Nonprofit Doesn't Mean what you Think it Means

If you have ever heard me speak you likely heard me say something along the lines of “nonprofits are kind of a big deal.” And I mean it, we are. 

Read our 2017 Economic Impact Report and you will soon learn that the nonprofit sector is responsible for nearly 56,000 jobs in Idaho.  

Nonprofits generate over $3 billion in total compensation.  

Nonprofits are the 6th largest employment sector. In fact, we are larger than construction, professional/technical services, wholesale trade, crop & animal production, finance & accounting, and transportation & warehouse.

​Nonprofits generate an additional $5.19 billion in sales transactions, almost $3 billion in gross state product, and an additional $2.27 billion in total compensation. These are NOT jobs in the sector, these are created as a RESULT of nonprofits.  

Nonprofits rely on volunteers to fulfill their mission. Over 34% of Idaho’s labor force volunteers. If nonprofits could compensate these volunteer positions it would create another nearly 26,000 jobs and an additional $1.3 billion in total compensation.

​When I say we’re a big deal, I’ve got the data to back it up. But I want to go beyond the numbers and share some potentially controversial thoughts with you. I mean this column to be a bolster, not a debate.

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First of all, I want us to stop apologizing for paying people to do the work that needs to be done to fulfill our missions. I want us to grow our savings account without shame. Did you know that the word nonprofit appears exactly ZERO times in the IRS guidelines for 501(c)3 charitable organizations? Click here for a quick read to learn more.

The term nonprofit, really and truly and simply, means that excess revenues can only go towards the organization’s exempt purposes. For example, staff salaries to do the work that needs to be done, an endowment fund for sustainability, and purchasing needed equipment to support furthering the mission of the organization. These can all be considered exempt purposes.

Secondly, did you know that nonprofits are actually classified as small businesses and under the purview of the Small Business Administration? Visit the SBA website to find all kinds of information! Nonprofit start-ups can also access free business counseling & resources provided through SBA offices statewide. And established organizations can access an entire section for nonprofit counseling through SCORE (previously known as Service Corps Of Retired Executives). 

I point these things out because not only are we nonprofits a big deal, an economic engine in our own right, AND small businesses, but all of these things point to something I want to say to each and every one of us: we all need to operate profitably whenever possible.  

I’m giving you permission to loudly and proudly share when you do more than just meet your budget. What you are doing when you operate in “the black” is ensuring that your organization has the ability to remain “in business” for the long haul.  
If you’re not yet in a position to operate in the black every year, that’s OK too. Just know that you don’t have to apologize when you do and you can budget to remain profitable each and every year.  

If you need help, turn to the Idaho Nonprofit Center as a resource. We have tons of opportunities for you to learn how to write grants, develop funds, and become a sustainable organization.

​We’re here for you. We support you. As a nonprofit ourselves, we understand the funding and budgeting challenges nonprofits face. Remember, all of us nonprofit/charitable organizations are really and truly a VERY BIG DEAL.

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In the spirit of lifting our sector up as a whole and sharing all the amazing ways we contribute to the quality of life we enjoy, November is Nonprofit Awareness month! We will be celebrating nonprofits in a variety of different ways so please read through CenterView to learn more about how you can be involved.