1. THE STATE OF NONPROFITAMERICA Lester M. Salamon, editor An Aspen Institute Project Published by the Brookings Institution Press, 2002

2. CHALLENGES The fiscal challenge The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

3. CHALLENGES I: THE FISCAL CHALLENGE Federal retrenchment The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

4. 0% 20% 40% 60% 80% 100% 120% 140% 160% 19501955196019651970197519771980198519891994 Total Pensions Education Health Welfare GOVERNMENT SOCIAL WELFARE SPENDING The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002) 1950 – 1994 1980 = 100

5. CHALLENGES I: THE FISCAL CHALLENGE Federal retrenchment Changing forms of government support Tepid giving growth The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

6. GROWTH IN NONPROFIT REVENUE FROM PHILANTHROPY, BY SUBSECTOR, 1977-97 8 16 83 45 42 14 17 0 Share of Rev. Growth, 1977-97 18 27 20 12 19771997 6 16 20 36 44 84 86 41 31 33 15 14 Share of Total Revenue 90 131 307 106 91 3 % Change, 1977-97 TOTAL, W/O RELIG TOTAL Religion Arts & Culture Civic Social Services Education Health FIELD The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002) 62

7. CHALLENGES The fiscal challenge The competition challenge The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

8. Employment Child day care5238-27% Job training9389-4% Individual and Family services9491-3% Home health6028-53% Kidney dialysis centers2215-32% Facilities/Enrollment Dialysis centers58 a 32-45% Rehabilitation hospitals70 a 36-50% Home health agencies64 a 33-48% Health Maintenance orgs.65 a 26-60% Psychiatric Hospitals19 a 16-16% Hospices 89 c 76-15% The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002) NONPROFIT and FOR-PROFIT ROLES IN SELECTED FIELDS, 1982-1997 % Nonprofit% Change in 1982 a 1997 b Relative N/P Share

9. HOSPITAL TRENDS, BY OWNERSHIP, 1980-1996 -22% -9% 48% Total -10% -15% 67% Nonprofit -24% -44% 4% Government 57% 70% 40% For-Profit -60% -40% -20% 0% 20% 40% 60% 80% Expenditures* Beds Hospitals * Constant 1996 dollars The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

10. TRENDS IN CLINIC AND HOME HEALTH CARE, PRIVATE INSTITUTIONS, 1977-1992 0% 100% 200% 300% 400% 500% 600% 700% 800% 900% EstablishmentsEmployeesRevenues 89% 281% 365% Nonprofit 377% 720% 800% For-profit The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

11. Day Care Individual & Familiy Svcs Job Training Residential Care Total 1977 Revenues A 48% 8 15 26 23% Revenue Growth 1977-96 B 74% 22 36 35 39% Ratio B/A 156% 267 233 130 168% FOR-PROFIT SHARE OF SOCIAL SERVICE AGENCY GROWTH, 1977-1996 For Profit Share of: The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

12. CHALLENGES The fiscal challenge The competition challenge The technology challenge The effectiveness challenge The legitimacy challenge The human resource challenge The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

13. OPPORTUNITIES Favorable social and demographic shifts The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

14. OPPORTUNITIES: SOCIAL AND DEMOGRAPHIC SHIFTS Aging of the Population Changing Role of Women Shifts in Family Structure Expanded Immigration Outsourcing of Family Functions Rise of the “Cultural Creatives” The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

15. OPPORTUNITIES Favorable social and demographic shifts New Philanthropy The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

16. OPPORTUNITIES: THE NEW PHILANTHROPY Intergenerational transfer of wealth The “New Wealth” New Corporate interest The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

17. OPPORTUNITIES Favorable social and demographic shifts New Philanthropy Visibility and policy salience The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

18. OPPORTUNITIES: VISIBILITY Reagan rhetoric Civil Society/Central Europe “Global associational revolution” “Social capital” September 11, 2001 The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

19. OPPORTUNITIES Favorable social and demographic shifts New Philanthropy Visibility and policy salience Resumption of government spending growth The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

20. OPPORTUNITIES: GROWTH IN REAL GOVERNMENT SOCIAL WELFARE SPENDING, 1985-1995 +26% U.S. GDP +36% Total Social Welfare +69% Health +36% Social Services +27% Income Assistance +40% Educ. Research +54% Housing Pensions +18% 0% 10% 20% 30% 40% 50% 60% 70% Source: Social Security Bulletin; Economic Report of the President, (February 1998). The State of Nonprofit America

21. CAUSES OF RECENT SOCIAL WELFARE SPENDING GROWTH Expansion of entitlement programs SSI Medicaid Medicare The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

22. FEDERAL ENTITLEMENT PROGRAM GROWTH 1980-1999 Medicare $79.9 $212.0 +165% Medicaid 56.8 189.5 +222% SSI 9.5 30.9 +225% $4,900.9 U.S. GDP $8,856.5 +81% Total $146.2$432.4 +196% 1980 Amount 1999 % change 1980-99 Constant 1999 $ (billion) The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

23. CAUSES OF RECENT SOCIAL WELFARE SPENDING GROWTH Expansion of entitlement programs SSI Medicaid Medicare New Initiatives State Activism The Welfare Reform Windfall New Tools The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

24. “Profit-making organizations are more flexible with respect to the deployment and redeployment of resources…But the centrality of mission for nonprofit organizations places limitations on their flexibility of action.” Rosabeth Moss Kanter and David V. Summers, 1987 The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

25. NONPROFIT RESPONSE 1)Overall growth The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

26. CHANGES IN NONPROFIT REVENUES, BY SUBSECTOR, 1977-1997, IN CONSTANT DOLLARS 81% Product Gross Domestic 144% Total N/P 79% 213% 280% 167% 82% Civic, Social Services ArtsHealthEducation 0% 50% 100% 150% 200% 250% 300% The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

27. 400 500 600 700 800 1977198219871992 1997 GROWTH IN NUMBER OF REGISTERED CHARITABLE ORGS IN THE U.S., 1977-97 1977-87 +15,000/yr. 1977-97 +115% +23,000/yr. 1987-97 +27,000/yr. The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

28. NONPROFIT RESPONSE 1)Overall growth 2)Successful marketing to paying customers The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

29. SOURCES OF NONPROFIT REVENUE GROWTH, 1977-1997* FEES, COMMERCIAL 51% GOVERNMENT 42% PHILANTHROPY 7% The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002) * Excluding Religion

30. GROWTH OF NONPROFIT FEE INCOME, BY SUBSECTOR, 1977-97 17 46 53 35 63 52 51 47 Share of Rev. Growth, 1977-97 52 65 28 34 46 16 14 47 19 13 67 53 51 46 47 51 19771997 Share of Total Revenue 163 272 220 587 77 162 144 145 % Change, 1977-97 TOTAL, W/O RELIG TOTAL Religion Arts & Culture Civic Social Services Education Health FIELD The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

31. NONPROFIT RESPONSE 1)Overall growth 2)Successful marketing to paying customers 3)Successful pursuit of public funds The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

32. GROWTH OF NONPROFIT REVENUE FROM GOVERNMENT, BY SUBSECTOR, 1977-97 42 37 0 9 5 51 21 48 Share of Rev. Growth, 1977-97 31 27 33 37 19771997 42 19 52 30 10 0 0 12 50 54 18 32 Share of Total Revenue 195 0 214 8 200 94 248 % Change, 1977-97 TOTAL, W/O RELIG TOTAL Religion Arts, culture Civic Social Services Education Health FIELD The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

33. NONPROFIT RESPONSE 1)Overall growth 2)Successful marketing to paying customers 3)Successful pursuit of public funds 4)Revolution in charitable fundraising The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

34. THE REVOLUTION IN CHARITABLE FUNDRAISING Emergence of the fundraising profession New technologies AFP: 20,000 members New actors Telephone solicitation, e-philan. Donor-advised funds The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

35. NONPROFIT RESPONSE 1)Overall growth 2)Successful marketing to paying customers 3)Successful pursuit of public funds 4)Revolution in charitable fundraising 5) Venture activity The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

36. VENTURE ACTIVITY Museum stores Traveling exhibitions University licensing arrangements Hospital purchasing consortia “Social ventures” The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

37. NONPROFIT RESPONSE 1)Overall growth 2)Successful marketing to paying customers 3)Successful pursuit of public funds 4)Revolution in charitable fundraising 5)Venture activity 6)Adoption of market culture 7)New business partnerships 8)Sector infrastructure 9)Surviving competition The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

38. % Nonprofit % Change in 1982 a 1997 b Relative N/P Share Employment Child day care 52 38 -27% Job training 93 89 -4% Individual and Family services 94 91 -3% Home health 60 28 -53% Kidney dialysis centers 22 15 -32% Facilities/Enrollment Dialysis centers 58 a 32 -45% Rehabilitation hospitals 70 a 36 -50% Home health agencies 64 a 33 -48% Health Maintenance orgs. 65 a 26 -60% Psychiatric Hospitals 19 a 16 -16% Hospices 89 c 76 -15% Mental Health Clinics 64 b 57 -11% Higher Education Enrollments 96 d 89 -7% Nursing Homes 20 b 28 +40% Res. Treatment facilities for children 89 b 68 +22% Acute Care hospitals 58 a 59 +2% NONPROFIT and FOR-PROFIT ROLES IN SELECTED FIELDS, 1982-1997 The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

39. NONPROFIT RESPONSE 1)Overall growth 2)Successful marketing to paying customers 3)Successful pursuit of public funds 4)Revolution in charitable fundraising 5)Venture activity 6)Adoption of market culture 7)New business partnerships 8)Sector infrastructure 9)Surviving competition 10) Growing political effectiveness The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

40. THE RISKS Growing Identity Crisis Increased Demands on Nonprofit Managers Threat to Nonprofit Missions Disadvantaging Small Agencies Potential Loss of Public Trust The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

41. RESETTING THE BALANCE The Distinctiveness Imperative The Survival Imperative The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

42. THE DISTINCTIVENESS IMPERATIVE Rethinking community benefit Improving public understanding From organizational to activity exemptions The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

43. THE SURVIVAL IMPERATIVE Capitalizing the sector Buy-in by third-party payers Shift to a “tax credit” system The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)

44. “It has been said that the quality of a nation can be seen in the way it treats its least advantaged citizens. But it can also be seen in the way it treats its most valued institutions.” Lester M. Salamon State of Nonprofit America, 2002 CONCLUSION The State of Nonprofit America Source: Lester M. Salamon, ed., The State of Nonprofit America (Published by the Brookings Institution Press in collaboration with Aspen Institute, Washington, DC, 2002)