Philanthropy and Nonprofit Organizations

The IRS, the U.S. Bureau of Labor Statistics and numerous universities and think tanks that study the sector do lump nonprofit organizations into several different categories largely based on approach and purpose. The most common categories used are health, education, social or human services, religious, civic and advocacy, international relief and development, arts and culture and funders. It's a crude kind of taxonomy and definitely not infallible, since many nonprofits fall into more than one category. (The IRS and Bureau of Labor Statistics use a more complicated classification system to capture specific information about the number and kinds of nonprofits; for instance, they try to determine how many community hospitals there are or how many nonprofit theater groups.) But organizations that exemplify one category or another do share with one another characteristics in size, infrastructure, and to some extent, the kinds of people who work there.

Here's a bit more information about the kinds of groups in each category that might help you make some decisions about where you would like to work. Again, the descriptions here are very general and cannot be applied to every organization in any particular category. Moreover, no one kind of nonprofit has cornered the market on efficiency and dynamic leadership, nor mismanagement and dysfunction.

Health organizations

Health organizations--such as hospitals, clinics, nursing homes, hospice facilities and drug rehabilitation centers--take up the largest piece of the nonprofit pie, in terms of revenue, expenses and the number of people they employ. According to the latest version of the Nonprofit Almanac published by the Urban Institute, more than half the revenue earned by or contributed to the entire nonprofit sector goes to organizations providing health services. Perhaps because of their relative wealth, or the demands of physicians, salaries at health organizations (especially hospitals) tend to be among the highest in the nonprofit world. Along with healing the sick, health organizations nurture extensive bureaucracies to deal with stringent state and federal regulations, concerns about patient privacy and the need to navigate complicated health insurance programs--including Medicare and Medicaid--which provide the lion's share of revenue. So as a fundraiser, you are just as likely to work with a hospital administrator of some sort as you are a doctor or nurse. In some health organizations, politics may go hand in hand with treatment of the sick; hospital associated with universities will have interns, residents and researchers vying for the best residencies, teaching and administrative positions. You may also see different departments at a hospital competing with one another for funding, especially for clinical research. Facilities focused on community health (including hospice care and community hospitals) are known to have warmer, friendlier environments. It's important to remember that even if you are squirreled away in the administrative offices as a fundraiser, sickness and death will be a part of your everyday existence. Some find that fulfilling; others find it depressing.

Educational institutions

Primarily universities, colleges, and private, independent schools (meaning those that are not part of the system of public schools), educational institutions are the second-largest category based on revenue and employment. For the most part, universities and schools rely heavily on tuitions, as well as funding from individuals, foundations, and state and federal agencies. Schools are also among the oldest American nonprofit institutions; indeed Harvard University, which was founded in 1638, is considered to be the first nonprofit in the U.S. Thus many schools have a strong sense of history which staff and alumni are rather proud of. There is, however, a big difference in the size, infrastructure and organizational culture between a university and an independent school. Universities are large (employing hundreds of people), hierarchical and extremely political places, exacerbated by the fact that professor/scholars tend to have strong personalities. So associate professors jockey for tenure, tenured professors squabble among themselves about their scholarly pursuits and publishing opportunities and different departments fiercely compete for dollars. Given their size and the myriad demands for resources, universities maintain large fundraising programs with well-paid staff. Independent schools--ranging from Montessori to Catholic to boarding--are considerably smaller. Some mimic universities in style and structure, but most are far less formal. Fundraising teams are also small with as little as two staff. Salaries are also considerable smaller than at universities. Many independent schools have religious affiliations, which as an employee you may be expected to uphold. Both universities and independent schools focus most fundraising activities on alumni, and there may be opportunities to meet distinguished former students who have gone on to Hollywood or politics. Most fundraisers for schools and universities find interactions with students, parents and alumni to be the best part of their jobs.

The social or human service category

This category encompasses a broad array of groups that provide resources and services for the disabled and disenfranchised, including legal aid societies, housing assistance programs and homeless shelters, soup kitchens, job training centers, child welfare groups, day care operations, immigrant assistance organizations, rape crisis centers, and mental health counseling facilities, among many, many others. While this class of nonprofits places third in terms of total revenue for the sector, the sheer number of such groups far exceeds any other category. As a result, many scholars in the nonprofit field describe social service agencies as the face of the nonprofit world, the kind of group that most people think of when they hear the word "nonprofit." The size and scope of work for these organizations is extraordinarily diverse, ranging from The Salvation Army's multi-faceted programs for the poor to a soup kitchen. Most social service operations heavily rely on state and federal funding, either through grants or contracts and are therefore subject to myriad regulations from those for food preparation to client privacy. Social service agencies must also wrestle with establishing rigorous and somewhat cumbersome self-evaluation processes, since many government agencies and private foundations award contracts and grants based on performance. This is an issue that the entire nonprofit sector contends with, but it's a particular challenge for social service groups because of their heavy reliance on public funding. Moreover, the United Way (a major funder for social services groups) also requires that its beneficiaries establish benchmarks and performance outcomes. Aside from organizations like the Salvation Army, Catholic Charities or the YMCA, most social services groups are small and lean without much of infrastructure beyond what is required of them by state agencies and the federal government. As a result, fundraising teams are often small and are not paid top dollar. As a fundraiser, you are most likely to work with social workers and clinicians, who are generally a compassionate and caring bunch. They are not, however, necessarily very educated about or interested in fundraising.

The category of religious organizations

Congregations of various religious sects (Christian, Muslim, Jewish, Buddhist, etc.) and any denominations or associations under which congregations may organize constitute the category of religious organizations. There are many hospitals, schools, social services agencies and advocacy groups with religious affiliations (such as the Salvation Army or Catholics for Free Choice), but these organizations fall under the category of the cause that they serve or the assistance they provide. The primary purpose of a congregation is to offer religious guidance and education to the individuals that belong to it, while denominations are regional or national associations that provide additional leadership and support services to individual congregations. It is important to note that a congregation in any given community may be completely independent from a particular denomination. While there are a few large congregations with several paid staff (including fundraisers), most are very small and run entirely by volunteers, aside from the priest, pastors, ministers, rabbis, etc. providing religious instruction. Likewise, any social services that a congregation provides (such as clothes or housing to the needy) are almost entirely volunteer operations. And as you would expect, congregations are almost entirely reliant on donations from its members. There are therefore few opportunities to work for a congregation or denomination as a professional fundraiser. However, there are many opportunities with other nonprofit organizations with religious ties. As you would expect, the character of congregations and denominations is determined by the structure and culture of the faith, the religious leadership and the individual members.

Civic and advocacy organizations

These organizations comprise a relatively small (in terms of revenue and number of people they employ) category of nonprofits focused on changing policies around a particular issue or problem. Such prominent groups as the Sierra Club, National Organization for Women, American Civil Liberties Union, National Association for the Advancement of Colored People, American Association of Retired People and the Christian Coalition fall into this category, as well as a range of smaller groups focused on specific issues in their communities. Generally these groups engage in four basic activities: (1) educating and organizing people to engage their local policy-makers (county commissioners, state agencies, Members of Congress, etc); (2) generating interest in an issue with the media; (3) analyzing changes in policy and educating the general public on their impact; and, (4) directly advocating for policy changes with local, state and federal officials. Many of these groups are centered in major metropolitan areas near seats of government. As you would expect, the largest groups have headquarters in Washington, D.C. Advocacy organizations are not political action committees or private lobbying firms, and as public institutions are subject to strict regulations regarding direct lobbying of policy-makers. Most receive very little support from government agencies. Rather the major sources of funding are individuals, corporations and foundations (although foundations have requirements on what kind of advocacy activities they can support). The largest advocacy groups will pay top-dollar for experienced fundraisers; smaller groups in communities often employ one fundraiser who relies heavily on program staff for assistance, especially in foundation relations, proposal development and report writing. Core staff at advocacy groups is usually comprised of some combination of lawyers, public relations and communications specialists, and organizers who tend to be passionate, driven and somewhat aggressive. The pace at advocacy groups can be more intense, especially when Congress and state legislatures are in session. Some find it energizing, while others quickly burn out.

International relief and development groups

Known abroad as non-governmental organizations (NGOs), international relief and development groups focus on activities to improve the quality of life for communities outside of the United States, primarily in developing countries. Groups like the American Red Cross and Oxfam provide immediate, direct relief in the wake of war and natural disasters, while other groups devote time and energy to education and building local economies. This category of nonprofits also includes organizations who do not provide direct assistance to communities but peripherally impact quality of life--environmental organizations like The Ocean Conservancy and Conservation International are examples. Most groups also have a dual focus on direct relief activities and advocacy. According to the Nonprofit Almanac, more than 5,000 such groups are incorporated in the United States. The majority of the United Nation's and U.S. government's humanitarian relief funds are funneled through these international groups, which usually have headquarters in Washington, D.C. or New York (to connect more directly to the United Nations), as well as field offices in the countries where they work. Fundraising teams usually work from headquarters with opportunities to travel abroad. Like advocacy groups, the largest of the international relief agencies will pay their fundraising staff well. Since there's a heavy reliance on government funding, there's also a heavy focus on proposal and report writing, so fundraisers are usually strong writers. The rest of the staff is usually comprised of policy experts from the U.S. and abroad with field staff who are largely from the country in which they are working. The work is rewarding, exciting, dangerous and stressful. In some countries, field staff are at considerable risk from terrorism and civil strife, and most are used to living without much luxury. With a truly global workforce, cultural difference is a challenge, especially in navigating different communication styles.

The category of "arts and culture" organizations

These organizations include community and professional theaters, dance companies, nonprofit art galleries and museums, orchestras and symphonies, literary and cultural magazines, as well as a range of arts appreciation groups. While there are almost as many arts groups in the country as there are in health care, the arts community is far less wealthy. Revenue to health care groups is in fact 25 times greater than what goes to the arts. Salaries are therefore considerably smaller at arts organizations, although there are many cases where a development director is paid more than the artistic director. Most revenue comes from ticket sales, so marketing and audience development is an important concern and a constant challenge. Arts groups in fact are always looking for ways to engage new constituents, especially the Generation X'ers who have accumulated some wealth by now (largely through the dot-com boom). Art organizations also tend to work in close partnership with schools to support arts education programs. They also try to foster relationships with corporate interests that see a variety of opportunities to elevate their profile through the arts. Most arts groups struggle to keep qualified and experienced administrative staff because of the lower salaries, long hours (especially when working for a performance group) and the strong temperament of artistic directors and boards. It is not at all unusual for highly public and bitter fights to break out between boards and organizational leadership over the artistic direction of an organization. That said, the passion, dedication and talent of artists involved with these organizations is intoxicating.

Grant-giving organizations

Like private foundations and federated charities, grant-giving organizations fall into the "funders" category. These groups generally do not engage in any other activity other than giving away money, although there are exceptions, such as the Pew Charitable Trusts, which provides grants and is also involved in advocacy work. While private foundations like the Ford Foundation are the most commonly known, there are in fact a variety of nonprofit organizations that function as grant givers. Federated charities are organizations that collect donations from individuals and distribute them to a chosen group of nonprofit organizations. Those charities that wish to receive funds usually go through an application process to demonstrate that they are legal and viable nonprofits. Most people are familiar with the United Way, but there are other such groups, such as Jewish federations and societies that raise funds for research and treatment of diseases--an example is the Leukemia and Lymphoma Society. Investment firms can also establish donor-advised funds that are registered as nonprofit organizations. These funds are comprised of donations from wealthy individuals and are managed by a financial advisor who may either follow the instructions of the donor on which charities to support or may make those decisions on their own. Most community foundations also create donor-advised funds to help donors in any given location be effective in their philanthropy. Like other nonprofit organizations, a board of directors (usually known as the board of trustees) oversees the general direction of grant-giving. A professional staff of financial advisors, policy experts and those with expertise in nonprofit management make day-to-day decisions about how to wisely invest the pool of funds and how to distribute grants. Like the rest of the nonprofit sector, there are far more small family foundations and donor-advised funds run by one or two staff than large, professional foundations run by many. The larger foundations and federated charities generally pay well and provide rather generous benefits. Jobs at foundations are among the most competitive in the fundraising and philanthropic giving field.