Prepared for
Michigan Nonprofit Research Program

Produced by Public Sector Consultants and Published by the Michigan Nonprofit Research Program, this study highlights the Michigan nonprofit sector’s contributions to the state’s economy. Findings include information on the number of nonprofits, assets, expenditures, employment data and more.

Introduction

State economies are driven by three sectors: public, private, and nonprofit. Enormous amounts of data and information are collected about the private and public sectors. Various governmental bodies, private organizations, and trade associations attempting to promote these sectors collect data regarding their employment and economic impact. Few data are collected about the nonprofit sector, placing this sector at a comparative disadvantage during discussions concerning economic activity, output, and, most importantly, impact. This disadvantage becomes crucial during the government appropriations process. Nonprofit organizations are often commended for their contribution as a “safety net” providing valuable services to a state’s residents, but rarely are these organizations cited for the contributions they make to a state’s overall economic vitality and success. The general failure to recognize the economic benefits of nonprofits means that key decisions regarding the growth and support of this sector are being made without complete information. By commissioning this report, the Michigan Nonprofit Research Program seeks a basis upon which to document the economic contribution of Michigan’s nonprofit organizations. This information will allow these organizations to identify and promote the significant economic benefits that they generate.

Highlights

Michigan’s nonprofit sector generates significant economic benefits for state residents. It is both geographically diverse, with organizations in every county of the state, and operationally diverse. Michigan’s nonprofits can be found in every subsector of the service economy, including a strong presence in health care, human services, education, and the arts.

Public Sector Consultants conducted an analysis of the economic benefits of Michigan’s nonprofit sector in April 1999, using the most recent available data (which was for 1997). Since then, Michigan’s nonprofit sector has grown considerably. In the four years between the studies, Michigan’s nonprofit sector has recorded an addition of 6,000 nonprofit organizations and increased its assets by almost $20 billion.

It should be noted that this report is based on the most recent data available from the Internal Revenue Service and National Center for Charitable Statistics at the time of writing, which was from 2001. Since then the national economy and Michigan’s state economy have faced the effects of recession, the subsequent lag in growth, and—most recently—the early stages of an economic recovery. Thus, Michigan’s nonprofit community may currently be facing tougher financial times than the numbers in this report reflect.

This report documents that Michigan’s nonprofit organizations:

  • Number over 41,000; of these, 21,109 were public charities. The number of organizations that filed IRS 990 forms is 13,478; of these, 7,257 were public charities
  • Employ directly more than 315,000 people
  • Generate an additional 135,000 jobs as a result of spending by the organizations and their employees
  • Hold assets of over $80 billion
  • Receive more than $44 billion in revenue
  • Generate more than $35 billion in personal income
  • Generate nearly $69 billion in total economic activity
  • Have grown faster than the state’s overall economy (an increase in reported 501(c)(3) expenditures of almost 39 percent from 1995 to 2001, compared to a 26 percent increase in gross state product)

About the Sponsors

The Michigan Nonprofit Research Program supports research to improve the understanding of Michigan’s nonprofit sector. The program encourages research that will inform and improve the efficiency and effectiveness of Michigan nonprofits, funds high-quality research vital to the development of the sector in Michigan, disseminates the results of research back to the sector through publications and meetings, and seeks to inform public policy related to Michigan’s nonprofit sector. The program is a partnership of the Aspen Institute Nonprofit Sector Research Fund, the Dorothy A. Johnson Center for Philanthropy and Nonprofit Leadership at Grand Valley State University, and the Michigan Nonprofit Association. The program is currently funded by a grant from the W. K. Kellogg Foundation.

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