1.1 Nonprofit History and Background
The year 2001 saw the enactment of the “International Year of Volunteers” campaign by the member states of the United Nations (Brock and Banting, 2001). While this initiative recognized the achievements of volunteers and nonprofit employees around the world, it also increased domestic awareness of the strong social and economic force nonprofits have in North America’s communities. The nonprofit sector has become embedded in the business world of the United States’ economy, aligning and competing with both private enterprises and government programs. The world of nonprofits has not always been such a fixture in this country. Although there has been a “charitable purpose idea” (O’Neill, 2002, 6) prevalent in our country dating as far back as the 1600’s, the last fifty years have seen the evolution of the adaptive and flexible entities that strive to serve the public’s needs.
Due to the lack of international competition in industry and manufacturing following World War II, the overall North American economy began to flourish. Families across the country noted increasing disposable incomes. Attendance at local religious activities increased, as did attendance at schools and colleges. Between 1940 and 1950, the number of Americans enrolled in at least one year of college increased 53% (www.census.gov). Education and income bred new affluence which increased the amount of money in the hands of families and corporations. The development of various foundations to “warehouse” (Gaul and Borowski, 1993, 160) the new money began to take off. The foundations, along with an unprecedented level of government spending on nonprofit industry, secured the capital needed for the future growth of the sector.
Household spending on the nonprofit sector increased throughout the 1960’s and 1970’s, as civic activism led many people to devote a great bulk of their time and energy into nonprofit organizations that challenged traditional business practices (Brock and Banting, 2001). In the mid 1960’s, the Johnson administration’s Great Society provided government funding for a variety of nonprofit enterprises, which included healthcare, endowments, education, housing development and welfare. The Tax Reform Act of 1969 (revised in 1976 and 1986) encouraged foundations to continue to support nonprofit growth (Gaul and Borowski, 1003).
Growth continued throughout the 1980’s and 1990’s as well, despite cuts in government funding. The concept of entrepreneurship in the nonprofit sector began to form in this time period as a response to government curtailments. Nonprofits, in order to fully realize the developmental potential of their local communities, began to focus their energy, skills and resources on solving local challenges caused by limited public-sector activity. Changes in the demographics of the North American population during the last decade of the twentieth century, such as an aging population and relaxed immigration policies has created the opportunity for countless nonprofit healthcare facilities, nursing homes, housing and job services.
The twenty-first century is likely to continue to see the growth and development of the nonprofit sector. Congress recently signed President Bush’s faith-based initiative, The CARE Act. This legislation is intended to aid faith-based organizations, which constitute the largest category of nonprofits, and also to provide tax incentives for a variety of entities so that the nonprofit sector can help more people in need (http://www.georgewbush.com). President George W. Bush’s actions prove to the public that our country is committed to the expansion and intensification of the nonprofit sector in the new century.