In terms of the sheer number of organizations tackling the problem, the West Coast is a hub for nonprofits interested in youth character development, organizations that offer a safe space for kids to spend time and activities that improve their body, mind, and value systems. In California and Washington, for instance, there are more groups tackling that issue than any other, even pressing local issues like hunger or affordable housing.
But take into account the average funding per organization and the real hub for that slice of the nonprofit sector might be the Midwest. It’s there—in places like Idaho, Nebraska, and Oklahoma—that groups receive the most money to do their work.
That’s according new maps developed by Civis Analytics, a data science firm that recently analyzed public tax filings within the sector to spot hidden trends for Fast Company. To do it, Civis worked with the IRS and Amazon Web Services to secure and review the public tax filings of 353,000 nonprofits.
Civis used a machine learning method called topic modeling to divide groups into one of 15 different topic areas based on what words they used in their mission statements (only groups that filed a Form 990 or annual disclosure with both in-depth financial information and a formal mission statement in 2017 were considered.) The company then organized the results to rank which subjects were the most popular by state (and within the top 10 large cities), as well as which subjects gained the most average funding per group. It also traced where the top five funders per category were located.
Roughly 1.4 million nonprofits operate in America, accounting for roughly 10% of all jobs in the private sector. Civis’s map provides a general overview for what kind of work is being prioritized in different places, so that experts can start figuring out why some trends are happening and start asking questions about group effectiveness.
“The nonprofit sector in the United States is huge,” says Scarlett Swerdlow, the director of applied data science at Civis. “This is a way for us go deeper and understand the needs that the nonprofit sector is serving and which organizations are receiving the most support and funding to do that work.”
Other hot spots for youth development include Arizona and Minnesota. The sector in Wisconsin, Maryland, Virginia, and Mississippi is focused most strongly on economic development. In Louisiana and Indiana, the priority is affordable housing. At the same time, much of the rest of the country is most commonly funding work with vulnerable populations, a catchall term that, according to Civis’s definition, includes “providing services to populations that might otherwise fall through the cracks” like children, people with developmental disabilities, and seniors with long-term needs.
On average, healthcare organizations and medical benefit and insurance groups receive the highest funding per state, because some major medical plans and university medical centers qualify as nonprofits. Mutual assistance associations offering medical benefits and insurance top some state rankings in the Midwest and Southwest. That means that the common groups tackling the most common problems aren’t necessarily the best funded, which may explain why more and more organizations spring up to fight the same problem.
Because it’s just an analysis of one year, the report doesn’t track shifts over time, which means it can’t pick up the major reduction in charitable giving that happened this year: Americans gave nearly $428 billion to various causes in 2018, according to a recent report from Giving USA, but after years of record increases, that number dropped by roughy 2% overall from 2017 levels when adjusted for inflation.
One of the causes is a reduction in individual giving: it dropped by about 3.5% when adjusted for inflation. Researchers speculate that several factors are contributing to that, including unreliability in the stock market and a new tax policy that doubled the standard deduction, which means many middle-class Americans don’t have as much incentive to itemize their donations for tax benefits.
The projected fallout from a middle-class reduction in giving is that smaller local charities will be hit hardest. To that end, Civis’s regional map could help foundations and charities figure out where cash infusions for different causes might help prop up needy groups. There are also hints for where groups that might feel pinched for funds might go looking for more inspiration. Civis’s data shows that the cause of labor and worker’s rights typically attracts the most average funding per organization in Wyoming, the Dakotas, Alabama, Georgia, and Florida. Groups in one place might think about what’s working in another. It also highlights the top five best-funded organizations by cause area and the states they are located. For labor, two states with at least one big organizational standout are Minnesota and Texas.
To that end, California may have lot of youth development groups, but it also just so happens to contain two of the top funded youth sports operations, alongside major recipients in Georgia, Florida, and Minnesota. That could be something for nonprofit managers creating their youth development programming to keep in mind. “This might be a way [for organizations or funders] to identify any gaps in services as well,” adds Swerdlow. It pays to think about both what’s popular and most likely to get funded when trying to make the biggest difference possible.