As mission-driven, tax exempt organizations, nonprofits educate, inspire, revitalize, and build our communities. North Carolina nonprofits also have a powerful impact on North Carolina's economy. (Download the report)
See the breakdown of total nonprofits, expenditures, employment, and annual wages by NC county and region.
The definition of 'nonprofit corporation' is broad, and its distinct categories rely on information from IRS Form 990. Nonprofits that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code must operate for the public benefit, i.e. achieve specific charitable, religious, educational, scientific, or literary purposes.
There are about 37,000 charitable nonprofits operating in North Carolina. They are food banks, museums, senior centers, houses of worship, schools, theaters, research facilities, animal shelters, health clinics, housing assistance centers, transportation providers, and much more.
Most Nonprofits Are Very Small
North Carolina has 11,500 organizations that are 501(c)(3) nonprofits with annual revenues over $50,000. Hospitals and private colleges and universities comprise only about 1.5% of these nonprofits but account for just over half of nonprofits' $51 billion in spending.
Nonprofits' Revenue Sources Are Varied
Nearly half of the sector's overall revenue comes from private fees for services like private schools, museums, health clinics, children's daycare, and senior care; one-third comes from government grants and contracts; only about 9% comes from individual and corporate contributions, even though these are the primary source of funding for many nonprofits.
Source: National Council of Nonprofits, 2019, www.nonprofitimpactmatters.org
However, Nonprofits Struggle with Skyrocketing Needs
86% of NC nonprofits saw more demand for their services in 2018 but only 43% were able to meet the demand. Economic stress, population growth, and social problems cause more people to seek help at food banks, crisis assistance centers, homeless shelters, and consumer credit counseling services. (Nonprofit Finance Fund, https://nff.org/learn/survey)
And Nonprofits Are Seeing Less Funding and Charitable Giving
The federal tax law changes that took effect in 2018 mean that fewer than 10% of North Carolina taxpayers now use the charitable deduction, down from over 30% in 2017. Nationally, tax-deductible charitable contributions declined from $160 billion in 2017 to $103 billion in 2018. While overall giving was down 3% in 2018 (when adjusted for inflation), 30% of NC nonprofits said they expected bigger declines in giving in 2019.
Nonprofits Are Not Evenly Distributed Across North Carolina
The Triangle (more than 3,000 nonprofits) and Charlotte (more than 2,500 nonprofits) have the most nonprofits of any region, while northeastern NC (about 400 nonprofits) has the fewest. The Durham-Chapel Hill, Winston-Salem, and Asheville areas all have at least 10 nonprofits for every 10,00 residents. Fayetteville and Jacksonville - the two NC cities with large military populations - are among the 10 cities in the country with the lowest number of nonprofits per capita. Total nonprofit employment and spending is greatest in the Triangle and Piedmont Triad regions.
Nonprofits and State Taxes
While 501(c)(3) nonprofits are exempt from paying certain federal, state, and local taxes, nonprofits contribute significantly to public services by paying a variety of taxes and fees. Charitable nonprofits contribute more than $1.1 billion per year in state taxes and fees that help support public education, access to healthcare, public safety, and other essential government services. These taxes and fees far exceed the estimated $700 million in foregone state revenue from nonprofit tax exemption and tax incentives for charitable giving.
501(c)(3) nonprofits and for-profit businesses are both private organizations but have fundamental differences that set them apart.
For more information, contact David Heinen, Vice President for Public Policy and Advocacy, 919-790-1555, ext.111 (office), 919-986-9224 (cell)