Social services agencies and arts group are more vulnerable to economic downturns, in part because they rely more heavily on contributions and government grants, which have fallen in recent years.
As a group, the 35 social services nonprofits we surveyed spent 98 cents on expenses for every $1 of revenue they raised, slightly less than 2011. That marks a third consecutive year where revenue exceeded expenses following the recession years of 2008-2009, when the agencies spent more than they raised in revenue.
The improvement suggests that social service nonprofits are growing accustomed to a new funding environment that may be less dependent on some forms of government support.
Arts and culture groups have struggled in recent years with declining contributions, as many cash-strapped donors gave less or diverted contributions to organizations that address basic needs such as food, clothing and shelter. Revenue for arts and culture groups fell 6.8 percent in 2012, as eight of the 12 organizations saw revenue declines.
Charitable giving in Minnesota rose 3.4 percent to $5.5 billion in 2011, the most recent year for which numbers are available. In its annual “Giving in Minnesota’’ report in October, the Minnesota Council on Foundations said giving by individuals accounted for 70 percent of the total, or $3.8 billion. Foundations and corporations granted $1.7 billion in 2011, up 14.7 percent from 2010. Employment in the nonprofit sector has shown slow-but-steady growth even through the recession and slow-recovery years, according to the Minnesota Council of Nonprofits.
In 2012, the council reported that there were 304,236 nonprofit workers — many of them in the health care sector — up about 1.6 percent over 2011. Nonprofits of all kinds accounted for about 11.5 percent of Minnesota’s workforce in 2012, the same as 2011.
“As the private sector cut jobs [during the recession], the nonprofit sector was a source of stability for the state’s economy,’’ said Pratt.
Because of state law and regulatory policies, HMOs and most hospitals in Minnesota are incorporated as nonprofits. As a result, health care nonprofits dominate the Nonprofit 100 survey, accounting for 52 of the top 100 organizations in 2012.
We looked at 57 health care organizations for this year’s survey, including large and small health care systems, senior care organizations and blood and organ donor organizations. In 2012 their combined revenue was $46.5 billion, a 6.7 percent increase over 2011. Expenses for the group rose 6.5 percent to $44.6 billion.
Sixteen of the 57 health care organizations we surveyed spent more than they generated in revenue last year.
At Blue Cross and Blue Shield of Minnesota, the largest nonprofit on our list, revenue rose 3 percent to $9.5 billion. Expenses slightly exceeded revenue at Blue Cross.
At No. 2-ranked Mayo Clinic, revenue rose 9.6 percent to $9.3 billion. The big Rochester-based health care provider spent 91 cents on expenses for each dollar of revenue. No. 3-ranked Medica saw revenue jump 6 percent to $4.6 billion.
The merger of the St. Paul and Minneapolis YMCAs puts the resulting “YMCA of the Greater Twin Cities” at No. 1 on the social services list with $118.5 million in revenue and $120.8 million in expenses for 2012.
The combination of the two organizations was long anticipated and follows a trend of regional organizations with similar missions combining to broaden their reach and reduce overhead. We have excluded the YMCA from the group comparison because of the merger.