February 2024 News for Nonprofits

Why Nonprofit Lobbying has Fallen

A new report from Independent Sector shows that nonprofit engagement in advocacy and lobbying has dropped off significantly over the past two decades. Just 31% of nonprofits surveyed report pursuing such activities over the last five years — less than half the percentage that did so in 2000.  Moreover, back then, more than half of public charities knew they could support or oppose federal legislation, but fewer than one-third know this today.

The report explores the falloff and examines how lobbying interacts with other forms of nonpartisan civic engagement. Among other things, it finds that mission is the biggest driver of lobbying. About 70% of nonprofits that engage in lobbying say their mission encourages it. Of those that don’t lobby, 56% indicate policy isn’t applicable to their mission. Almost 20% state their mission actually discourages advocacy.

Despite Economic Headwinds, Foundation Giving Rose in 2022

In the face of economic instability, private foundations nonetheless gave $111 million more in charitable aid in 2022 — $865 million, compared to $754 million in 2021. That’s according to a 2023 quantitative study of nearly 1,000 foundations with assets of $1 million to $500 million from Foundation Source, a provider of management solutions for private foundations.

In 2022, foundations made more and larger grants than in 2021. The average number of grants made annually per foundation increased from 31 to 33, while the average grant size grew from $25,000 to $28,000. Foundations continued to grant more than the required annual distribution of 5%, giving an average of 6.6%. These increases came despite a 31.5% drop in private foundations’ asset value and a 14.5% decline in growth.

What’s the Latest in Nonprofit Compensation Trends?

According to Candid’s 2023 Nonprofit Compensation Report, median compensation for nonprofit CEOs increased for all budget ranges from 2020 to 2021. However, organizations in the highest budget range (with budgets greater than $50 million) saw a decline of 0.9%. The report draws on IRS data from more than 123,000 exempt organizations for fiscal year 2021 and includes insights on the gender gap and other issues. The information can help nonprofits recruit and retain staffers, as well as avoid excessive compensation issues with the IRS.

The highest median executive compensation remained in science, technology, engineering and mathematics, and health-related areas. In contrast, religious institutions consistently have the lowest median compensation. Location plays a role, too: Organizations in the Midwest have the lowest median executive compensation, and those in the Northeast have the highest.