A few years ago, The Economist made a poignant remark. They said the United States is, in essence, an “NGO with nuclear bombs”. Upon reading this, I stopped to ponder their assertion. The two concepts, that of a non-profit organization and that of an institution bearing tools of destruction, seemed irreconcilable. Over succeeding days of research, I ruminated on the assertion. I arrived at this conclusion: the Economist’s characterization is both a clever, and factual, assessment.

Though it makes considerable investments in deterrents, the US federal government, alongside state governments, spends an astonishing amount to help others. For example, 1 out of 2 people, throughout the U.S., receives financial aid from the federal government. Within the U.S. – a massive NGO – there is an even greater superpower. Said power is constituted by 1.5 million entities that, each day, champion a better world. I will elucidate how said entities achieves this, and other aspects, below.

  1. There are 1.5 million charities/non-profits in the United States.
  2. Though capitalism and democracy are the hallmarks of American success, thepreponderance of charitable donations, made throughout the U.S., is an equally, colossalfeat.
  3. 1 out of 10 people in the U.S. work for a nonprofit. Further, though it may seem shockingat first to discover, most U.S. hospitals and colleges are nonprofit organizations. The nonprofit sector is the third largest employer in the U.S. Many nonprofit employers, such as Goodwill, the State Universities of New York, and the California Community College system, employ over 100,000 employees.
  4. In almost every major U.S. city, half of the largest employers operating in said areas are nonprofits. In Boston, for example, 20 of the top 25 employers, in the city, are nonprofits.
  5. Last year alone, Americans donated $450 billion to the 1.5 million charities. 70% of the donations came from individuals. The remaining distribution of donations includes: 5% from corporations, 15% from foundations, and 10% from bequests.
  6. The 1.5 million charities billed fees to patients, students, or others, and the revenue they generated was, last year, $700 billion. A chunk of this revenue derived from federal grants and from said institutions charging the federal government for providing health care to the elderly and impoverished.
  7. Collectively, the GDP of the 1.5 million charities is $1.15 trillion. To provide context, said amount is more than the national GDP’s for 185 of the 200 countries existing across the world.
  8. The revenues of the top six charities in the U.S. include: YMCA – $7.7 billion; Goodwill – $6.1 billion; Catholic Charities – $4.4 billion; Salvation Army – $3.8 billion; United Way – $3.7 billion; and Red Cross – $3.6 billion. Almost $30 billion in revenue is generated in the top 6 charities alone. On a separate note, the combined revenue for the 3.6 million nonprofits in India is less than $5 billion.
  9. For your perusal, here is a list of the top 100 charities in the US: NPT Top 100 (2019): AnIn-Depth Study of America’s Largest Nonprofits – The NonProfit Times
  10. The third largest charity in U.S., Catholic Charities, proudly claims on their website, “Next to the federal government, Catholic Charities is the largest US social-safety-net provider”.
  11. U.S. charities are conducting an equal amount of humanitarian work in unison with the assistance federal and state governments perform throughout the nation. Amongst many things, the work they provide includes disaster relief, emergency aid, and providing food for the poor. All these acts, and more, stem from the labor of nonprofits. In most other nations, across the globe, the governing body has to do most of this work. However, the nonprofit ecosystem, which has flourished in the U.S. over many years, bears, in part, such a responsibility.
  12. There is simply no better ecosystem than this: an individual makes a money donation to a nonprofit; the federal government gives a tax deduction to the donor; the nonprofit hires employees to render services; the nonprofit employee gets a job; and a random stranger, a fifth person, receives the benefit. This system of events occurs without government intervention, government bureaucracy, government waste, politics, corruption, and favoritism. It is, in pure essence, people helping people. This increases the culture of giving, assisting, taking care of one another, taking care of one’s community, taking care of one’s nation, and inculcating a sense of self sufficiency, self-reliance, and self- governance, while evoking self-realization in every single person involved in the process.
  13. All this has created an ethos of giving one’s time, in addition to money. For reference, 3 out of 4 Americans give money to charities. 1 out of 4 people give time to a nonprofit. In 2019, the average volunteer time, per non-profit volunteer, was 137 hours. The value of this time, performed during non-profit volunteer work, was $200 billion.
  14. The $450 billion given, last year, to charities was spent on: religion (30%); education (14%); helping those in need (12%); healthcare (10%); international giving (6%); and art and culture (5%).
  15. Each day of a given year; the 1.5 million charities collectively raise $1.2 billion. In effect, they consistently reach the $450 billion each year.
  16. To reach such a large amount, no stone is left unturned. The charities approach federal and state governments. Foundations are chased, high net worth individuals are courted, corporations are sought after, and both email and letter campaigns are launched. Every facet of outreach is utilized. Endless events of all types are held – from bake sales to walks, runs, lecture series, entertainment events, small get togethers, and big galas. Almost every kid in high school is involved in some form of charitable fundraising. Furthermore, every adult at work is, at one point, approached to make donation(s). On weekends, the religious institutions are particularly fervent in their outreach.
  17. 200,000 people in the country have a job that entails fundraising for a nonprofit. The average salary of these 200,000 individuals is $57,036. Harvard University employs 500 people in their fundraising department.
  18. Harvard University deserves another line. They are the epidemy of what a nonprofit can do for a nation. Founded in 1636 as Newton College, they changed their name to Harvard when John Harvard, who donated $1,285, died soon thereafter. Today, Harvard has $40 billion in their savings account. One third of their annual expenses come from the earnings on this endowment. 21,000 students, 31,000 employees, a million plus graduates, and eight U.S. presidents. Furthermore, 4% of Fortune 500 companies have tens of thousands of C-Suite executives who are Harvard alumni. 70% of Harvard students get financial aid from the university, and they do not pay full tuition. Shockingly, the story has just begun as Harvard recently received over $1 billion in charitable donations.
  19. Despite all of the foregoing, an incorrect sentiment has spread that nonprofits are idle entities. That they sit in their proverbial corners and bide their time. However, it is often forgotten that these non-profits, like all businesses, consume third-party goods and services throughout their operations. They require computers, internet, phone services, building materials, and utilities. Their need for third-party materials generates revenue for companies that make these goods and services, thereby providing added economic stimulation. By providing employees with a source of income, non-profits, just as for- profit institutions, indirectly stimulate endless facets of the U.S. economy. On the whole, when people have money, they spend it. They pay mortgages, utility companies, and car payments. Discretionary income goes to restaurants, theaters, and other luxuries.
  20. In summary, the nonprofit sector of the U.S. is a parallel government. It remains open throughout the year, regardless of holidays, and it remains at work. A great deal of attention, across the globe, is directed to the conduct, international or domestic, of the United States. However, very little attention is directed on the secret superpower of United States – the non-profit sector.

By Navneet S. Chugh The Chugh Firm