The nonprofit sector is a cornerstone of American society, the embodiment of the right to freely associate, and to meet shared goals outside of the government sphere. Despite their profound impact and extensive contributions, nonprofits are again facing government scrutiny following a growth period.
It is important to consider legitimate concerns among lawmakers regarding organizations that violate existing laws, particularly those tied to hostile foreign governments or terrorist groups. As solutions to these concerns are considered, lawmakers should avoid applying a broad-brush approach to the charitable sector that could inadvertently harm the vast majority of organizations doing remarkable work in their communities.
Since 2000, the number of nonprofit organizations in the U.S. has grown by 36 percent. Nearly 60 percent of the growth in 501(c)(3) organizations from 2002 to 2022 is due to an increase in human services and public and social benefit organizations.
Employment in the 501(c)(3) sector grew by more than 30 percent between 2002 and 2022. Over half of nonprofit employment growth can be attributed to nonprofit health care employment, which grew from 5.3 million to nearly 6.9 million during this period.
Despite common misconceptions, only around 2-4 percent of 501(c)(4) organizations engage in political activity and/or policy advocacy. The most common types of 501(c)(4) organizations are community service, sports associations, volunteer fire departments, homeowners’ associations, or veterans’ organizations.
Growth of the Nonprofit Sector: More Charities, Better Solutions
