Charitable Organizations

Charitable organizations make a difference in every American's life. Sometimes people benefit without being aware of the reach of this country's unique nonprofit sector. Visitors can enjoy a great urban park and never realize that charitable organizations are major contributors to the gardens, playgrounds, paths, and programs. Parents of children receiving polio shots may not know that one charitable group led the campaign to develop and distribute the vaccine and another funded much of its development. And people may not remember that the air and water that surrounds them is far cleaner because of how nonprofits have worked with government to reduce pollution.

Most of the time, Americans do appreciate how charitable organizations are improving lives across the country and around the world. They know that private support helps universities prepare youth for lifelong contributions to society, and that victims of disasters are helped in profound ways by nimble and timely intervention from charitable relief agencies.

Communities across America are grateful for the museum, theater, dance, and music programs that grace their lives and for the assistance community day care programs offer to the very young and very old.

What make these organizations distinctive are not just the indispensable services they provide, but also how they do their work. Charities and foundations are created and sustained by people who want to give their time and resources to solve problems and enrich their communities. Nearly half of all adults volunteer each year, and nine out of 10 households make charitable contributions. Individual donations total more than $207 billion, which comes on top of the $41 billion given each year by corporations and foundations created from private money.

These contributions of time and money reflect the public's commitment to and appreciation of this distinctive feature of American life: people coming together through charitable organizations to improve the lives of others and meet needs that government and business do not.

The Panel on the Nonprofit Sector is dedicated to ensuring that Americans continue to benefit from the richly varied programs of the charitable community. Formed at the encouragement of the leaders of the Senate Finance Committee, the Panel has led to an unparalleled collaboration on how to strengthen the sector's accountability, transparency, and governance.

The participants in this effort-thousands of people representing diverse organizations from every part of the country-recognize that to serve their missions effectively, they must demonstrate that they are ethical, responsible stewards of the public's generosity. This report is a vital part of the charitable community's commitment to keeping the public trust.

Developed with the input of nonprofit leaders, experts, and volunteers, it offers a comprehensive approach to strengthening accountability. Its recommendations are a carefully integrated package that calls for improvement within the sector, more effective oversight, and changes in the law.

No single action can achieve the necessary results by itself. These recommendations underscore the importance of transparency, of providing the information that allows the public to make informed choices and government officials to root out problems.

Most important, the recommended actions offer a guide to maintaining the essential balance between adequate oversight that keeps potential abusers from using the sector to benefit themselves and safeguarding the independence of organizations in facilitating the opportunity for them to contribute to the wellbeing of society.

The Scope of the Nonprofit Sector

America's charitable community produces its results because of the commitment and talent of the people who have dedicated their lives to helping others. Part of that service comes from volunteers, who collectively provide the equivalent of 9 million full-time staff members. The sector's programs also are supported by its 11.7 million paid employees, 9 percent of the entire national workforce and a number greater than the finance, insurance, and real estate industries combined.

The organizations that these Americans work for continue a three-century tradition. In the colonial period, groups who found themselves in the minority, created their own social service organizations.

Some programs started by nonprofits, including libraries, local schools, fire stations (many of which still use volunteers), and parks-have been expanded by government, enabling the broader community to enjoy their benefits.