Author: Salamon, Lester M. and Abramson, Alan J.

Publication Year: 1981

Media Type: Book

Summary:

Private nonprofit organizations play a vital role in American life. However, these organizations are too often overlooked in public policy discussions. This monograph provides important new data on the scope and structure of the nonprofit sector, the relationships between this sector and government, and the likely impact on it of the budget proposals advanced by the Reagan administration in 1981 and 1982 and partly enacted by Congress.

Abstract:

A publication from the Nonprofit Sector Project of the Urban Institute.

Private nonprofit organizations play a vital role in American life. However, these organizations are too often overlooked in public policy discussions. This monograph provides important new data on the scope and structure of the nonprofit sector, the relationships between this sector and government, and the likely impact on it of the budget proposals advanced by the Reagan administration in 1981 and 1982 and partly enacted by Congress. Among the principal findings of this work are the following:

Hospitals, universities, social service agencies, neighborhood organizations and other private nonprofit organizations stand to lose $33 billion in federal support over FY 1982-85 under the Reagan administration's most recent proposals. These reductions occur at a time when the federal government is reducing its own activities in the fields where nonprofit organizations are active by $115 billion, thereby increasing the need for nonprofit services.

Most hard hit by these changes will be nonprofit social service agencies and community organizations, which will lose one-fourth to one-third of their total revenues as a result. Also affected significantly will be educational and research institutions. These revenue losses reflect the fact that private nonprofit organizations are extensively involved in the running of public programs and the delivery of services financed by federal funds. In fact, private nonprofit organizations now receive a larger share of their total revenues from the federal government than from all of the private giving combined, including giving by individuals, corporations, and foundations ($40.4 billion vs. $25.5 billion in 1980). As a result the same cutbacks in federal activity that increase the need for non-profit services also reduce the revenues nonprofit organizations have available to serve even existing needs.

To offset this lost federal revenue and permit nonprofits to maintain their 1980 service levels, private giving would have to grow over the next four years by 30 to 40 percent a year or three to four times faster than it has over the past several decades. To close the entire public service gap left by the $115 billion reduction in federal activity in fields where nonprofit organizations are active, private charitable giving during FY 1982-85 would have to grow by 90 to 100 percent a year - eight times faster than the highest growth rate it has ever achieved.

Private nonprofit organizations constitute a vital part of the nation's service delivery system. They account for much of the health care, cultural life, civic action, research, social services and higher education provided in this country. They serve as the principal mechanism for channeling private charitable resources into the solution of community problems. In 1980, these organizations had revenues totaling $116.4 billion. Of this total, approximately 22 percent came from private contributions and about 35 percent from federal government sources.

Although Congress has modified the budget proposals for FY 1982-85 advanced by the Reagan administration in February 1982, these modifications retain the basic structure of the budget program proposed by the president in the areas of principal concern to nonprofit organizations. Based on preliminary information available to date, Congress appears to be in agreement with the administration with respect to 75 percent of the cuts proposed in these particular programs.

CONTENTS
Preface.
About the authors.
Summary of principal findings.

1. Introduction:

Objectives.
Structure of this presentation.
Caveats.

2. The nonprofit sector - An overview:

Scope and structure of the charitable service sector.
The private philanthropic base.
Summary.

3. The Federal budget and the need for nonprofit services:

Federal activity in fields where nonprofits are active.
The impact of the Reagan budget.
The implications for nonprofit providers.
Conclusion.

4. The Federal budget and nonprofit revenues:

The background - The origins and scope of nonprofit federalism.
The impact of the Reagan budget on nonprofit revenues.
The implications for nonprofit organizations.

5. The challenge to private giving:

Private giving and the need for nonprofit services.
Private giving and the revenues of nonprofit organizations.
Conclusion.

6. The budget changes in detail:

Social service organizations.
Community development organizations.
Education and research organizations.
Health care organizations.
Foreign assistance organizations.
Cultural organizations.

7. Epilogue - Congressional action on the FY 1983 budget: The first budget resolution.

Appendix:
     A. A layman's guide to budgeting.
     B. Grouping of IRS activity codes for use for analysis of the scope of the nonprofit
         sector.
     C. Current-dollar counterparts to tables 6, 7, 13 and 14.

Arts & Intersections:

Categories: Funding