Nonprofit Industry Overview

by | March 10, 2009

Nonprofit is big business

In Australia, there are somewhere around 35,000 nonprofit organisations with paid staff. However, a large majority of nonprofits are volunteer-only, bringing the total to around 700,000 organisations with an estimated $100 billion turnover each year, according to research by Dr. Mark Lyons, a social economics professor at the University of Technology, Sydney. Nonprofits can include a wide variety of undertakings, including international relief outfits, schools, hospitals, funders, religious organisations, arts coalitions and innumerable others. In total, the 30,000 largest nonprofits account for 8 percent of the Australian workforce, according to figures from the Australian Taxation Office.

So where's the money to run these organisations come from? The largest portions come from two areas: the government contributes around 43 percent, while fundraising brings in about 26 percent, according to a survey from research organisation Goodwell. However, this sector, like every other, is highly susceptible to peaks and troughs in the economy. A less buoyant economy is a major threat and has a significant impact on the sector's revenue. Also due to the large number of organisations, one of the biggest challenges nonprofits face is fundraising and drumming up support.

The rewards can be quite satisfying for professionals who succeed in nonprofit. Such positions often come with a tremendous amount of prestige and respect, interactions with a broad array of people from all classes and backgrounds, and at executive levels, a satisfying salary. Many organisations represent the lifeblood of their communities and are in the daily eye of the local public and media -- sometimes even reaching national or worldwide audiences.

Money still matters

Today's nonprofit organisation is a very different institution than it was only a decade ago. In a nutshell, the nonprofit corporate culture has become more professional. An increased emphasis on efficient management has enhanced the sector's approach to program implementation or problem solving through the development of better, more cost-effective strategies for providing services.

Just as important, nonprofit organisations have also greatly improved their approach to cultivating and accessing stronger financial support. Many unpredictable variables impact the national economy, and subsequently, philanthropic donations to nonprofits. The nonprofit/philanthropy field is still learning how to protect itself from financial fluctuations.

One common approach to this challenge is to diversify funding sources. More commonly, however, nonprofits are branching out into other areas of service in hopes of attracting new donors. This is justified as a way of making a more comprehensive impact on a single area of service or issue.

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