President of Rhode Island’s largest homeless shelter says the state has one of the highest numbers of nonprofits per capita in the U.S.

Times are tough for nonprofits. Financing from state and federal sources is down and people generally have less to give than before the recession.

Anne Nolan, president of Crossroads Rhode Island, which operates the state’s largest homeless shelter, knows this first hand. On a recent episode of WJAR's "10 News Conference," she said that while more people are in need, there’s less money out there to help them.

That’s undoubtedly true across the country, but, said Nolan, the problem in Rhode Island is exacerbated.

"We have one of the highest percentages per capita of nonprofits in this state of any state in the union," she said on the show that aired Nov. 27.  "There is a limited amount of funding, a limited number of donors out there, and that waters it all down."

The Providence Journal reported Dec. 18 that donations to Crossroads were down in recent months in part because of its support of EngageRI, a business-backed group that pushed for an overhaul of the state retirement system.

But we were also interested in Nolan's claim that because the state has such a high concentration of nonprofits, there’s greater competition here for financing than in other states.

When we asked Nolan where she got her information, she said she thought it came from a study on Rhode Island’s nonprofit sector done either by the United Way of Rhode Island or the Rhode Island Foundation.

The Rhode Island Foundation did publish a study in August on the state’s many nonprofits. According to the report, the number of active nonprofits registered with the secretary of state’s office in 2011 is 7,306. That sounds like a lot. But the list isn’t made up only of charities, foundations or social services groups.

It also includes condominium associations, sports teams, religious groups and professional associations. Most are small. Two-thirds operate with budgets and assets of less than $100,000.

The report also said that nonprofits employ more than 18 percent of Rhode Island’s labor force, tying us with New York as the states with the highest percentage of people working at nonprofits. That seems logical considering the high number of colleges and universities in Rhode Island and the large hospitals located here.

But the report doesn’t make any comparisons among states based on the number of nonprofits per capita.

The United Way published the results of a survey of Rhode Island nonprofit health and human service providers in March 2009. The survey focused on fiscal issues and how organizations’ finances were being affected by the recession. Sixty percent of the 230 respondents reported a decrease in total income over the prior year.

The survey sheds some light on the struggles of nonprofits, but it doesn’t take up the per capita question either.

We didn’t give up. We knew there must be some organization that keeps track of this sort of thing.

That organization, it turns out, is the Urban Institute, a nonpartisan Washington, D.C.-based public policy think tank that was established in 1968 by the administration of President Lyndon B. Johnson. It keeps track of a range of statistics on nonprofits through its National Center for Charitable Statistics.

A search of the institute’s website found a table titled "Number of Registered Nonprofit Organizations by State, 2008" -- the most recent year for data -- which was based on 990 Form filings with the Internal Revenue Service. According to the table, Rhode Island had 7,200 registered nonprofits in 2008, of which 4,959 were 501(c)(3) organizations, which include charities, foundations, hospitals, universities and social services groups such as Crossroads.

Using an estimated 2008 population for Rhode Island of 1,050,788, the chart calculated a figure of 68.5 nonprofits per 10,000 people and 47.2 501(c)(3) groups per 10,000 people. That ranked Rhode Island 11th in the nation for nonprofits per capita and 8th for 501(c)(3) groups.

Not surprisingly, Washington, D.C., ranked first with 250.3 nonprofits per 10,000 people and 158 501(c)(3) groups. But that number is skewed because many of the groups registered in the nation’s capital have a national or international focus.

Most of the other states in the top 10 are geographically large with small populations, such as Montana (second in both categories), North Dakota (fifth in both categories) and South Dakota (sixth in the former category and seventh in the latter).

The national average was 49.8 nonprofits per 10,000 people and 35.3 501(c)(3) groups.

The Urban Institute also has interesting figures on charitable contributions that relate to Nolan’s larger point about an increasingly tough funding environment. Based on IRS data on tax returns, the average charitable contribution made by a Rhode Island individual dropped from $926 in 2004 to $787 in 2009.

That brought Rhode Island’s ranking for the size of an individual’s charitable contribution down from 37th in the nation to 45th. In comparison, the average contribution in Massachusetts was $1,143 in 2009, which ranked 19th, and in Connecticut, it was $1,517, which ranked 4th.

Our ruling

Nolan’s point that Rhode Island nonprofits are having a more difficult time raising money is valid. People just aren’t giving as much these days.

Whether Rhode Island has one of the highest per capita numbers of nonprofits is open to interpretation. The state isn’t among the top five in the country. It’s just outside the top 10.

But the state does have the eighth-highest number of 501(c)(3) organizations per capita. These are the groups, like Crossroads, that provide health and social services and are the type that people probably think of when it comes to nonprofits.

For that reason, we believe Nolan has a point, but her statement needed further explanation. We rule the claim Mostly True.

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