April 24, 2018

New MCF Research Sheds Light on Size, Scope of Dane County Nonprofit Sector

Andy Davey

Pictured above: MCF Community Resource Analyst Andy Davey deep dives into the data on Dane County's abundant nonprofit sector (He's having fun, really.).

In the months preparing to start my position as a research fellow at Madison Community Foundation last fall, I became more and more excited by the stories I read about MCF’s work and the things I imagined I’d be learning more about. I read about grants to support single Latina moms building their literacy skills, funds for youth learning to make everything from metal sculptures to new software programs, and seed money for lasting investments in major civic projects like Monona Terrace.

Instead, a few weeks into the job, I found myself buried in documents with titles like “1995 EO CPE Text,” “Publication 557,” and “Unrelated Business Income Tax,” and staring at seemingly endless rows of spreadsheet cells containing gigabytes worth of data.

While the knowledge I was gathering wasn’t the feel-good stuff I was expecting, I was fascinated by it and began to understand the data as a story unto itself. It offered some striking revelations and sparked additional questions that pointed towards the stories I read about before beginning the research, stories about real people, their struggles and achievements. Much of the material I was examining had been generated by the Internal Revenue Service, the primary source of data about the nonprofit sector in the United States. The immediate goal of my research was to better understand the broad outlines of the sector in Dane County, to answer questions like: how many organizations are out there? How many are focused in certain areas like the arts, health, or the environment? How much annual revenue do they have to work with? The larger goals of the ongoing research are to provide information and analysis to donors so they feel confident giving and to help build the capacity of nonprofits so they can be as effective as possible in their work.

As for some of the striking revelations and additional questions this research has raised, here are a few highlights. The city of Madison has 1 nonprofit for every 151 people. Compared to a lot of cities—such as Austin, Texas, which has 1 nonprofit for every 204 people—that’s a lot of nonprofits. But it’s less than the relative number of Ann Arbor, Michigan, which has 1 for every 110 people. Moreover, in Dane County, 55% of nonprofits operate with annual budgets of $25,000 or less. What are we to make of these numbers? How many of these organizations are working on crucial issues, like racial disparities? How might funders build their capacity? Is there a need for more coalition building or even mergers of these organizations to better leverage resources? What can funders like MCF learn from these organizations and the work they’re doing on the ground? How can funders help provide strategic guidance to both donors and nonprofits?

These are big, important, and complicated questions that a lot of smart, capable, and dedicated people are wrestling with in our community. By conducting research and engaging in strategic, informed conversations, MCF aims to discern answers and ways to move forward. We want to help integrate big-picture data and statistics with the lived experiences of people and organizations in our community. I’m grateful and privileged to be part of the process.

If you’re curious to learn more about the research findings so far, I encourage you to read the full report, “Sifting through Abundance: Outlining the Nonprofit Sector in Dane County.” I also encourage you to send me comments, questions, ideas, and observations about what’s happening in your corner of the nonprofit world at adavey@madisongives.org. Like MCF as a whole, I’m always eager to learn more.