Nonprofit Sector in North Dakota: Challenges and Opportunities

1. Nonprofit Sector in North Dakota: Challenges and Opportunities Dr. Richard Rathge Professor and Director North Dakota State Data Center Impact Institute Capacity Building Workshop Fargo, ND April 19, 2010 North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

2. Presentation Objective: 1. To present demographic challenges facing ND’s nonprofit community. 2. To review key findings from research of the public charities in ND and MN. North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

3. Key Population Trends 1. Population consolidation 2. Rapidly shifting age distribution 3. Shifts in household composition 4. Workforce and economic issues This means who we serve, how we serve and where we serve them is changing North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

4. Population • North Dakota’s population peaked in 1930 at 680,845. • The July 1, 2009 population estimate for North Dakota totaled 646,865, an increase of 5,422 persons from 2008. Source: U.S. Census Bureau, Decennial Census and the Population Estimates Branch, http://www.census.gov/popest/estimates.php Prepared by the North Dakota State Data Center March 2010

5. North Dakota Cass County 4 similar counties 40 similar counties McIntosh County North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

6. North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

7. N.D. Rural-Urban Population Distribution, 1900-2020 Source: U.S. Bureau of the Census, Decennial Censuses. North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

8. North Dakota City Size: 2000 Chart taken from the May 2002 Issue of the Population Bulletin, published monthly by the North Dakota State Data Center (Vol. 18, No. 5). Source: U.S. Census Bureau, Census 2000. North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

9. 14 12 10 8 6 4 2 0 0 2 4 6 8 10 12 14 A Maturing Age Distribution, 2000(National data) 85+ 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 Female Male Population (in millions) Source: U.S. Census Bureau, International Data Base. North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

10. 14 12 10 8 6 4 2 0 0 2 4 6 8 10 12 14 A Maturing Age Distribution, 2020 85+ 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 Female Male Population(in millions) Source: U.S. Census Bureau, International Data Base. North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

11. Baby Boomers reach age 65 2.8 million beginning 2011 -- 4 million by 2020 or 5,000 a day (on average) Baby Boomers enter age 85 North Dakota State University, IACC Building, Room 424, Fargo, ND 58105 - Phone: (701) 231-8621 - URL: http://www.ndsu.edu/sdc Source: Older Americans 2004

12. Persons Ages 65 and Older as a Percent of the Total Populationin North Dakota by County: 2000Source: U.S. Census Bureau, Census 2000 North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

13. Persons Ages 65 and Older as a Percent of the Total Populationin North Dakota by County: 2020Source: North Dakota State Data Center, North Dakota Population Projections: 2005 to 2020, Sept. 2002 North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

14. 2000 Census – Rural and Urban Population Distributionsby Age and Gender for North Dakota Traditional Babyboom X Generation Y Generation North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

15. Population of Persons Ages 0 to 9 and Ages 65 and OlderNorth Dakota: 1890 to 2020 North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

16. Households by Type North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

17. Population Distribution by Age of Earner in North Dakota: 1980-2020 Peaked in 1990 Peaked in 2000 Relatively stable until 2005 Prepared by the North Dakota State Data Center March 2010

18. Change in Jobs between January 2007 and June 2009 Prepared by the North Dakota State Data Center March 2010

19. Estimates of North Dakota Charitable Giving, 2001-2055 North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

20. Nonprofit Sector Studies • Methods and Approach • ND: Examined top 100 public charities & 66 foundations • MN: Examined a random sample of top 100 public charities ($100,000+) & top 100 foundations • Used IRS records (Form 990) • Developed financial performance measures • Fiscal • Mission • Sustainability North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

21. Key Findings • Resources highly concentrated • Management & general expenses relatively low • Financial performance measures mixed Modest changes in approaches combined with partnerships can have high value impact on the nonprofit sector in ND or MN. North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

22. 501(c)(3) Public Charities in North Dakota by County: 2007 • The first number in each county represents the total number of 501(c)(3) public charities reported for that county. • The second number, in italics, represents the July 1, 2007 population estimate for that county. Sources: The Urban Institute, National Center for Charitable Statistics, NCCS Core File (Public Charities, circa 2007) and the U.S. Census Bureau, Population Division, Population Estimates Program. North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

23. Number of 501(c)(3) Public Charities and Total Population in Minnesota by County: 2007 North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

24. Concentration of wealth among North Dakota’s Top Public Charities: Assets vs Number, 2007 Assets Number Top 10% of public charities account for 59% of total assets 65% of total revenues 66% of total expenses North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

25. Concentration of wealth among Minnesota’s Top Public Charities: Assets vs Number, 2008 Assets of $100,000 or more Assets Number Top 10 public charities account for 42% of total assets 28% of total revenues North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

26. Impact of Potential Changes • Develop collaborative structure to leverage resources • Skills building • Fundraising • Marketing • Capacity building Consider: if the 10 largest charities in ND redirected 1% of expenses to collaborative support, the amount available for leveraging would be $16,076,688. (This is equal to total revenues for the smallest 141 nonprofits or 13% in ND.) Note: 1% redirection for foundations in ND = $127,839, (which would cover all revenues for the smallest 45 nonprofits). North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

27. Management and General Expenses among North Dakota Top Public Charities • North Dakota • Average Management & General Expenses = 12.4% of total expenses • 35% of top public charities have a rate above 15% of expenses • 18% of top public charities have a rate above 20% of expenses • Average rate for foundations = 26% of total expenses • Minnesota • Average Management & General Expenses = 15.5% of total expenses • 58% of top public charities have a rate above 15% of expenses • 38% of top public charities have a rate above 20% of expenses • Average rate for foundations = 17% of total expenses Baseline rate used in the for-profit sector to represent efficiency is 25% North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

28. Total Expenses by Type of Expense for Top Public Charities in ND and MN North Dakota Minnesota North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

29. Impact of Potential Changes • Reduce management and general expense and redistribute to programming or collaborative leveraging Consider: if top public charities whose management & general expenses exceed 20%: reduced their rate by 5%, the savings would be $1,549,408 reduced their rate by 10%, the savings would be $3,098,817 If foundations whose management & general expenses exceeded 26%: reduced their rate by 5%, the saving would be $151,624 reduced their rate by 10%, the saving would be $303,266 North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

30. Financial Performance of Public Charities in ND is Mixed Fiscal Performance (short-term) • 15% have expenses exceeding revenues (survivability score). • 55% have profit margins below threshold in for-profit sector. • Mission Performance • Fewer than 10% of charities dedicate less than 70% of expenses • to programming. • Many charitable nonprofit rely heavily on program payments relative • to contributions for revenues. • Sustainability Performance (long-term) • financial assessment relative to assets • Uniformly high among public charities. North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

31. Impact of Potential Changes • Skills training and capacity building can strengthen nonprofit’s financial performance What is needed? Funds to assist nonprofits in capacity building Online resources that make location irrelevant Fundraising training to expanding contribution revenue sources Collaborative forums to assist nonprofits in all aspects of their program Leadership skills training Main Goal of Capacity Building Initiative North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc

32. Nonprofit Presentation 2009 • Dr. Richard Rathge, Director • North Dakota State Data Center, Fargo, ND NDSU, IACC 424, Fargo, ND 58108-6050 • Richard.Rathge@ndsu.edu • Phone: (701) 231-8621 Fax: (701) 231-9730 • URL: www.ndsu.edu/sdc North Dakota State University, IACC Room 424, P.O. Box 6050, Dept. 8000 ,Fargo, ND 58108-6050 - Phone: (701) 231-8621 : http://www.ndsu.edu/sdc