Knowledge
Research and publication of studies such as

A Vital Force in Illinois: The Nonprofit Economy 2011, Economic Outlook 2011, and Giving in Illinois.
A free Library in Chicago and six Philanthropy

Centersin Effingham, Glen Ellyn, Grayslake, Joliet, Quincy, and Schaumburgwith resources and tools for nonprofits and funders. These hold the second largest philanthropy collection in the nation.
Newsletters, including ForumNotes, Nonprofits

Now, and Policy Update, and publications such as Illinois Nonprofit Principles and Best Practices and Fair and Accountable: Partnership Principles for a Sustainable Human Services System.
A newly re-designed website,

www.donorsforum.org, with many free tools and resources for nonprofits and funders. Leadership and Advocacy
Briefings for nonprofits and funders on legislation

affecting the sector and the State budget.
Close collaboration with the Illinois Attorney

Generals Charitable Advisory Council.
The Public/Nonprofit Partnership Initiative, a

comprehensive effort to help reform the States fiscal and human services system through improved public/nonprofit contracting relationships.
Support and coordination for grantmakers and

nonprofits in exercising their right to advocate for public policies and in building relationships with elected officials and other policy makers.
Media outreach to explain the value of the sector

and to comment on important issues.
To learn more about Donors Forum and the benefits of becoming a Member, Associate Member, or Forum Partner, please visit www.donorsforum.org or call 312-578-0090 (toll free 888-578-0090).
56
ACKNOWLEDGEMENTS
This report was researched and produced by Donors Forum, which is led by Valerie S. Lies,
President and CEO.
It was made possible in part by the generosity of the Henrietta Lange Burk Fund, administered by Bank of America Merrill Lynch. The report and the recommendations herein are solely the responsibility and views of Donors Forum, and they are not intended to reflect the views of any donor or sponsor.
Research and Writing
Judith Schroeter: Director, Research (Principal Researcher and Writer) Valerie Denney (Consultant, Chicago) Beverlyn Weaver: Research Assistant
Editorial Oversight
Robin Berkson: Senior Vice President Marilou Jones: Director, Communications Celeste Wroblewski: Vice President, External Relations
Editorial Contributions and Review
Claudette Baker: Vice President, Library and Nonprofit Services Delia Coleman: Manager, Public Policy Communications and Outreach Laurel OSullivan: Vice President, Public Policy
Publication Design
Karen Gibson (Consultant, Chicago)
208 South LaSalle Street Suite 1540 Chicago, Illinois 60604 www.donorsforum.org info@donorsforum.org tel 312-578-0090 toll free 888-578-0090
Donors Forum strengthens philanthropy and the nonprofit community in Illinois by providing resources and services education, networking, research, library services, publications, advocacy, and leadershipfor grantmakers, other donors, advisors, and nonprofits. In so doing, Donors Forum increases the ability of the philanthropic and nonprofit sector to meet the needs and enhance the lives of individuals, families, and communities.

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A Vital Force in Illinois:

The Nonprofit Economy 2011

A Vital Force in Illinois:

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

About Donors Forum

About This Report

Introduction 1 Key Findings Recommendations and Implications 2 5

Bob Glaves Chair, Board of Directors, Donors Forum

Valerie S. Lies President and CEO, Donors Forum

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Rival the States Largest Industries in Size

Account for Ten Percent All Private Sector Jobs

Contribute Significantly to Illinois Economy

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Have a Positive Multiplier Effect on the Economy

Reduce State Costs

Generate $9.3 Billion in Volunteer Time

Face Serious Financial Challenges

See an Unprecedented Demand for Their Services

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Are Hit Hard by the States Budget Crisis

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Recommendations and Implications:

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Recommendations and Implications: A Vital Force in Illinois

Legislators & Government Leaders

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Recommendations and Implications: A Vital Force in Illinois

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Recommendations and Implications: A Vital Force in Illinois

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Importance of the Nonprofit Sector in Illinois

I. DEFINING THE ILLINOIS NONPROFIT SECTOR

Sector Size and Composition

Distribution of Tax-Exempt Organizations in Illinois circa 2009 by 501(c) Designation

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Size of Nonprofit Sector Rivals the States Largest Industries

II. PROFILE OF ILLINOIS 501(c)(3) PUBLIC CHARITY ORGANIZATIONS

Breadth and Versatility of Functions Performed

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Registered Public Charities in Illinois circa 2009 by Broad Purpose Category

Key Characteristics of Public Charity Organizations

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

N. Sports, Recreation (4th Largest) O. Youth Development (11th Largest)

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

9% 20% 19% 9% 14% 16% 2% 1% 5% 3% 1% 0.2% 2% 22% 92% 1% 6% 1%

348 463 213 372 358

15.5% 21% 10% 17% 16%

W. Public Affairs, Public Services (12th Largest)

Other; Unclassified/Unknown GRAND TOTAL

A Majority of Illinois Public Charities Have Assets Less Than $100,000

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Source: NCCS, IRS Business Master File (January 2010)

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Who Benefits from Illinois Public Charity Offerings?

Domestic Leisure Travelers: Activities Engaged in at Travel Destination Chicago

Source: Chicago Office of Tourism, D.K. Shifflet & Associates, 2009

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Populations Served by Illinois Public Charities (Selected Examples) *

A VITAL FORCE IN ILLINOIS: THE NONPROFIT ECONOMY 2011

Top Illinois Counties by Number of Registered Public Charities

Geographic Distribution of Illinois Public Charities