Arizona’s nonprofit sector is an economic force to be reckoned with, according to a report by the Arizona Community Foundation.
The Verde Valley Regional Economic Organization and other local organizations hosted an overview of Arizona Nonprofits: Economic Power, Positive Impact, June 1 at Yavapai College Verde Valley Campus. The first of its scope, the report outlines how much the nonprofit sector contributes to the state’s economy. It is based upon data received from 3,000 of the state’s 21,000 nonprofits.
Anthony Evans, a senior research fellow at the L. Seidman Research Institute and Arizona State University’s W.P. Carey School of Business, presented the material. He said this research effort differed markedly from recent economic impact studies which he had taken part in, such as one that evaluated the benefits and detriments of the Super Bowl upon city and state economies.
“This is a little unusual for us,” Evans said. “Nonetheless, I think it’s very, very important …. It’s a key to opening up conversations.”
He outlined the three findings he and fellow researchers felt were key to understanding the impact of the nonprofit sector:
- Arizona’s nonprofit sector generates about 8 percent of the state’s gross state product.
- Nonprofits are the state’s fifth-largest non-governmental employer.
- More than 70 percent of nonprofit revenue is generated by earned revenue, fees for services and government contracts, and not from philanthropic contributions.
“In 2014, the nonprofit sector contributed more than $22.4 billion to Arizona’s gross state product, positioning its contribution on par with the state’s entire retail trade,” the report reads. “Arizona’s 21,137 registered nonprofits collectively generated approximately $28 billion in revenue, approximately on par with the annual revenue generated by the construction sector in the state.”
According to Evans, the state’s nonprofits hold assets in excess of $48 billion and are responsible for 325,000 jobs. Employment in the sector grew by 12 percent during the 2009-14 period, with wages growing 12.7 percent during that time. By 2014, 1 in every 16 jobs in the state were nonprofit, accounting for 7.7 percent of the total direct non-governmental employment.
Evans said that the largest categories within the state’s nonprofit sector are human services at about 24 percent, public and social benefit services at 20 percent, followed by religious-based services at 19 percent. Education services accounted for 12 percent while hospitals accounted for less than 1 percent.
Education services are currently the fastest growing category among nonprofits, at 22 percent during the 2009-14 period.
Yavapai County nonprofits account for 5.7 percent of the state’s nonprofits, at 1,201 registered organizations.
“After reviewing the data from our research, it is clear that Arizona’s nonprofits are a force to be reckoned with,” the report reads. “Any sector which contributes 8 percent of the state’s gross state product and is the fifth-largest non-government employer in the state must be taken seriously.”
