In the article “Nonprofit, a Bigger Share of the Economy,” by
Anna Bernasek talked about how nonprofit originations have grown faster than
profit business. According to Bernasek the reason why nonprofit organizations
have been able to outgrow business is due to the population ages. There is a greater
demand for health care services which result in an increase growth in hospitals
and health care organizations many which are nonprofits. Also, according to
Bernasek, charities focused organizations for poorer American’s demand have
also increased after the Great Recession.
“In addition, family foundations have grown in popularity, providing a
convenient repository for untaxed wealth that often remains under the control
of the donor,” Bernasek says.
From 2001 to 2011, nonprofit organization grew 25% and
accounted 5% of GDP. Nonprofit organization are exempt from corporate taxes as a result are
able to hire workers more quickly, pay better wages, and contribute to gross
domestic product according to the Urban Institute. I think this is the reason why nonprofit originations
have been able to outgrow business in terms of demands. I predict that in the
future nonprofit originations will account for more than 5% of GDP and play a
greater role in the economy.
http://www.nytimes.com/2014/03/09/business/for-nonprofits-a-bigger-share-of-the-economy.html
Its very interesting to see that nonprofit organizations are growing faster than profit businesses. Health care demand is increasing along with the aging of the baby boomers, which is a large boost to nonprofits such as hospitals. The exemption from corporate taxes also gives nonprofits an advantage as compared to profit businesses. They have more of an ability to expand and grow as compared to all those who aren't nonprofits. I feel that the future is bright for nonprofit organizations.
ReplyDeleteSome of these fast growing nonprofit organizations include the NFL, NCAA, and MLB. Over the best twenty years look how these leagues have increased there revenues. These are nonprofits making over tens of billions of dollars, and there commissioners are making up to 26 million. The NFL is worth 35 billion and is exempt from 9 billion tax dollars. My question is how many companies are hiding behind the nonprofit title such as these institutions.
ReplyDeleteI find it interesting and unsurprising that non-profit organizations are growing faster as compared to for-profit businesses, especially considering the fact that non-profits are exempt from corporate taxes on a whole. This would be helpful to any business at any time, but considering the current economy and the difficulties that for profit businesses face in this economy, the exemption from corporate taxes is a major advantage. If the economy continues as it is, I can easily see the non-profit sector growing even more.
ReplyDeleteI also think it is unsurprising that non-profit organizations are growing faster than for-profit organizations. I wonder if the growth of non-profit organizations are a result of the US economy not being able to cater to developing for-profit entrepreneurs. Innovative entrepreneurial businesses fuel the economy and it seems that entrepreneurs now are attracted to creating their business plan as non-profit organization--especially since demand for services is so high. It would be interesting to look into the motives for this in more detail.
ReplyDeleteI agree that non-profit organizations are able to hire workers quickly, but non-profit organizations sometimes cannot, especially as a start-up, offer employees high wages. This often results in non-profit organizations creating internship programs. These internship programs help both the non-profit organization and the economy as a whole because it gives opportunity to young people wanting to join the labor force to gain valuable technical skills.
There is a tendency to equate non-profits to charities, I think, and it's interesting to learn that sports leagues are considered non-profits, but are some of the biggest generators of spending in the country, not to mention a huge source of income for the select few. If the non-profit sector is to grow, one would hope that it would be influenced by increasing corporate social responsibility. Regardless of what the companies' motives might be, helping others is always a worthwhile cause.
ReplyDeleteI agree with Aara, when I think of nonprofit organizations, I usually think of charity organizations and it's strange to me that organizations like the MLS are considered to be in this same category. There does need to be some differences between organizations because it seems to be a little deceitful with the current system.
ReplyDeleteThis is a very interesting article. I believe that a big portion of this non profit organizations are the hospitals and small health care services. As the article states the increase in these health care non profit organizations may be because the baby boomers are now reaching an elderly age. This may be due to the reason there is such an increase in non profit organizations.
ReplyDelete