Nonprofits and the California Economy

Nonprofit organizations have a positive effect on and are a significant part of California’s economy. Although California is growing more slowly in the number of nonprofits when compared to the country as a whole, it is increasing faster in nonprofit revenue. Even California’s government agencies rely upon nonprofit organizations to serve the state’s communities.

Nonprofit Revenue and Assets

Nonprofit activity in California generates about 15% of California’s gross state product, including $40 billion in revenue from out of state sources. California nonprofits generate about $273 billion in annual revenue and hold about $436 billion in assets. Despite being tax-exempt, California nonprofit organizations pay about $37 billion in taxes each year.

The Workforce of Nonprofits

California nonprofit organizations are the third largest wage-payers in the state and fourth largest provider of jobs. Additionally, about 1 in every 14 jobs in California comes from a nonprofit organization. The nonprofit workforce in California is also more diverse by gender and race. California volunteers produce approximately $16.6 billion in unpaid labor each year (that is equivalent to the work of 331,058 full-time employees).

Nonprofit Services

California’s government agencies rely upon nonprofit organizations to provide services to California residents. Nonprofits provide healthcare and community services, build houses, operate parks, care for children, fight diseases, and protect natural resources, among other things. About 1/3 of Medicare and Medi-Cal services are provided by nonprofits. It is equally important to note that nonprofits receive about 30% of their revenues from government funding (based upon RRF-1 reporting).

Disparities Among Nonprofits

There are disparities in how funds are distributed among nonprofit organizations based upon where they are located in California. There are less nonprofits in rural areas, poorer communities, and communities of color. Organizations located in those areas have less resources. For example, in Colusa County, there are about $97 nonprofit dollars per 1,000 residents. However, in San Francisco County, there are about $14,071 nonprofit dollars per 1,000 residents. Generally, northern Californian nonprofits have more resources and assets and produce more revenue than Southern Californian nonprofits.

Despite the disparities, California nonprofits are essential to California’s economy. Californians generally have a positive view of nonprofit organizations and have more confidence in nonprofit organizations than in businesses or government agencies.

For more information regarding the statistics found in this article, please visit

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits, 4705 Laurel Canyon Blvd, #306, Studio City, CA 91607

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