Study: Wealth of California Nonprofits Not Evenly Spread Throughout State

San Francisco – Nonprofit organizations are an economic force in California – as an industry, they’re now the fourth largest employer in the state – but the ones that do work in communities of color and low-income areas have far fewer financial resources than their counterparts in wealthier and less diverse areas, according to a new study.

“Nonprofits are working to correct inequalities, and yet those same inequalities are reflected in the nonprofit sector,” said Jan Masaoka, the CEO of the California Association of Nonprofits (CalNonprofits), a statewide advocacy group for nonprofits that produced the report. “Wealthy communities are tending to give to nonprofits in wealthy communities.”

The San Francisco Bay Area, for example, has less than a fifth of the state’s total population, but has nearly half of the assets of all the state’s nonprofits, according to the study. On the other end of the spectrum, the San Joaquin and Inland Empire regions, which comprise sweeping areas of Central and Southern California, contain more than 20 percent of the state’s population, but have just over 5 percent of the sector’s assets.

“I don’t think anybody’s surprised to hear that wealthier communities have wealthier nonprofits than poor communities, or that communities of color have poorer nonprofits than mostly white communities, but when you come face to face with the actual data you say ‘Wait a minute, what’s going on here?'” said Masaoka.

The first of its kind, the report measures the economic and social impact of the state’s nonprofits, and was produced by CalNonprofits with research conducted by the University of San Diego’s Caster Family Center for Nonprofit and Philanthropic Research.

According to the study, nonprofits are the force behind one-sixth of California’s GDP (Gross Domestic Product), and in 2012 they generated $37 billion in taxes (at federal, state, and local levels). By employment numbers, they’re the state’s fourth largest industry – larger even than the financial sector – and they employ proportionately more women and people of color than the overall workforce. Close to a million Californians work full-time at nonprofits, and at least half of the staff at over a third of the organizations surveyed is comprised of people of color.

But the study found serious disparities in the number of nonprofits serving certain regions and populations, as well as disparities in the financial resources at those organizations’ disposal.

While immigrant and minority communities account for the majority of the state’s population, the study found that there are only half as many nonprofits per capita that are located in communities with primarily ethnic communities (defined as zip codes where at least a fifth of the population identifies as non-Hispanic whites) as there are in less ethnically diverse areas. And the nonprofits in the communities of color have less than half of the assets per capita as do the nonprofits in less diverse places.

Additionally, wealthier areas like that of the Bay Area have five times as many nonprofits per low-income person than regions with higher concentrations of low-income people, like the San Joaquin and Inland Empire regions.

The findings are all the more significant given that the study found that over 80 percent of nonprofits focus their work locally – on their immediate neighborhood, city, or county – and that the most common work done by the organizations includes mobilizing around community issues and meeting with public officials.

And according to Masaoka, these are findings that those who fund nonprofits need to keep in mind: “For individual donors and for foundations, I think it’s worth saying ‘How about directing some of your donations to communities with fewer resources?'”