The Link Between Location and Nonprofits

Governing recently did an analysis on where nonprofits are the most prevalent. This review helps us to better understand the nonprofit and government ecosystem. Nonprofits often fill a void by providing a service that the government is unable to provide. Additionally, nonprofits may provide supplemental service to fill gaps that the government cannot fully fill. Moreover, nonprofits may also provide services in areas where people do not want the government involved. Communities have varying relationships with nonprofits and these relationships may depend on a number of factors. Governing reviewed the 2018 IRS filings published by the National Center for Charitable Statistics and found several notable trends.

  1. Legacy Nonprofits: Nonprofits tend to be concentrated in areas where philanthropy and wealth have been generated over time and led to established institutions. The northeast and industrial Midwest tend to have more developed philanthropic and nonprofit networks. Capital cities also tend to have a higher concentration of nonprofits due to their proximity and relationship to government.
  2. Economic Centers: Industrial centers that have experienced economic depression tend to have stronger nonprofit sectors as they are helping the government address issues. Nonprofits can be nimble and step up services during periods of economic hardship. For instance, Detroit, after its 2013 bankruptcy, saw 56% of local nonprofits increase services.
  3. Disadvantaged Neighborhoods: Nonprofits tend to have increased activity in disadvantaged neighborhoods. A 2015 Urban Institute analysis found that areas with higher poverty rates tended to have more community-oriented nonprofits.
  4. Government Relationships: American University researchers found that the more positively citizens felt about their government services, the more likely they were to seek services from nonprofits. This suggests that positive perceptions of local government could have a halo effect on the nonprofit industry.

Larger icons represent more metro area nonprofits per capita.

Nonprofit and local governments are connected with funding, perceptions of services, and economic history having an impact on the presence and relationship between these two ecosystem partners. Recognizing these trends will help you better understand the complementary role local governments and nonprofits play in providing services to communities.

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Evan Piekara

With over twelve years of experience consulting and working in the government and nonprofit sectors. Evan started his nonprofit career as a member of Teach For America (TFA), where he served as a teacher, volunteer, and in operational support and training roles for the organization. He has supported BDO Public Sector in the launch of their management consulting practice and has provided strategy and operations, human capital, and information technology support to government and nonprofit clients. At BDO Public Sector, Evan led efforts building internal practice recruiting processes including interview questions, cases, and candidate evaluation criteria and developed their Graduate Advisor internship program.