A nonprofit corporation is an organization formed to serve a public benefit, rather than realize a profit from its activities. Nonprofits generally have a literary, health, educational, public safety, scientific, artistic, or charitable purpose; most carry out their activities with donated or grant funds and with volunteer or low-paid staffs. This article, which is excerpted from the 2004-2005 report of the Center for Non-Profit Corporations in the northeastern U.S. state of New Jersey, provides insights into the way that nonprofits operate at the state level throughout the United States.

New Jersey nonprofit organizations play a regular and significant role in our daily experience: Through them, we pursue recreation and hobbies, enjoy the arts, and fulfill spiritual needs. Nonprofits provide care of our children, our elderly, and our needy; they enable access to medical care, the pursuit of education, and the building of community. New Jersey's nonprofit sector is an expression of how we live, what we value, where we turn for pleasure, and where we turn in need. Clearly, the full impact of nonprofit sector activities on our lives cannot be quantified.

But the economic contributions of the sector can be measured. And, collectively, these measures present a profile of significant force in the economic life of the state—an economic force for building a better New Jersey.

What We Are

New Jersey is home to more than 25,000 charitable organizations, including day care centers, clinics, homeless centers, hospitals, faith-based organizations, environmental groups, libraries, orchestras, YMCAs, universities, animal shelters, foundations, and many others serving the public good. Collectively, these 25,000 charities have some $59 billion in assets and more than $41 billion in income.

More than one-sixth of the income for reporting charities comes from public [government sources] support. In 2002, New Jersey's reporting charities received more than $4.7 billion in gifts, grants, and contributions. And New Jersey charities spend a notable amount, much of it inside the state. The total expenses reported by New Jersey's charitable sector in 2002 were in excess of $26 billion.

New Jersey nonprofits employ more than 272,000 workers. In fact, more people work in nonprofits than in the construction industry, more than in transportation and public utilities, and more than in the finance and insurance industries combined.

Along important economic dimensions, New Jersey's charities rank in the top third of all states (Table 1).

As government pulls back from service provision and other funding for civic activities, the nonprofit sector has grown to fill the gap. Between 1996 and 2003 in New Jersey:

• The number of public charities grew by 63 percent.

• The assets of reporting public charities grew by 6 percent.

• The expenses of reporting public charities increased by 50 percent.

• Contributions, gifts, and grants from private and government sources increased by 69 percent.

It is no longer possible to ignore the nonprofit sector's expanding role in New Jersey's social and economic systems.

Who We Are

New Jersey charities touch virtually all aspects of our lives. Although the largest numbers of organizations are in the areas of human services, education, and health, nonprofits pursue a diverse and wide-ranging continuum of purposes, as shown in Table 2.

The New Jersey nonprofit sector is not comprised of large bureaucracies but mostly of community-based groups launched through the passion and creativity of individual people. Although the sector includes a number of big charities, the majority of organizations have yearly budgets of less than $100,000. Not surprisingly, New Jersey's nonprofits are located where there is the greatest population density, but charitable organizations can be found in all corners of the state.

What We Give

The nonprofit sector is the place where the deepest values of a culture can find expression. In charitable giving, New Jersey citizens have demonstrated consistent support for the work of nonprofits, support that continues to expand over the years. In 2002, the itemized income tax deductions for New Jersey taxpayers included more than $5 billion donated to charities, with an average donation of $3,022 per tax return. Since most taxpayers do not itemize their deductions although many give, actual charitable giving totals would be considerably larger. Furthermore, New Jerseyans bequeathed over $392 million to charity in 2000.

Perhaps there is no better evidence of the meaning the nonprofit sector holds in our lives than the substantial tangible and intangible contributions we make through volunteerism.

• More than 25 percent of New Jerseyans volunteer at least once a year with a group of their choice.

• The estimated dollar value of volunteer services in New Jersey in 2002 was $20.55 per hour.

Our Challenges

Along with significant growth and accomplishments, a number of challenges influence nonprofits' ability to fulfill their vital role in society. For much of the nonprofit community, increased need for services, tighter funding streams, and rising expenses have made operations more difficult. In recent surveys, New Jersey nonprofits have identified funding uncertainties, rising demand for services, rising benefit and insurance costs, ability to attract and retain quality employees, and capacity/infrastructure among the top issues affecting the long-term viability and effectiveness of individual organizations and the sector as a whole.

The Immeasurables

As the statistics indicate, New Jersey's nonprofit sector carries considerable economic weight. But equally important is the sector's less quantifiable significance in the life of our state.

New Jersey's nonprofit sector is an essential partner with the government and business sectors. It is often the source of innovative solutions to social problems. It is the sector in which we can pursue individual beliefs and interests. It is where we voluntarily associate and experience our diversity as a citizenry. It serves our aesthetic needs and educational ambitions.

But it is also the sector that gives voice to our sense of the public interest. Through it we actualize our demands for diversity, equity, and social justice. We respond to community needs and build local structures to meet them. In many ways, the nonprofit sector is where we find the core values of a democratic culture, and we cannot survive without it.

The opinions expressed in this article do not necessarily reflect the views or policies of the U.S. government.

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