Location Makes a Difference for Nonprofit Support, Study Finds

Location Makes a Difference for Nonprofit Support, Study Finds

Though nonprofit organizations in the San Francisco Bay Area are better-funded and spend more per capita compared to the rest of the nation, nonprofit leaders in the area still feel stretched for resources to meet the needs of their organizations' missions, according to a new report from the Center for Social Innovation at the Stanford Graduate School of Business.

According to the report, Managing Through Challenges: A Profile of San Francisco Bay Area Nonprofits, Bay Area charities spent in excess of $41 billion in 2000, representing nearly 14 percent of the region's gross domestic product of $295 billion. By contrast, nonprofits represent just 5 percent of the Los Angeles region's economy, and 7 percent of the national economy. In addition, typical human services nonprofits in the Bay Area and Los Angeles both have budgets of about $1.3 million, yet the Bay Area nonprofits spend far more per resident living in poverty ($5,115) than do their LA counterparts ($1,327).

In addition, the study, which was conducted by the center's Stanford Project on the Evolution of Nonprofits, found that while the profile of the nonprofit sector is broadly similar across regions, some regions have sectors that are relatively better off. For instance, Bay Area nonprofits have both a higher median budget and per-capita spending than those in LA, the state, and the nation.

"We find that location matters a great deal," said Walter Powell, SPEN faculty director and co-author of the report. "Nonprofits are embedded in local infrastructures, dependent on their communities for a variety of resources, support, and professional development."

To download the complete report (69 pages, PDF), visit: http://www.gsb.stanford.edu/csi/pdf/SPEN_Stanford_
Study_on_the_%20Evolution_of_Nonprofits.pdf.

"Stanford Business School: New Study Says Location Makes a Difference for Nonprofit Support." Stanford Graduate School of Business Press Release 08/26/2005.