Hello out there, JUST CAUSE members! My name is Skye Kilaen, and today I begin introducing you to the wonderful world of nonprofit organizations and the nonprofit sector.

Of course, just about everyone knows about quite a few of nonprofit organizations. Most of us are familiar with at least the American Cancer Society, the Red Cross, the United Way, as well as several local nonprofits. However, you may not be aware of the sheer scope of the nonprofit sector as a whole. In 2006, according to the National Center for Charitable Statistics, there were at least 1,478,194 nonprofit organizations in the United States. Thousands more are formed each year. The organizations that together make up the nonprofit sector are crucial to the economy and the quality of life in our communities.

So while many people know (and love!) a small number of individual nonprofits, I invite you to learn more about how they work and about the role the nonprofit sector plays in our society. Knowing more about what nonprofits do can make us better volunteers, donors, problem solvers, and voters.

Let's look at a few reasons why you might have an interest in nonprofit organizations and the nonprofit sector.

They're everywhere!

Within the 1.5 million and counting nonprofits are hospitals, support groups, chambers of commerce, youth camps, theaters, PTAs, women's shelters, congregations, and hundreds more types of organizations. If you've been to a museum, volunteered at a food pantry, had a baby, adopted a homeless pet, shopped at a thrift store, used Consumer Reports to research a product, or made a donation during Hurricane Katrina, you've probably interacted with a nonprofit.

You're a taxpayer

"Nonprofit" isn't just another word for a company that isn't doing very well. Nonprofit organizations are a specialized type of corporation registered with the IRS. Section 501(c) of the Tax Code controls the tax treatment of these organizations, which is why some people know the term 501(c)(3) as another term for nonprofits.

When an organization is registered as a nonprofit, it gets certain perks. It doesn't have to pay taxes on its income, the way individuals and businesses do. It can also accept donations from individuals and corporations who can then deduct the charitable contributions from their taxable income. Property taxes are lower for nonprofits, and they get a break on postage for mailings above a certain size.

In exchange for this favorable tax treatment, nonprofit organizations solemnly swear that they are making positive contributions to society rather than for private benefit. They beautify public spaces, teach children to read, provide health care, and more. Nonprofits basically strike a deal with the taxpayer. They don't pay taxes, so we all pay a bit more to cover their share. In return, they do provide goods and services that make the world a better place.

So as a taxpayer, you make the existence of nonprofits possible by footing the bill.

It's the economy...

Economic indicators aren't looking so hot right at the moment. Rick Cohen at The Nonprofit Quarterly reminds us how important nonprofits are in a recession. Observing that nonprofits employ more than 7% of the nation's workers, he explains that more funding for nonprofits is a smart move if the economy's in trouble:

Many people debate whether the nonprofit sector should be looked to for its economic impact or simply for fulfilling its charitable mission. But in a recession, pumping money into the nonprofit sector does both—the hiring of many people, particularly in lower income inner city and rural communities and the delivery of critical services to people vulnerable to a rapidly tanking national economy. [...] Pumping money into the nonprofit sector to deliver the services needed to respond to widespread economic distress, that’s a nonprofit sector role in the economic stimulus.

In a recession that leads to higher levels of unemployment, nonprofits will be on the front lines with direct services, job training, and other supports. Nonprofits across the country also offer credit counseling and financial literacy classes for people who are having trouble making ends meet.

Ask me a question!

Why are there so many nonprofits? Do they get results? How do you get involved? Why do they send me so many address labels?

Let me know what you've always wondered about nonprofit organizations, and I'll answer your questions in future blog posts.

[Photograph by Magda Dudek.]