In this report, we provide an overview of the financing of national social sector infrastructure providers incorporated as nonprofits by exploring their overall size, revenue structures, and financial health from 2014 to 2019, which constitutes the most recent six-year data released by the Internal Revenue Service. We also make initial observations about the gifts that MacKenzie Scott made to national social sector infrastructure providers in 2021. We hope our findings will help social sector infrastructure funders, providers, and users learn more about infrastructure financing and the steps they can take to strengthen infrastructure providers’ financial health.
Why this matters
The social sector—which consists of private organizations (nonprofit, for-profit, and hybrids of the two), groups, and individuals acting to advance social missions as their primary purpose—needs a strong infrastructure, or support system, to thrive. It is important that social sector infrastructure providers are financially secure so they can invest in their growth, pursue new opportunities, make their services affordable and accessible, and withstand financial downturns.
Key takeaways
Overall, the national infrastructure providers in our sample are surviving but not thriving financially, and in interviews we heard that many individual providers feel financially insecure. The financial health of infrastructure providers in our sample, especially nonprofit-serving providers and small providers, would benefit from larger operating margins and more months of spending on hand.
There are steps infrastructure providers, funders, and users can take to increase operating margins and months of spending on hand. For example, infrastructure providers can try to increase earned revenue. They can also pursue grants that cover the full costs of services, make services more affordable for infrastructure users, and allow flexibility to respond to the needs of the social sector. Infrastructure funders can provide these grants along with multiyear, general operating support and help providers establish other sources of ongoing and steady support, such as endowment income. And infrastructure users can support the infrastructure providers they value by paying dues and fees for services.
Further reading
For our definitions of the social sector and its infrastructure and to learn how we developed these definitions, please read our report, The Social Sector Infrastructure: Defining and Understanding the Concept.
To read our definitions, please see our social sector infrastructure infographic.
To explore our definitions further and see examples of infrastructure providers and activities, please visit our feature, Exploring the Social Sector Infrastructure.
To learn about the state of the national social sector infrastructure and what it needs for the future, please read our report, The State and Future of the National Social Sector infrastructure.
For further guidance on steps to take to strengthen the infrastructure, please read A Guide to Strengthening the National Social Sector Infrastructure.
This publication is part of a larger project on the social sector infrastructure.