Arizona Nonprofits Generate $22 Billion Annually, Study Finds

Although Arizona's growing nonprofit sector is an important economic driver for the state, large hospitals account for the lion’s share of the sector’s assets, jobs, and revenue, with cultural, environmental, and smaller charities having far less impact, the Arizona Republic reports.

Scheduled for release in early March, a study funded by the Arizona Community Foundation, APS, and the Industrial Development Authority of Maricopa County and conducted by Arizona State University's Seidman Research Institute, in partnership with the Alliance of Arizona Nonprofits, ASU Lodestar Center for Philanthropy & Nonprofit Innovation, and the Phoenix Philanthropy Group, found that the state's nonprofit sector contributes an estimated $22.4 billion to the state's economy annually, employs more than 324,000 people, and generates at least $2.1 billion in annual sales, payroll, and property taxes. The report, Arizona Nonprofits: Economic Power, Positive Impact, also found that while hospitals and other healthcare organizations comprise only 6 percent of the state’s roughly twenty-one thousand nonprofits, they account for 43 percent of the sector’s assets, 56 percent of its jobs, and 62 percent of its revenues. Bolstered by those healthcare organizations, the nonprofit sector in the state has recovered significantly from the recession, with employment rising 12 percent and wages 12.7 percent between 2009 and 2014.

Based on Form 990s filed by some three thousand of the largest nonprofits in the state and data provided by six hundred others, the report also found that Arizona nonprofits derive the bulk of their revenue from government contracts, service fees, and the sale of goods and services, while gifts and charitable donations account for just 27 percent of revenues. "Gone are the days of viewing nonprofits as simple charities operating on shoestring budgets, heavily reliant on volunteers and donations to stay afloat," said Arizona Community Foundation president and CEO Steve Seleznow.

While many nonprofits clearly continue to struggle, Seleznow told The Republic he senses that the sector is becoming more professional, entrepreneurial, and resourceful in finding new revenue sources and defraying costs through partnerships. "They're showing an ability to sustain themselves," said Seleznow. "They have worked through difficult times."