Introduction

easuring and understanding the impact of nonprofi t organizations on their communities is a challenging task. Individual charitable organizations vary from many Mthat have no paid staff to those with hundreds of employees and multimillion-dollar operating budgets. Nonprofi ts also operate in widely disparate categories of services, such as health, arts or human services; and consequently the outcomes of their activities may be measured in diff erent ways. But when the revenues, budgets and services of all nonprofi ts are considered in total, it is apparent that the nonprofi t sector is a substantial part of the economy in Louisville and similarly sized communities. Charitable organizations likewise have a major impact on the quality of life in these cities, and on their opportunities for growth and abilities to adapt to changes in economic and social circumstances.

In 2008 the Center for Nonprofi t Excellence produced the Nonprofi t Peer City Study to determine what variations existed in the nonprofi t sector in Louisville compared to 14 peer cities. Th is report expands upon the fi ndings of the original study by incorporating survey data from Louisville area nonprofi ts in addition to updating the 501(c)(3) public charity organizations data used in the 2008 report. Th e survey data cover topics such as Board Membership, Fund Development, Planning, Human Resources and Measuring Outcomes. Th ese data off er insights into the operations and challenges facing nonprofi ts in the Louisville area.

Recently, other studies have examined the nonprofi t sector in Kentucky and some of Louisville’s peer cities using the National Center for Charitable Statistics (NCCS) data. Specifi cally, the Kentucky Nonprofi t Network has released a series of annual reports that include information about charitable organizations statewide and for individual Kentucky counties. Another report, Non-Profi t Presence in Cincinnati MSA, was produced in 2011 by the Center for Economic Analysis and Development at Northern Kentucky University and included Louisville among the fi ve comparison cities in the study. Th is 2012 Center for Nonprofi t Excellence report adds to the growing knowledge base about the nonprofi t sector in our region and provides opportunities for developing strategies to support the success of these charitable institutions.

2 Center for Nonprofit Excellence Executive Summary

A family proudly takes pictures of the fi rst-ever college Th e Peer City Nonprofi t Study 2012 presents two very graduate in their family. An abused child wakes up in a place specifi c sets of data – one that analyzes Louisville’s of love and safety. A couple stands to applaud as they see position among its fourteen other peer cities and their favorite opera through unsuccessfully restrained tears. another that provides a milestone assessment of Neighbors breathe in cleaner air in the city’s West End. A Louisville nonprofi t policies and practices. child’s life is saved through miraculous medical care. People It is increasingly well understood that the nonprofi t marvel at the cast iron facades of the buildings on Main sector has a place of growing signifi cance in today’s Street. A neglected dog snuggles with his new owner, a boy economy. Th e Urban Institute reports that in 2010, who will learn he will never have a more faithful friend. nonprofi ts in the United States paid $587.7 billion Th ese are the real results achieved through the nonprofi t in wages to 13.7 million people, nine percent of the sector, working hand-in-hand with the business and country’s labor force. governmental sectors, with the support of people who give Th e economic importance of the nonprofi t sector is their time and treasure for a better community. equally or more signifi cant in the Louisville area, with While this study conducted by the Center for Nonprofi t $7.8 billion in revenue. Th at places it sixth highest Excellence (CNPE) cannot fully capture the true in unadjusted total revenue among the 15 peer cities collective impact of the work accomplished by Louisville’s studied, and it is roughly 13.2% of the $59 billion GDP nonprofi ts, it does provide a picture of where the generated in the Louisville region in 2010. nonprofi t community in the region currently stands Louisville area hospitals make up over half of nonprofi t and where it is going. revenue locally. When compared to the peer cities in the study, the Louisville region’s hospitals rank second in revenue generated per hospital and fourth highest in dollars per resident. Clearly, there is a downside to exceptionally high levels of spending for healthcare at the hospital intervention level, since this is the most expensive stage of healthcare administration. On the other hand, having top levels of medical care and expertise within the region is a favorable circumstance. Excluding hospitals, area nonprofi ts ranked fourth highest in revenue per organization and seventh highest in dollars per capita. Th e Louisville area ranks only 12th of the 15 peer cities in the number of nonprofi ts per resident. Th e local study of area nonprofi ts shows that larger nonprofi ts tend to be older, more established and better able to fi nancially withstand economic challenges – making them more sustainable.

2013 Survey Report 3 It is clear that the there is an economically emerged in 2011 with most area nonprofi ts in the study robust sector in Louisville and southern reporting revenue increases. Th e larger the organization, the more likely its budget grew in 2011. With the region having Indiana, with larger nonprofi ts on more than its proportionate share of larger organizations, this average than the peer cities. Signs of places a good many nonprofi ts in a seemingly competitive returning strength emerged in 2011 advantage, especially in a sluggish economy. with most area nonprofi ts in the study With projected resource scarcity for the sector, “collaboration” continues to be the mantra for the way reporting revenue increases.” forward. Louisville and southern Indiana nonprofi ts reported relatively encouraging levels of sharing administrative services How do we know that local nonprofi ts are making a (25%) and administrative staff (12%). diff erence? Are they, in the main, fi scally accountable, A very special thanks is extended to Eric Schneider, the eff ective in carrying out their objectives, and governed lead consultant on the combined studies contained in this in ways that assure ethical management and community report. Sara Renn was the team’s lead researcher and was improvement? How well do they work together for the assisted by Morgan Eklund, Alexander Narang and Lisa community good, to engage citizens in ways that help Van Coppenelle, who worked as VISTA volunteers and them reach their full potential and, in so doing, make graduate interns with CNPE. our region competitive and vibrant? Special appreciation is extended to the Brown-Forman for Th ese are the core issues into which this study sought to their support of CNPE’s capacity building programs that gain perspective and insight. their premier company has sponsored, including support It is clear that there is an economically robust sector in for this project. Many nonprofi t organizations whose Louisville and southern Indiana, with larger nonprofi ts stories are told among these pages would certainly join us on average than the peer cities. Signs of returning strength in that salute.

4 Center for Nonprofit Excellence Peer Cities

Louisville’s peer cities include Metropolitan Statistical by Greater Louisville Inc (GLI), the Greater Louisville Areas (MSAs) that exhibit similar characteristics in Project, and the Brookings Institution, among others, have population density and regional economic ties. Peer looked at Louisville and its fourteen peer cities to determine Cities are thus established as benchmarks and comparison Louisville’s standing in key indicators tied to economic points for urban growth. Benchmark studies conducted well-being. Th e 15 MSAs included in this study are:

Birmingham-Hoover, AL Greensboro-High Point, NC Memphis, TN-MS-AR

Charlotte-Gastonia-Rock Hill, Indianapolis-Carmel, IN Nashville-Davidson-Murfreesboro- NC-SC Franklin, TN Jacksonville, FL Cincinnati-Middletown, OH-KY-IN Omaha-Council Bluffs, NE-IA Kansas City, MO-KS Columbus, OH Raleigh-Cary, NC LOUISVILLE-JEFFERSON Dayton, OH COUNTY, KY-IN Richmond, VA

Columbus, OH Omaha-Council Bluffs, NE-IA Dayton, OH Indianapolis- Cincinnati- Carmel, IN Middletown, OH-KY-IN Richmond, VA

LOUISVILLE- Kansas City, MO-KS Jefferson County, KY-IN

Greensboro-High Point, NC Raleigh-Cary, NC Charlotte-Gastonia-Rock Hill, NC-SC Nashville-Davidson- Murfreesboro-Franklin, TN Memphis, TN-MS-AR

Birmingham-Hoover, AL

Jacksonville, FL

Th ese fi fteen MSAs share population and geographic (North Carolina, South Carolina) and four Southern states characteristics. Th e population size ranges from 841,310 (Alabama, Kentucky, Florida, Tennessee). (Dayton, OH) to 2,133,203 (Cincinnati-Middletown, Six of the fi fteen MSAs are multi-state geographies. Th ose OH-KY-IN), according to 2010 Census fi gures. A MSAs include: Charlotte-Gastonia-Rock Hill, NC-SC; majority of the MSAs are geographically located within Cincinnati-Middletown, OH-KY-IN; Kansas City, MO-KS; the lower Midwest, South Central, Central, and Mid- Louisville-Jeff erson County, KY-IN; Memphis, TN-MS-AR; Atlantic states, where all fi fteen cities span eleven and Omaha-Council Bluff s, NE-IA. Among these multi- diff erent states. Th e fi fteen peer cities reside within two state geographies, Louisville-Jeff erson County, KY-IN, has Midwestern states (Indiana, Ohio), three Central states the second lowest population, with 1,283,566 residents. (Nebraska, Missouri, Kansas), two Mid-Atlantic states

2013 Survey Report 5 Methodology

MSA Comparison Data Th e BMF is a cumulative fi le that includes basic information from IRS Forms 1023 and 1024 for all Th e Center for Nonprofi t Excellence collected data for “active” and registered tax-exempt organizations. the comparison of 15 Metropolitan Statistical Areas to determine Louisville’s standing relative to its counterparts NCCS data are classifi ed using the National Taxonomy in key indicators linked to nonprofi t sector size and scope. of Exempt Entities-Core Codes (NTEE-CC). Th is is a hierarchical system of mixed notation with 655 centile All data were retrieved from the National Center for level codes, collapsible into 26 major groups, collapsible 1 Charitable Statistics (NCCS) with the exception of into 12 broad categories. volunteering data (Volunteering in America). NCCS derived its data from Internal Revenue Service reporting Th e study looked at these Broad Categories: by tax-exempt nonprofi t organizations. “Th e data • Arts, Culture, and Humanities produced by NCCS are intended for use by researchers and policy-makers in their quantitative analyses, and as • Health, Hospitals a springboard for more in-depth survey or case study • Health, Other research.”2 • Human Services To compare the 15 MSAs in number of nonprofi ts and • Education (Higher & Other) total revenue, CNPE accessed IRS Business Master Files (BMF), December 2011, on the NCCS site. Th e BMF reported 2,379 501(c)(3) public charities throughout the Louisville MSA in 2011 that fi led a Form 990, 990-EZ, 990-PF and 990-N ePostcard.

6 Center for Nonprofit Excellence Methodology

MSA Revenue Sources included a second mailing of postcards and reminder phone calls to organizations for which phone numbers Th e source for Revenue Sources data was also from were available. Th e survey was available to participants NCCS’s IRS Core Public Charities Files, Circa 2010. for a six-week period in June and July 2012, and 209 Th e Core Public Charities Files are based on the IRS’s organizations completed at least part of the survey. annual Return Transaction Files (RTF) and contain data Respondents were allowed to skip questions, so not all on all 501(c)(3) organizations that fi le a Form 990 or questionnaire items will have the same total of responses. Form 990-EZ as required. Th e nonprofi ts profi led in this data have more than $25,000 in gross receipts but do not Th e survey focused on 501(c)(3) public charity organizations include churches or congregations. that reported over $25,000 in gross receipts in the latest reporting year but was not exclusive to those organizations. MSA Data on Average Giving Participating nonprofi t organizations were those classifi ed and Adjusted Gross Income by the Internal Revenue Service as operating solely for Th e data collected on Average Giving and Adjusted Gross purposes that are “charitable, religious, educational, Income (AGI) for this study were collected from NCCS. scientifi c, literary, testing for public safety, fostering Th e AGI and charitable giving data was reported on IRS national or international amateur sports competition, 3 tax return Form 1040, Schedule A, by households that and preventing cruelty to children or animals.” itemized deductions and existed within NCCS’s IRS Volunteering In America Tax Return Summary Files. Th e most recent aggregated data for Average Giving and Adjusted Gross Income Volunteer data were gathered from the Corporation for were dated 2008. NCCS provided calculated averages on National and Community Service’s (CNCS) Volunteering AGI and individual giving amounts by county and by in America website. Th e data were from 2008 to 2010 and state. Th e reported numbers were further calculated for reported average hours of volunteer work per capita by the entire MSA by averaging the data within each of the MSA. Data on the fi nancial contribution of volunteering counties that comprised the MSAs. and total number of volunteers and volunteer hours were computed by the CNCS. Louisville Area Nonprofi t Report 1 National Center for Charitable Statistics, nccs.urban.org. Th is report was created to gather information about the 2 Guide to Using NCCS Data. August 2006. National Center for Charitable Louisville Metropolitan Statistical Area’s (MSA) nonprofi t Statistics. 3 Internal Revenue Service (August 3, 2012). Exempt Purposes – Internal sector. Th e Center for Nonprofi t Excellence consulted Revenue Code Section 501(c)(3). Internal Revenue Service. January 2013. with partners during the creation of an extensive survey to http://www.irs.gov/Charities-&-Non-Profi ts/Charitable-Organizations/ Exempt-Purposes—Internal-Revenue-Code-Section-501(c)(3) gather demographic information. Th e survey covered nine categories and 63 questions. Th e nine categories were: Demographics, Board of Directors, Fund Development, Finances and Accreditation, Formal Collaboration, Results: Outputs and Outcomes, Human Resources, Planning and Advocacy. Links to the online survey were posted on the Center for Nonprofi t Excellence web site, and notices requesting participation were sent via email to 677 Executive Directors/CEOs of Louisville MSA nonprofi ts for whom CNPE had contact information. Additionally, 798 postcards were mailed to nonprofi ts in the Louisville MSA for whom addresses could be obtained from IRS data. Th ese two primary methods of communicating the survey reached approximately 1,210 nonprofi ts throughout the Louisville MSA. Eff orts to boost participation rates

2013 Survey Report 7 Louisville’s NonprofitLouisville’s Sector Nonprofit Sector

Th e 2010 Census reported a total population of 1,283,566 for Th is total included all hospitals and the revenue generated the Louisville Metropolitan Statistical Area (MSA). Th e entire by those entities. Despite being ninth in population and MSA includes 2,379 registered and active nonprofi t public nonprofi t size, Louisville’s $7.8 billion places it sixth charities across its thirteen counties. Th ose counties include highest in unadjusted total revenue among the 15 peer the Kentucky counties of Bullitt, Henry, Jeff erson, Meade, cities. Additionally, the ratio of Louisville nonprofi ts to Nelson, Oldham, Shelby, Spencer, Trimble and Washington population positions Louisville 12th out of the 15 peer and the Indiana counties of Clark, Harrison and Floyd. cities with one nonprofi t for every 540 people. Louisville ranks ninth in total population among the 15 Looking further at total revenue in Louisville and its peer peer cities in the study. Similarly, its number of nonprofi ts cities, amounts were adjusted for population and for total also ranked ninth among other MSAs. Th e total revenue number of nonprofi ts in the sector. Adjusting the sums reported by Louisville’s 2,379 active and registered 501(c)(3) for these two variables helps to account for the varying public charities in fi scal year 2011 was over $7.8 billion. population sizes of MSAs and the number of nonprofi ts MSA Population Nonprofi ts within a community. Th ese adjusted levels further aid in (2010 Census) including hospitals analyzing relative comparisons between MSAs that may seem Birmingham 1,128,047 2,311 very diff erent in size. Looking at total revenue as it relates Charlotte 1,758,038 3,133 to the number of nonprofi ts off ers a picture of the average Cincinnati 2,130,151 4,406 budget size of organizations. On the other hand, looking at Columbus 1,836,536 4,648 revenue on a per capita level suggests how widely nonprofi ts Dayton 841,502 1,715 Greensboro 723,801 1,404 invest money and services into the community and vice versa. Indianapolis 1,756,241 4,366 Th e total revenue fi gure of $7.8 billion for Louisville Jacksonville 1,345,596 2,323 includes all nonprofi t sectors and hospitals. Th is revenue Kansas City 2,035,334 5,042 level places Louisville sixth among the 15 peer cities Louisville 1,283,566 2,379 Memphis 1,316,100 2,217 despite having a population that ranks it ninth. Further, Nashville 1,589,934 3,405 the adjusted total revenue for total number of nonprofi ts Omaha 865,350 1,891 and total population put Louisville third and fi fth, Raleigh 1,130,490 2,612 respectively. Louisville’s nonprofi ts rank decidedly higher Richmond 1,258,251 2,760 in revenue levels than their size suggests. Total Nonprofit Revenue (including hospitals) $5000,000 $10,000 $4500,000 ■ Total Revenue (Per NP) $9,000 $4000,000 Total Revenue (Per Capita) $8,000 $3500,000 $7,000 $3000,000 $6,000 $2500,000 $5,000 $2000,000 $4,000 $1500,000 $3,000 $1000,000 $2,000 $500,000 $1,000 $0,000 $0

Dayton Omaha Raleigh Cincinnati Memphis Nashville Columbus Charlotte Richmond Jacksonville Indianapolis GreensboroBirminghamKansas City Louisville (3/5) 8 Center for Nonprofit Excellence Louisville’s Nonprofit Sector

Total Hospital Revenue $500,000,000 $1,000

$450,000,000 ■ Total Revenue (Per NP) $900 $400,000,000 Total Revenue (Per Capita) $800 $350,000,000 $700 $300,000,000 $600 $250,000,000 $500 $200,000,000 $400 $150,000,000 $300 $100,000,000 $200 $50,000,000 $100 $0 $0

Raleigh Omaha Dayton Cincinnati Memphis Columbus Charlotte Nashville Richmond Indianapolis Jacksonville Birmingham Greensboro Kansas City Louisville (2/4) To get a sense of how much hospital revenue contributes still ranks second in total revenue – adjusted for both, to the entire nonprofi t sector’s total revenue, total the city ranked relatively high among its peer cities hospital revenue is isolated and adjusted by number of in hospital revenue. Other cities like Cincinnati (58 hospitals and residents. In many cases a few hospitals hospitals), Columbus (31), and Kansas City (31) were can disproportionately skew data on an MSA’s nonprofi t the top three among the MSAs in the total number of sector by presenting a large concentration of revenue hospitals but ranked only as high as fi fth (Cincinnati) in among a few large institutions. Louisville’s MSA reported adjusted hospital revenue. Columbus and Kansas City, a total of 13 hospitals that generated $4.2 billion in with 31 hospitals in each of their MSAs, rank 11th and total revenue for 2011. Th at amount represents 54% of 12th, respectively, when looking at average revenue per Louisville’s entire nonprofi t revenue total. On average, hospital. Th e total number of hospitals in the MSA did Louisville’s hospitals brought in revenue of about $325 not directly correspond with adjusted revenue amounts. million each annually – ranking it second among its peer To get a picture of the Louisville nonprofi t sector cities. Hospital revenue per capita was about $540 – without the signifi cant contribution of its hospitals, ranking it fourth among its peer cities. total revenue excluding hospitals was also measured for Louisville and its peer cities. Th e total revenue of Louisville ranked second in the average Louisville’s nonprofi t sector after removing hospital revenue totaled approximately $3.6 billion in 2011. As revenue raised by hospitals among all previously stated, hospital revenue comprised 54% of 15 peer cities. Louisville’s hospitals total Louisville’s total nonprofi t revenue. only 13 in number but generate 54% of To measure how Louisville compares with other peer cities without the contribution of its hospital industry, the entire nonprofi t sector’s revenue. total nonprofi t revenue excluding hospitals was measured. On average, Louisville hospitals bring in Despite removing such a large portion of its total revenue about $325 million annually. levels by subtracting hospital revenue, Louisville retained its rank of fourth among its peer cities when adjusting total revenue for number of nonprofi ts. Louisville Despite the relatively small number of hospitals in dropped from fi fth to seventh in looking at total revenue Louisville, the revenue they generate exceeds size in relation to total population. Th e average Louisville expectations. With 13 hospitals, Louisville ranks 11th nonprofi t generated about $1.5 million in revenue in out of 15 in total number of hospitals yet Louisville 2011 and took in approximately $2,800 per resident.

2013 Survey Report 9 Louisville’s Nonprofit Sector Total Nonprofit Revenue (excluding hospitals) $3,000,000 $6,000 ■ Total Revenue (Per NP) $2,500,000 $5,000 Total Revenue (Per Capita) $2,000,000 $4,000

$1,500,000 $3,000

$1,000,000 $2,000

$500,000 $1,000

$0 $0

Dayton Omaha Raleigh Nashville Charlotte Memphis Columbus Cincinnati Richmond IndianapolisBirmingham Kansas CityGreensboroJacksonville Louisville (4/7) Louisville’s rankings among its peer cities remained in total hospital revenue (per hospital), but by removing relatively consistent with the addition and removal of hospitals from its total revenue levels, Raleigh ranked 14th hospital revenue from the total revenue amount. Other in average revenue per nonprofi t. MSAs, however, dramatically dropped in ranking when Even though Louisville’s hospitals contribute signifi cantly hospital-generated revenue was removed from the total to the MSA’s overall revenue totals, its whole nonprofi t revenue of the overall nonprofi t sector. For instance, sector is not heavily dependent on revenue from a single Cincinnati, with the highest total population, fell from source. Other nonprofi t subsectors, including Human second in total revenue, adjusted per capita, to 11th Services, Education, and non-hospital health nonprofi ts when hospital revenue was removed. Such was also the also contribute signifi cant revenue to the community. case with Raleigh, which averaged higher revenue levels Th ese specifi c data are presented later in the study. for hospitals than any other MSA. Raleigh ranked fi rst

10 Center for Nonprofit Excellence Louisville’s Nonprofit Subsectors

Nonprofi t organizations were classifi ed into diff erent accounted for the least amount of revenue proportional subsectors based on tax-exempt purposes. Th e nonprofi t to their distribution within the entire sector with just 3% subsectors profi led in the comparison between of the total revenue. Health (Other) nonprofi ts, on the Louisville and its peer cities included Arts, Culture, other hand, generated the greatest amount of revenue and Humanities; Education (Higher and Other); relative to their size in the sector with only 10% of Health (Other/Non-Hospital); and Human Services. In nonprofi ts in that subsector producing 46% of total non- Louisville, these four subsectors represented 72% of its hospital nonprofi t revenue. total non-hospital nonprofi ts. Across all of the peer cities, these four subsectors comprise, on average, 69% of the Louisville consistently ranks higher in entire nonprofi t sector. revenue totals than its population and Th e MSAs generating the highest total revenue in each of the subsector categories signifi cantly exceeded their peer nonprofi t size would suggest in every cities. Factors such as sizeable community investment category of nonprofi ts (Arts, Education, via foundations and public entities were the most Health, Human Services) noteworthy infl uences on the high levels of total revenue relative to other peer cities. Th e cities of Charlotte, NC (Human Services), Nashville, TN (Education), A signifi cant portion of Louisville’s nonprofi ts were also Dayton, OH (Health), and Omaha, NE (Arts, Culture, represented in the sectors of Religion and Public and and Humanities) ranked fi rst among peer cities in total Societal Benefi t, 8% and 13% respectively. Accumulated revenue levels in each of the indicated subsectors for both data on the revenue totals of religion nonprofi ts were not adjusted and non-adjusted fi gures. available, however, since those groups were not required to fi le the annual IRS Form 990, 990-EZ, 990-PF or In Louisville, these four subsectors comprised not 990-N ePostcard. only 72% of the total nonprofi ts but also 93% of total nonprofi t revenue excluding hospitals. Of the Louisville’s positioning in each of the subsectors approximately $3.6 billion in total revenue generated highlighted in the study consistently demonstrates a by non-hospital nonprofi t organizations in 2011, over ranking among its peer cities higher than population $3.3 billion was generated by those nonprofi ts in the and nonprofi t size would suggest. Th ese measures, subsectors of Health (Other), Human Services, Arts, and based on total revenue, reveal how each subsector of Education. Th e Arts, Culture, and Humanities nonprofi ts nonprofi ts supports the whole.

Sector Distribution by Number Revenue Distribution of Nonprofits Arts, Culture, Humanities 3% Other Arts, Culture, 7% Humanities 12% Other Health 28% (Other) 10% Human Services 26% Health (Other) 46% Education 19% Human Services Education 31% 18%

2013 Survey Report 11 Louisville’s Nonprofit Subsectors

Health (Other) Louisville’s number of health nonprofi ts, Louisville’s health institutions made up the largest excluding hospitals, make up only 10% portion of its total revenue among all nonprofi t organizations. Louisville’s hospital revenue alone made of the sector but contribute 46% of total up 54% of total nonprofi t revenue, while nonprofi ts sector revenue. Levels totaling more than classifi ed as Health (Other) made up 46% of total non-hospital revenue. Th e $4.2 billion generated $1.6 billion rank Louisville second among through hospital revenue in 2011 also totaled more peer cities in non-hospital health revenue. than the aggregate revenue of all other nonprofi ts during that same fi scal year ($3.6 billion). Th e only In 2011, active and registered health-related nonprofi ts other cities where hospital revenue was greater than in the Louisville MSA totaled 247, about 10% of the total the combined revenue of all non-hospital organizations nonprofi t sector. Th eir combined revenue totaled more were Cincinnati, Indianapolis, Jacksonville, Memphis than $1.6 billion that year. Th ose fi gures brought the average and Omaha. Louisville health-related nonprofi t revenue to approximately $6.7 million. Th ose same fi gures adjusted for Louisville’s Health, Other Health, Other total population averaged $1,277 per resident. Both MSA as % of Total Revenue % of fi gures ranked Louisville second among the peer cities. Nonprofi ts Total Revenue In the other three subsectors (Arts; Human Services; Birmingham 10% 37% Education) some cities ranked signifi cantly diff erently Charlotte 9% 5% between adjusted totals for nonprofi ts vs. per capita breakdowns. However, the graph on the following page Cincinnati 10% 40% shows that rankings based on the health revenue totals Columbus 9% 23% adjusted for number of nonprofi ts and population did not vary signifi cantly. Th e data points for both levels – Dayton 9% 65% revenue per nonprofi t and revenue per resident – showed a Greensboro 10% 21% steady downward curve. Cities retained a similar ranking or moved only a couple spots between total revenue per Indianapolis 9% 29% nonprofi t and total revenue per resident. Th e chart (at Jacksonville 11% 33% left) helps to explain the low variance in total revenue per nonprofi t by showing that all peer cities fell within the range Kansas City 9% 30% of 9% to 11% of health nonprofi ts making up the sector. Louisville 10% 46% In Education, there was a 13% variation between some cities in the size of the subsector making up the whole sector. Memphis 9% 42% Much like the other major nonprofi t subsectors Nashville 9% 17% highlighted, the leading city’s total revenue level radically Omaha 10% 18% exceeded that of the second highest. Dayton’s total revenue Raleigh 10% 14% per nonprofi t averaged an astounding $19.4 million while per capita totals equaled $3,434. With 149 total health Richmond 10% 34% nonprofi ts in Dayton, those organizations represented 9% of the total nonprofi ts but generated 65% of the total Th e distribution of Health (Other) nonprofi ts in the sectors’ revenue. Upon further investigation and data peer cities all fell within the range of 9%-11% of the collection, it was found that Dayton’s high level of revenue total nonprofi t sector. However, the percentage of total can be attributed to a single nonprofi t agency in the Dayton revenue that was derived from Health (Other) nonprofi ts MSA called Caresource. In 2011, Caresource reported gross ranged from 5% (Charlotte) to 65% (Dayton). Louisville receipts of $2.4 billion (NCCS). Th at total represents over ranked second behind Dayton with 46%. 75% of the entire Health (Other) revenue in the MSA.

12 Center for Nonprofit Excellence Louisville’s Nonprofit Subsectors Total Revenue (Health, Other) $25,000,000 $5,000

■ Total Revenue (Per NP) $20,000,000 $4,000 Total Revenue (Per Capita)

$15,000,000 $3,000

$10,000,000 $2,000

$5,000,000 $1,000

$0 $0

Dayton Omaha Raleigh Memphis Cincinnati Nashville Columbus Richmond Charlotte Birmingham Indianapolis Kansas City Jacksonville Greensboro Louisville (2/2)

2013 Survey Report 13 Louisville’s Nonprofit Subsectors

Education was over $7,000,000 while per capita revenue was over $2,739. In the breakdown of average revenue per Louisville’s education subsector combined institutions nonprofi t, Nashville outpaced Dayton at a ratio of 2.5:1 of higher education and those that provided other and Louisville at 5:1. Adjusted for population size, educational programs and services to the community. Nashville outperformed Columbus (ranked second) It ranked sixth in adjusted revenue per nonprofi t and by a ratio of almost 3:1 and Louisville at 5:1. Upon seventh in adjusted revenue per capita. Th is put Louisville further investigation and additional data collection, higher than its relative ranking in population and total the signifi cant gap in revenue levels can be attributed number of education nonprofi ts (ninth). to Nashville’s major research universities. Vanderbilt Of the 15 peer cities, Nashville’s education revenue University alone brings in $3 billion of the total $4.3 levels far exceeded that of any of the other cities. billion generated each year in the Education subsector. Average revenue per education nonprofi t in Nashville Total Revenue (Education) $9,000,000 $3,000 ■ Total Revenue (Per NP) $7,500,000 $2,500 Total Revenue (Per Capita) $6,000,000 $2,000

$4,500,000 $1,500

$3,000,000 $1,000

$1,500,000 $500

$0 $0

Dayton Omaha Raleigh Nashville Columbus Memphis Charlotte Cincinnati Richmond GreensboroKansas City Jacksonville Indianapolis Birmingham Louisville (6/7)

14 Center for Nonprofit Excellence Louisville’s Nonprofit Subsectors

Percent of Nonprofits and % of Total Revenue (Education) 70% ■ % of Total Nonprofi ts 60% ■ % of Total Revenue

50%

40%

30%

20%

10%

0%

Raleigh Omaha Dayton Charlotte Richmond Cincinnati Columbus Nashville Memphis Indianapolis Greensboro Jacksonville Louisville Kansas City Birmingham Th e graph better illustrates the relationship between up an astounding 62% of its overall nonprofi t sector the number of education nonprofi ts and the amount of revenue. revenue those institutions generate for the entire sector. In Raleigh, this sector made up 23% of its total sector Th e Louisville MSA reported a total of 443 Education and brought in 35% of total revenue. However, the two nonprofi ts in 2011. Th ose 443 organizations made variables do not have a direct relationship. A higher up 19% of the Louisville nonprofi t community and number of nonprofi ts does not refl ect a higher percentage contributed 19% to the total revenue. In Nashville, of revenue from the education subsector. Th is is further with a relatively similar number of education nonprofi ts illustrated in the graph above. representing the sector (17%), education revenue made

2013 Survey Report 15 Louisville’s Nonprofit Subsectors Human Services Charlotte had the highest levels of revenue generated by the human services subsector when adjusted for both total Louisville’s human services nonprofi t sector included 733 nonprofi ts and residents. While its average subsector size nonprofi t organizations in 2011. It was the largest subsector was about a third of the total, similar to other peer cities, represented in Louisville – covering 31% of the total it pulled in nearly three-quarters of its total revenue from community. Th e portion of the total revenue produced by those nonprofi ts. Its total revenue generated by human the sector was 26%. Th ough a majority of the peer cities’ services was nearly $4.5 billion in 2011. human services subsectors represented a sizeable portion of the total sector – on average approximately one-third of the Charlotte also ranked fi rst in total revenue per resident total – revenue percentages did not refl ect that same share. with a staggering $2,500 fi gure – twice as much as Only fi ve of the fi fteen MSAs generated an equal amount or Indianapolis which was second with $1,020. Charlotte’s more in total revenue than their market share. human services revenue is aff ected largely by the American National Red Cross Shared Services Center Louisville ranked fi fth in total revenue per nonprofi t and which accounted for $3.7 billion in gross receipts in seventh in total revenue per resident. Its human services 2011 (NCCS). Th at amount alone makes up over 80% subsector created $924 million in 2011 and was the of the human services subsector revenue in Charlotte. second largest subsector in terms of revenue generation behind health organizations.

Total Revenue (Human Services) $6,000,000 $3,000 ■ Total Revenue (Per NP) $5,000,000 $2,500 Total Revenue (Per Capita) $4,000,000 $2,000

$3,000,000 $1,500

$2,000,000 $1,000

$1,000,000 $500

$0 $0

Omaha Raleigh Dayton Charlotte Memphis Cincinnati Nashville Columbus Richmond BirminghamIndianapolis Jacksonville Kansas CityGreensboro Louisville (5/7) Percent of Nonprofits and Percent of Total Revenue (Human Services) 80% ■ % of Total Nonprofi ts 70% ■ % of Total Revenue 60% 50% 40% 30% 20% 10% 0%

Dayton Omaha Raleigh Charlotte Cincinnati Columbus Memphis Nashville Richmond Birmingham GreensboroIndianapolisJacksonvilleKansas City Louisville

16 Center for Nonprofit Excellence Louisville’s Nonprofit Subsectors Arts, Culture, and Humanities by nearly 100 percent when adjusted for total nonprofi ts. It passed its second closest competitor, Raleigh, NC, In the Greater Louisville area there were 292 registered with nearly three times as much in total revenue when and active Arts, Culture, and Humanities nonprofi ts that adjusted for population size. Upon further research, no accumulated total revenue of over $106 million in 2011. data were found to support this anomalous result. Th at total put Louisville seventh in per capita and per nonprofi t revenue measures when adjusted for size. Th e average Louisville arts nonprofi ts generated $365,000 of revenue last year; the per capita breakdown was $83. Arts, Culture, and Humanities nonprofi ts composed While Louisville ranked in the top half of the peer cities, 12% of the entire nonprofi t community in Louisville its fi gures actually fell below the mean of $396,000 per and accounted for 3% of total non-hospital nonprofi t nonprofi t and $95 per capita. budgets. Th e peer cities averaged a similar breakdown with Arts, Culture, and Humanities nonprofi ts making up Revenue from Arts organizations is generated from a few approximately 3% of the total sector’s revenue. primary sources: earned income, private donations and public sector funding. National statistics showed that Th e only exception was Omaha, NE, where Arts, earned income made up about 60% of total revenue, Culture, and Humanities nonprofi ts made up 13% of including ticket sales, fundraising events, subscriptions, total nonprofi ts while Arts-generated revenue was 10% gift shop sales, investment income and dues (Americans of the total non-hospital revenue. Omaha’s arts subsector for the Arts, 2011). overtook its second closest competitor, Indianapolis, IN, Total Revenue (Arts, Culture, Humanities) $1,400,000 $350 ■ Total Revenue (Per NP) $1,200,000 $300 Total Revenue (Per Capita) $1,000,000 $250 $800,000 $200 $600,000 $150 $400,000 $100 $200,000 $50 $0 $0

Omaha Raleigh Dayton Nashville Charlotte Cincinnati Memphis Columbus Richmond Indianapolis Kansas City JacksonvilleBirminghamGreensboro Louisville (7/7) Percent of Nonprofits and % of Total Revenue (Arts, Culture, Humanities) 16% ■ % of Total Nonprofi ts 14% ■ % of Total Revenue 12% 10% 8% 6% 4% 2% 0%

Dayton Omaha Raleigh Charlotte Cincinnati Columbus Memphis Nashville Richmond Birmingham GreensboroIndianapolisJacksonvilleKansas City Louisville

2013 Survey Report 17 Louisville’s Nonprofit Subsectors Revenue Sources Th e billions of dollars that Louisville nonprofi ts generated The largest percentage of nonprofi t annually stemmed from several diff erent revenue sources. revenue in Louisville was generated Th e percentages here represent revenue levels for non- hospital nonprofi ts in 2010 who reported gross receipts of through Program Services and at least $25,000 and fi led Form 990 or 990-EZ. Contracts (68%) followed by Louisville Nonprofit Revenue Sources Contributions, Gifts and Grants (26%) Dues, Net Sales and Other Income 4% Th e second largest source of nonprofi t funding came from contributions, gifts and grants. Th ose funding streams comprised 26% of the total dollars received Program Services Contributions, by Louisville nonprofi ts in 2010. Compared to the rest and Contracts Gifts and Grants of the MSAs, Louisville fell below the average of 32.5% 68% 26% in monies coming from contributions, gifts and grants. Louisville’s ranking among the peer cities is 11th out of 15. Raleigh and Memphis both received over 50% of their total nonprofi t revenues from this single source Net Special Events Income while Dayton received less than 15%. Th ose MSAs that Investment 0.5% showed smaller revenue stemming from contributions, Data fi gures have been rounded Income 2% gifts and grants compensated in the area of program services and contracts, and vice-versa. Th e largest proportion of Louisville’s nonprofi t sector revenue came from program services and contracts. A relatively small percentage of total revenue for Program services were reported as activities that form the nonprofi ts came from special events, investments and basis of an organization’s tax exemption. It also included dues. Net special events income composed an average of unrelated trade or business activities and income from about 0.5% of total revenue – the average among peer program-related investments. In the area of Program cities. Louisville ranked fi fth and shared that ranking with Services and Contracts, Louisville ranked third with two other cities. Louisville also tied for 11th in investment 68% of total revenue compared to an average of 61% income with about 1.5% compared to the peer city generated by its peer cities. When hospital revenue was average of 2.1%. In the area of dues, net sales and other incorporated into total revenue, the percentage jumped income, Louisville ranked ninth in revenue with 3.6% – from 61% to 82.7% and second among peer cities. falling just below the peer city average of 3.9%. Program Services as Percent of Total Revenue ■ Program Svcs as % of Total (Excluding Hospitals) ■ Program Svcs as % of Total (All) ■ Program Svcs as % of Total (Hospitals) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Raleigh Omaha Dayton Charlotte Richmond Cincinnati Columbus Nashville Memphis Indianapolis Greensboro Jacksonville LouisvilleKansas City Birmingham 18 Center for Nonprofit Excellence Louisville’s Nonprofit Subsectors Contributions as Percent of Total Revenue ■ Contributions as % of total (Excluding Hospitals) ■ Contributions as % of Total (All) ■ Contributions as % of total (Hospitals) 60%

50%

40%

30%

20%

10% 0%

Raleigh Omaha Dayton Memphis Charlotte Richmond Cincinnati Columbus Nashville Birmingham Kansas City Jacksonville GreensboroIndianapolis Louisville (11) Excluding Hospitals Contributions, Net Special Investment Program Services Dues, Net Sales Gifts & Grants Events Income Income & Contracts & Other Income * Louisville 26.2% (11) 0.5% (5) 1.5% (11) 68.2% (3) 3.6% (9) Peer City Average 32.5% 0.5% 2.1% 61.0% 3.9% Individual Contributions and contribution as a proportion of AGI. Despite having a Charitable Deductions lower average AGI, Louisville’s average giving ranks 10th among its peers in individuals contributing a higher Th e Louisville nonprofi t community received 26% of portion of their income to charity. its total revenue, approximately $936 million, from contributions, gifts and grants. Th is total included funding Th e graph below shows no direct relationship between from governmental agencies, foundations, organizations the Average Adjusted Gross Income and deductions as a and individuals. Specifi c data on individual giving were also percentage of the AGI. It also shows no direct relationship compiled and available for each of the MSAs included in this between contributions as a percentage of AGI. MSAs, study. It revealed the level at which individuals in each city in general, are shown to make larger deductions despite gave to charities in relation to their adjusted gross income. income levels. Th e two cities with the highest deductions as a percentage of AGI were Charlotte and Birmingham. Louisville ranked 13th among the 15 peer cities in Individuals in those cities rank sixth and eighth in average average Adjusted Gross Income (AGI), reported on Adjusted Gross Income but still give a larger proportion tax returns in 2008 at $46,745. Th e average itemized than those in MSAs that, on average, earn more. charitable contribution was $865 per tax return, a 1.8% Average Adjusted Gross Income Reported on Tax Returns (2008) ■ Average AGI per Tax Return Contributions as % of AGI Deductions as % of AGI $70,000 21% $60,000 18% $50,000 15% $40,000 12% $30,000 9% $20,000 6% $10,000 3% $0,000 0%

Omaha Raleigh Dayton Nashville Memphis Richmond Charlotte Columbus Cincinnati Louisville(13/10) JacksonvilleIndianapolis BirminghamKansas City Greensboro 2013 Survey Report 19 Louisville’s Nonprofit Subsectors

Volunteering Th e Corporation for National and Community Services Th e Corporation for National and Community Service reported in December of 2012 that Louisville’s volunteer (CNCS) reported that Louisville residents contributed rate grew by 7.2 percent for 2011, placing it in the top an average of 26.8 hours of service annually from fi ve cities having the fastest growing rates in the country. 2008 to 2010. Th is ranked Louisville 12th among its Perhaps the emphasis on Compassionate Louisville by peer cities in volunteering. Th e CNCS calculated that Mayor Greg Fischer and a host of civic groups played a $535.9 million of service was contributed by 240,900 part in that ranking. volunteers during 25.1 million hours of service. Volunteer Hours Per Capita (2008-2010) 50

40

30

20

10

0

Omaha Dayton Raleigh Nashville Columbus Richmond Charlotte Memphis Cincinnati Greensboro Indianapolis Jacksonville Birmingham Kansas City Louisville (12)

20 Center for Nonprofit Excellence Summary of Comparisons

Total Revenue of Subsectors ■ Health, Other ■ Human Services ■ Arts ■ Education $5,000,000,000 $4,500,000,000 $4,000,000,000 $3,500,000,000 $3,000,000,000 $2,500,000,000 $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,000 $0

Dayton Omaha Raleigh Charlotte Cincinnati Columbus Louisville Memphis Nashville Richmond Birmingham GreensboroIndianapolisJacksonvilleKansas City

Average Total Average Total Average Total Average Total Revenue Revenue Average Total Average Total Revenue Revenue Average Total Popul. Total Pop: (NPs including (NPs excluding Revenue Revenue (Human (Arts, Culture, Revenue Vol. MSA Rank NPs NPs Hospitals) hospitals) (Hospitals) (Health, Other) Services) Humanities) (Education) Hrs.

Per Per Per Per Per Per Per Per Per Per Per Per Per Per NP Resident NP Resident Hospital Resident NP Resident NP Resident NP Resident NP Resident

Birmingham 12 11 9 12 12 8 10 7 7 4 6 2 3 14 13 15 15 7

Charlotte 4 6 13 10 13 4 3 13 3 15 15 1 1 5 9 11 11 10

Cincinnati 1 3 8 2 2 10 11 5 8 5 5 8 8 6 6 12 13 13

Columbus 3 2 1 9 6 9 6 11 15 9 9 11 5 10 10 4 2 6

Dayton 14 14 10 1 1 1 1 9 6 1 1 13 10 11 8 2 3 14

Greensboro 15 15 11 11 11 12 13 8 5 13 13 15 6 15 15 8 8 1

Indianapolis 5 4 2 8 4 7 5 3 14 6 4 3 2 2 3 13 6 3

Jacksonville 7 10 14 6 10 13 15 6 2 10 12 6 11 13 14 10 12 5

Kansas City 2 1 3 13 9 11 8 12 13 8 7 14 9 8 5 9 9 8

Louisville 9 9 12 3 5 4 7 2 4 2 2 5 7 7 7 6 7 12

Memphis 8 12 15 4 8 6 9 10 1 3 3 7 14 9 12 5 10 11

Nashville 6 5 7 7 7 2 2 14 9 7 8 10 12 4 4 1 1 4

Omaha 13 13 6 5 3 5 4 4 10 12 10 4 4 1 1 3 4 2

Raleigh 11 8 4 15 14 14 12 1 12 14 14 9 13 3 2 7 5 15

Richmond 10 7 5 14 15 15 14 15 11 11 11 12 15 12 11 14 14 9

2013 Survey Report 21 Survey of Nonprofits in the Louisville MSA

Demographics of Nonprofi ts in the Survey the Internal Revenue Service and the National Center for Charitable Statistics. Human Services (48%) and A total of 209 of nonprofi ts participated in the online Education (37%) were the most common sectors survey. Respondents were allowed to skip questions, so reported. Public and Societal Benefi t (31%), Health not all questionnaire items total to this fi gure, but every Care (22%) and Arts and Humanities (14%) were the question was answered by at least 178 organizations. Th e only other categories checked by at least ten percent of participants represent a diverse universe of organizations the respondents. based on staff and budget size, service sector, age and other organizational demographics. Multiple categories were selected by 43% of the survey participants, with two sectors checked by 20%, three Service Sector: To describe the service area of their sectors by 14% and 9% of the nonprofi ts reporting they organizations, respondents selected one or more of worked in four or more categories. the ten “broad group” categories used in the National Taxonomy of Exempt Entities (NTEE) system used by What subsector(s) best describes your organization? (Respondents could check more than one)

Education 37.3%

Arts, Humanities, and Culture 14.4%

Health Care 21.5%

Human Services 48.3%

Environment and Animals 8.1%

International 3.3%

Religion-related 9.6%

Mutual Benefi t 3.8%

Public and Societal Benefi t 30.6%

Unknown or Unclassifi ed 2.9%

10% 20% 30% 40% 50%

22 Center for Nonprofit Excellence Survey of Nonprofits in the Louisville MSA Th ere were 118 nonprofi ts (57%) in the survey that Exactly half of the 206 nonprofi ts that provided budget checked only one sector, and 39% of these reported information reported their operating budgets increased their sector as Human Services. Of those checking only over the preceding year, with 28% reporting decreases one category, no other category was selected by more and 22% no change. Organizations with smaller than 16%. budgets were much less likely to report an increase from Category of those checking only the preceding year, with only 18% of those with budgets one sector under $100,000 seeing an increase in budget over the Unknown or prior year. Th is contrasts sharply with nonprofi ts with Mutual Benefit Unclassified much larger budgets, as 86% of the organizations with 1% 3% Religion-related budgets greater than $20 million reported an increase 3% Public and over the previous year, and 76% of those with budgets International Societal 1% Benefit between $5 million and $20 million had an increase. Of 11% Environment Education those indicating an increase, 90% saw their budgets grow and Animals 16% by 10% or less, and 92% of those with decreases had 8% declines of ten percent or less. Arts, Humanities, and Culture 8% Current Budget Size (percent) Human Services Health Care Budget $100k to $1m to $5m to 39% 14% Change < $100k < $1m < $5m $20m > $20m Increase 17.9 50.0 52.8 76.5 85.7

Decrease 46.4 29.8 24.5 17.6 7.1

No Change 35.7 20.2 22.6 5.9 7.1 Operating Budget Size: Th e nonprofi ts in the survey Full-time Equivalencies: Staff size varied from zero were fairly evenly divided among those with budgets un- employees (9%) to one nonprofi t that had 775 full-time der $1 million (57%) and those with budgets larger than equivalencies (FTE). More than half the nonprofi ts this (43%). A further breakout of operating budget sizes (51%) indicated having six or fewer FTE and 68% had reveals that 14% had budgets under $100,000, 43% had fewer than 20. Staff s of 100+ employees were reported by budgets between $100,000 and $1 million, 27% reported 11% of the nonprofi ts. budgets between $1 million and $5 million, and 16% had budgets over $5 million. Number of Full-Time Equivalencies Percent Approximate Annual Operating zero FTE 9.7 Budget 1 or less FTE 10.7

2 – 4 FTE 22.4 $5M to >$20M 7.1% < $20M 5 – 9 FTE 13.8 8.7% <$100K 14.3% 10 – 19 FTE 11.7 20 – 99 FTE 20.4

$1M to < $5M 100+ FTE 11.2 27.0%

$100K to < $1M 42.9%

2012 Survey Report 23 Survey of Nonprofits in the Louisville MSA

Age of the Nonprofi t Corporations: A large Th is contrasts sharply with nonprofi ts 50 years or older, majority (85%) of the nonprofi ts in the survey reported with only 13% in the oldest group reporting fewer being at least 10 years old, with 33% between 10-24 years than fi ve FTE. All of the nonprofi ts with 100 or more old, 31% between 25-49 years old and 21% over 50 years employees were at least 10 years old. old. Th e average age of the nonprofi t corporations in the survey was 37 years. It takes time to build staff. Only two Age of the Nonprofit of the 28 nonprofi ts less than 10 years old reported having 20 or more full-time < 10 years old 14.9% equivalencies, while 67% of nonprofi ts 50 years or older had 20 or more staff. 10–24 years old 32.7%

25–49 years old 31.2% Age of the Nonprofi t Corporation (percent)

Number of 50+ years old 21.3% <10 10 - 24 25 - 49 50+ Full-Time years old years old years old years old 10% 20% 30% 40% Equivalencies < 5 FTE 75.9 61.9 32.8 12.5

Older nonprofi ts were much more likely to have larger staff s 5 - 19 FTE 17.2 27.0 31.1 20.0 than younger organizations, with 76% of the nonprofi ts less 20+ FTE 6.9 11.1 36.1 67.5 than fi ve years old having four or less full-time equivalencies.

24 Center for Nonprofit Excellence Board of Directors

Board Members: Having all allowed board member Board Member Demographics: Th e nonprofi ts in the positions fi lled is rare. Among the nonprofi ts reporting survey were asked to identify sex, race and age characteristics that their bylaws set limits to the number of people who of their board members. Th ese were aggregated to generate a can serve on the board of directors, only 17% indicated composite percentage of board member demographics. Th e that all of the allowed positions were currently fi lled, and reported gender breakdown was 55% female and 45% male. 41% had less than 75% of their member limit currently Th e age group representation had the great majority between occupied. Four nonprofi ts reported that they had only ages 41 and 65 years old (67%), with 19% between ages 21 one third or less of their board limit fi lled. to 40, and 14% over age 65. Only two board members were younger than 21. Having all allowed board member Th e ethnicity of the board members was reported as 10% Black, 87% White, 1% Asian, 1% Hispanic and less than positions fi lled is rare. Only 17% of 1% reported as “Other.” Relative to the 2010 Census data, the organizations indicated all of the the board memberships are slightly less diverse than the allowed positions were currently fi lled. general population in the Louisville MSA. Th e census data reported the metro population as 81% White, 14% Black, and all other race categories below 2%. Th e Hispanic population Board size limits of 16 or more were most common, can be of any race in census data, and the 2010 Census with 74% specifying at least that many seats, and almost counted less than 4% of the Louisville MSA as Hispanic. half (49%) of the nonprofi ts reported allowing 25 or Board Meetings: About a third of the nonprofi ts (31%) more board members. Twelve (7%) did not limit board indicated their boards met six times per year. Th e next most membership in their bylaws. common amounts were four times per year and twelve Number of Board Members Allowed Percent times per year, both reported by 17% of the respondents. < 11 8.4 Th e fewest board meetings reported were one per year by a single organization, and the most meetings, also reported 11-15 17.4 by a single nonprofi t, were fourteen times per year. 16-24 24.7 Average attendance rates of 76% or higher were reported 25-30 24.7 by 55% of the nonprofi ts, with 41% reporting an average meeting attendance between 51% - 75%, and only 4% of 31-70 18.0 the organizations indicating board attendance averaged No Limit 6.7 50% or less. Board Member Contributions: Almost all of the Th e actual number of members currently serving was nonprofi ts (94%) reported that at least one or more board substantially less than the allowed amount. While only one members made an annual contribution to the organization. organization limited the board to six or fewer members, Th e average annual board member donation varied from there were fi fteen nonprofi ts (8%) that reported they $25 to $10,000, with 86% reporting an average donation currently had six or fewer board members. of $1,000 or less. Number of Board Members Currently Serving Percent Board Member Tenure: Board members in general serve < 7 7.9 short tenures. Overall, only 14% of the nonprofi ts reported 7-14 30.0 an average tenure greater than six years, even though the most frequently reported average tenure was six years (24%). 15-19 23.2 Th e next most common average tenures were three years 20-24 18.4 (19%), four years (16%) and fi ve years (15%). One organization reported an average tenure of 25 years for its 25+ 20.5 board members, with 13 years the highest average reported No Limit 6.7 by any other nonprofi t. Term limits for board members were reported by 72% of the nonprofi ts.

2012 Survey Report 25 Fund Development Fund Raising Events: Th e nonprofi ts in the study split Percent with Annual Fund very evenly on whether or not they had an annual fund Annual Budget Development Campaign development campaign, with about half (51%) indicating < $25,000 0.0 they had an annual fund development campaign and 49% reporting they did not. Among those with an annual $25k to < $100k 18.8 campaign, 53% raised less than $100,000 and 22% raised $100k to < $1m 43.2 less than $25,000. At the opposite end of the fund raising $1m to <$5m 67.3 spectrum, 17% raised over $1 million. $5m to <$20m 68.8 Th e organizations with an annual development campaign were much more likely to report an increase in their > $20m 63.6 operating budget from the previous year, with 60% of this group having an increase, while only 38% of those Major Gifts: About a third of the organizations without an annual fund development campaign had a (31%) indicated that they have a major gift development budget increase. program. A “major gift” was defi ned as $10,000 or more Nonprofi ts with smaller budgets were much less likely to by 35% of these nonprofi ts, and 63% defi ned a “major have an annual campaign. None of the organizations with gift” as $1,000 to $5,000. less than $25,000 budgets, and only 19% of those with Other Fund Development: Only 23% of the budgets between $25,000-$100,000 had annual fund nonprofi ts had a planned giving program, but 26% stated development campaigns. that they were planning to develop one. About a third of the A large majority (78%) of the nonprofi ts held at least one nonprofi ts (38%) had endowments, and those that did were special fund raising event annually, with 85% reporting more likely to report an increase in their most recent budget that they held four or fewer such events in a year. (59% versus only 44% of those with no endowment). Financial Review and Accreditation

Financial Review: Audits were used by 75% of the Accredited by Other Groups organizations for their fi nancial review process. Th e Budget Size Yes No Unsure three other methods reported were Informal Staff /Board Review (13%), Review With Limited Assurance (7%) and < $25,000 40.0 60.0 0.0 Compilation With No Assurance (5%). $25k to < $100k 20.0 66.7 13.3 Accreditation/Certifi cation: About half of the $100k to < $1m 41.5 47.6 11.0 nonprofi ts (48%) were accredited by a professional or other $1m to < $5m 55.1 34.7 10.2 accrediting group, and 41% were certifi ed by the Better $5m to < $20m 68.8 18.8 12.5 Business Bureau. Th e larger the budget, the more likely a > $20m 81.8 18.2 0.0 nonprofi t was accredited, with 82% of those with budgets larger than $20 million and 69% of those between $5 million– Nonprofi ts that were accredited by outside groups were $20 million accredited. Fewer than half of the organizations more likely to have seen their budgets increase over the with budgets smaller than $1 million were accredited. previous year, with 59% of accredited organizations having a budget increase versus 42% of those that were Nonprofi ts that were accredited by not accredited. outside groups were more likely to have Budget Change a budget increase over the previous year, Accredited? Increase Decrease No Change with 59% of accredited organizations Yes 59.1 27.3 13.6 seeing an increase versus 42% of those No 41.6 31.2 27.3 that were not accredited. Unsure 36.8 21.1 42.1

26 Center for Nonprofit Excellence Collaboration With Other Nonprofits

Working With Other Organizations: Th e most Regarding the extent to which their nonprofi t worked with frequently cited levels of formal collaboration with fi ve categories of organizations (Partner Organizations Within other nonprofi ts were Network (73%), Programs (73%) Same Subsector, Partner Organizations Outside Subsector, and Funding Opportunities (47%). Other types Government Agencies, Foundations, and For-profi t of formal collaboration were Offi ce Space (29%), Entities), by far the most frequently reported description Services, such as IT or marketing (25%) and was Cooperation. Th is level of collaboration was reported Administrative Staff (12%). most frequently across all fi ve categories of organizations, with Partner Organizations Outside Th eir Own Subsector Type of Formal Collaboration with Percent Who and Foundations the most common (each at 43%). For Other Nonprofi ts Checked Yes the other three categories, at least 37% of nonprofi ts reported Cooperation as their level of collaboration. Shared services (IT, marketing) 25.1% Th e highest extent to which the nonprofi ts could report Administrative staff 12.0% working with other organizations was Collaboration Funding opportunities 47.3% (members belonging to one system, mutual trust, Offi ce space 29.3% consensus-reached decisions), and the only category for which this was reported by more than 7% was Partner Network (members, partners) 72.5% Organizations Within the Same Subsector, with 16% of the Programs 72.5% nonprofi ts collaborating with organizations in that category. Other (please specify) 17.0% Formal, written agreements to guide partnerships with other organizations were reported by 46% of the nonprofi ts.

Partner Partner Organizations Organizations For-profi t Within Same Outside Government Entities or Extent Working With Other Organizations Subsector Subsector Agencies Foundations Corporations

No Collaboration (no communication) 2.2% 6.2% 8.9% 18.5% 8.4%

Networking (basic awareness, little communication, 10.5% 24.7% 17.8% 22.5% 35.8% independent decision making)

Cooperation (information exchange, formal 37.0% 43.3% 37.2% 43.3% 38.0% communication, independent decision making)

Coordination (information/resource sharing, 19.9% 14.6% 22.8% 10.7% 10.6% frequent communication, shared decision making)

Coalition (idea/resource sharing, prioritized 14.4% 5.6% 6.7% 2.8% 3.9% communication, vote in decision making)

Collaboration (members belong to one system, 16.0% 5.6% 6.7% 2.2% 3.4% mutual trust, consensus-reached decisions)

2012 Survey Report 27 Outcomes

Measuring Outcomes: Seventy-six percent of the While 93% indicated that they track the number of nonprofi ts reported having a process to “measure impact/ people they serve, almost as many (87%) reported outcomes on the lives of the people their organization obtaining qualitative feedback from the people to whom serves.” Th e most frequent intervals for having these the services are provided. Of the specifi c methods used measurements in place were Midterm, 6-12 months for evaluation, the most common were Questionnaires, (49%), Immediately following service (37%), Short- Surveys, Checklists (91%), Interviews (57%), term, 0-6 months (31%) and Long-term, 1-2 years Observation (51%) and Document Review (46%). (31%). Only 19% of the nonprofi ts used an independent A large majority of the nonprofi ts indicated that the evaluator to measure program impacts/outcomes. quality and effi ciency of their measurement of outcomes could be improved if additional resources were available Most organizations (67%) reported that (67%). A few organizations (16%) reported that their measurement process could be improved with their measuring their outcomes could be current resources, and 17% stated that their current improved for quality and effi ciency if measurement process was suffi ciently accurate and more resources were available for their effi cient. measurement processes.

Human Resources

Professional Development: Almost all of the nonprofi ts (92%) indicated that their employees received Volunteers are an important resource some professional development training annually. to almost all nonprofi ts, with 97% However, the amount of training varied considerably, with 22% reporting staff received fewer than ten hours of of the organizations indicating training and 50% receiving more than 20 hours annually. that they used volunteers in the Use of an internal coaching model was reported by 26% of the organizations in the survey. past year. Over 78% had at least 25 volunteers, and 35% reported using Human Resource Policies: Most of the organizations in the survey reported having up-to-date position 200 or more volunteers. descriptions (85%) and a current policy and procedures manual (85%). Most commonly, formal written feedback is off ered to employees once annually (75%). Th e only Number of Volunteers Percent other signifi cant interval reported for formal reviews of < 10 volunteers 7.5 employees was twice a year (13%). No formal written feedback was reported by 8% of the nonprofi ts. 10-24 volunteers 13.8 Volunteers: Volunteers are an important resource 25-99 volunteers 28.7 to almost all nonprofi ts. Over a third (35%) of the 100-199 volunteers 14.9 organizations reported having over 200 volunteers in the previous year. Over 78% utilized at least 25 volunteers. 200+volunteers 35.1 Only 3% of the respondents indicated that they did not use volunteers in the past year.

28 Center for Nonprofit Excellence Planning

Executive Director: Th e Executive Directors of the currently working from a long-term or strategic plan. nonprofi ts in the survey had been in their position an Sources of information that were cited for long range average of 9.1 years. Th e range of experience among the planning were “internal data” (96%), “external data” Executive Directors varied greatly among the nonprofi ts, (84%) and “customer groups” (46%). with 37% having 4 years or less tenure and 21% having 15 years or more. Less than half of the organizations (40%) had a method in place for executive succession. 82% of the nonprofi ts engaged Planning Activities: About two thirds of the in long-term planning, and 74% organizations held annual retreats or planning sessions indicated they were currently working for staff members (62%) and board members (68%). from a long-term strategic plan. Regarding long-term planning, 82% said they engaged in long-term planning and 74% indicated they were

Advocacy

Types of Advocacy: “Grassroots lobbying” was by “voter education” (15%) and “voter registration” (13%). far the most common form of advocacy reported, with Only 7% of the organizations reported making a 501(h) 83% of the nonprofi ts involved at this level. Th e next election for advocacy activities. most common types were “direct lobbying” (29%),

2012 Survey Report 29 Conclusions and Recommendations

So, what have we learned? Board attendance, the level that at which nonprofi ts are independently reviewed, the extent to which they We learned that we have fewer but larger nonprofi ts collaborate with for-profi ts, other nonprofi ts and the than those in our peer cities, and that larger nonprofi ts government are among the kinds of data we measured. fared better fi nancially than smaller ones in 2011. Th e Some strengths can be found in the level of collaboration good news is that larger nonprofi ts appear to weather and independent reviews, but a large number of board tough times better than smaller ones and an improved vacancies are unfi lled. More comparison data is necessary economy of scale exists within larger organizations – to better interpret some of these results, and better trend facts that place our nonprofi t sector in a relatively methodology to measure them is needed. positive position. The Center for Nonprofi t Excellence anticipates We learned that our healthcare related nonprofi ts this report to be the fi rst in a biannual series with the generate above the peer city median in dollars, but from purpose of describing the impacts and changes in ensuing other study comparisons that our health and well-being years of the Louisville area nonprofi t sector in the context are often worse. Louisville may be a good place to be of its peer cities. Th e survey of nonprofi ts will also if you need healthcare, but we have much room for continue in future reports, with a continued exploration improvement in leading healthy lives. of practices that may contribute, both positively and And, as a community, we invest a relatively high negatively, to the successes of these charitable institutions. dollar amount on education but our overall education While the initial survey undertaken for this report off ered performance cries out for better results. We rank behind numerous insights about staffi ng, training, operations, our peer cities in the level of baccalaureate and associate funding and board membership, future surveys should degrees, but we had the fastest rate of growth among consider these results to refi ne the inquiries and off er peer cities this past year in the number of our residents more precise language and explanations of the concepts earning BA degrees (reported by the Greater Louisville that are being measured. Additional methods for Project, 2012). With human services, our nonprofi ts are obtaining up-to-date contact information and for operating fi nancially pretty much at the median level, publicizing and encouraging greater participation by while many of our social and economic gauges suggest area nonprofi ts should also be made. Social media we should do more. aandnd aaffiffi liliateate networnetworksks ooffff er ppotentiallyotentially ssignifiignifi cant opopportunitiesportunities to encouraencouragege pparticipationarticipation iinn Overall, we learned that our nonprofi ts do better than ffutureuture surveys at llittleittle aadditionaldditional costcost.. the average with program fees and contracts, but fall below the mean in contributed dollars and interest earnings. Surprisingly, our arts, despite the success achieved by the Fund for the Arts, lag below the mean in the number of dollars generated by and support enjoyed for our arts groups locally. We generate $83 per resident for the arts, compared to a median of $95 among our peer cities. We now have a baseline on some important measures related to nonprofi t organizational performance.

30 Center for Nonprofit Excellence Notes and Acknowledgements

Where do we go from here? Again, we extend a very special thanks to Eric Schneider, the lead consultant on the combined studies Given what we have learned from this study, how contained in this report. Sara Renn was the team’s shall our civic sector leaders position our nonprofi t lead researcher and was assisted by Morgan Eklund, community to work in such a way that the Louisville Alexander Narang and Lisa Van Copponelle. As one area becomes recognized for unparalleled innovation, can imagine, gathering, compiling and reporting these eff ective partnerships and an unrelenting focus on results fi ndings was an exceptionally arduous task – this team that will build a better community? How shall we of researchers often went well beyond the call of duty. defi ne and measure that march toward excellence. Let the conversations begin anew – and let us measure our Finally, we salute the Brown-Forman Corporation, whose grant support for the work of the Center progress. for Nonprofi t Excellence, and so many other area As mentioned, the Center for Nonprofi t Excellence nonprofi t organizations, make our vision for a national seeks to conduct a bi-annual peer city study and survey model nonprofi t community in Greater Louisville through the year 2020, driven by a vision that our an imaginable one. Additional appreciation for civic nonprofi t community will become a top performer in sector support goes to our Metro United Way, Kosair enhancing our quality of life – measured by health, well- Charities, the UPS Foundation and the Donors Forum being, civic engagement and lifelong learning. of Kentuckiana.

Board of Directors Staff

Matthew Bacon Angelo Stekardis, Merv Antonio, Director of Learning Mark Carter Board Chair Angela Burton, Sara Eitel Robert Taylor, Membership & Development Coordinator Maggie Elder Board Emeritus Kevin Connelly, Dan Fox Jane Tierney Chief Executive Offi cer

Judy Freundlich Tiell Eric Schmall, Helene Tracey Director of Consultation Joseph Hensley, Secretary Jim Turner, Darlene Whitney, Director of Operations Theodore “Tad” Myre Immediate Past Chair VISTAs Tom O’Bryan, Donald Vish Treasurer Erika Branch

Eileen Pickett Mary Gwen Wheeler Katye Ellison

2012 Survey Report 31 323 West Broadway, Suite 501 | Louisville, KY 40202 | (502) 315-2673 | www.cnpe.org

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