Too Small to Matter?

One of IMPLAN’s many uses is to simply quantify the impact of a given industry on its local economy—not a specific firm, but an entire sector.

That's exactly what CalNonprofits and a team of researchers at the University of San Diego did in their 2014 study, Causes Count: The Economic Power of California's Nonprofit Sector.

Some of the study’s findings illustrate the sector’s contributions to California’s Gross State Production (GSP) and the strength of its workforce.

Regarding economic contributions, the study found that nonprofit organizations in California...

• Generate $208 billion in revenue each year and hold $ 328 billion in assets
• Receive nearly $2 billion in grants from California foundations each year
• Generated $37 billion in taxes at the federal and state and local level in 2012
• Bring a minimum of $40 billion into California from out of state each year
• Contribute 15% (1/6th) of the total Gross State Product (GSP)

Regarding the role of nonprofit organizations in the workforce, the study found that nonprofits...

• Employ nearly 1,000,000 people in California across 25,000 nonprofits with paid staff, accounting for 6% of the state's total employment
• Rank 4th amongst the largest industries in California by employment beating out industries like construction, finance, and real estate.
• Provide 1 out of every 16 jobs in the entire state of California.

While these headlining figures are compelling enough, one of the most interesting elements of the study is the detail with which the researchers were able to examine the effects of the sector’s spending. The economic ripple effects of their collective $132 billion in direct goods and services are captured in their study's indirect and induced effects as the study tracks the monies spent by nonprofits and their employees throughout the larger economy.

The study finds that through indirect and induced effects, California nonprofits generate...

• Nearly 800,000 full-time jobs
• Almost $50 billion in employee compensation
• Roughly $128 billion in output

While the study states that California’s nonprofits sector is sometimes perceived as being “too small to matter”, many of its findings suggest the opposite.

Read the full report here.

Nonprofit organizations are always looking for ways to increase their funding. To learn how your organization can do just that, download the white paper, 3 Steps to Increase Your Nonprofit's Funding.