Research Results:
Indiana Nonprofit Survey

INDIANA NONPROFITS:
A PORTRAIT OF RELIGIOUS NONPROFITS AND SECULAR CHARITIES

Survey Report #7

Indiana University
School of Public and Environmental Affairs
Center on Philanthropy

Click here to read the press release for this study. Click here to access the full report Note: this is a relatively large file (580 kb). You may wish to access separate sections of the report independently through links in the major sections below. Note, you will need a free copy of the Acrobat program to read any of these documents.

For information about the survey on which this report is based, please see Indiana Nonprofit Survey.

Top | Introduction | Exec Summary | Key Findings | Acknowledgements

INTRODUCTION

Click here to access the full introductory section of the report.

Religious and charitable nonprofits have received much attention from researchers and policymakers in recent years due to the “Charitable Choice” provision of the 1996 welfare reform act (later expanded upon through President Bush’s Faith-Based Initiative), which has sought to promote increased access to government funds by congregations and other faith-based nonprofits. Unfortunately, much of the policy debate about “Charitable Choice” fails to distinguish among major types of faith-based organizations. In this report we attempt to remedy that by distinguishing religious congregations from other faith-based organizations.

We examine the landscape of religious and charitable nonprofits in Indiana and focus primarily on differences among three organizational types -- congregations, other faith-based organizations, and secular charities. We also consider whether there are notable differences among congregational types based on differing theological traditions. In Chapter 1 we describe how we categorized the Indiana religious and charitable sector along these dimensions. We follow in Chapter 2 with an assess-ment of the basic organizational characteristics of each type. Chapter 3 further distinguishes religious and charitable nonprofits into those that currently provide human services and those that do not. In Chapter 4, we present an assessment of the organizational capacities and challenges faced by religious and charitable nonprofits to determine whether congregations currently have the same capacity to provide human services as other service providers. Finally, in Chapter 5 we look at geographical differences in the religious and charitable sector across the state of Indiana. Chapter 6 provides an overview of our key findings.

This statewide report is the seventh in a series based on a major survey of 2,206 Indiana charities, congregations, advocacy, and mutual benefit nonprofits completed in 2002 as part of the Indiana Nonprofits: Scope and Community Dimensions project. No other study has examined such a variety of nonprofits or done so in such detail. The survey had a response rate of 29 percent. Details of how the sample was developed and the data collected are described in technical reports available upon request.

Top | Introduction | Exec Summary | Key Findings | Acknowledgements

EXECUTIVE SUMMMARY

1. Defining Indiana’s Religious and Charitable Nonprofits Sector: We focus on Indiana’s religious and charitable nonprofits and exclude other secular nonprofits. We classify the former into three groups: congregations, other faith-based organizations (FBOs), and secular charities. Click here to access Chapter 1 of the report which details these findings.

• Some 55 percent of Indiana nonprofits are part of the religious and charitable sector. Of these, 42 percent are secular charities, 39 percent are congregations, and the remaining 19 percent are other faith-based organizations.
• For congregations we distinguish among major denominational traditions. The majority (60 percent) of Indiana congregations are evangelical Protestant. Almost one-third (31 percent) are mainline Protestant, 7 percent are Catholic, and the remaining 2 percent have some other religious affiliation.

Top | Introduction | Exec Summary | Key Findings | Acknowledgements

2. Portrait of Religious and Charitable Nonprofits: We describe the basic characteristics of Indiana’s religious and charitable nonprofits, including revenues, human resources, and age. Click here to access Chapter 2 of the report which details these findings.

• The median revenue for religious and charitable nonprofits in Indiana is $98,000 with no significant variation among congregations, other FBOs or secular charities. However, Catholic congregations are notably larger than congregations belonging to other denominations.
• The majority (53 percent) of religious and charitable nonprofits say their revenues increased over the last three years.
• In terms of annual surpluses or deficits, more than one-half (54 percent) of religious and charitable nonprofits report gains, one-third (33 percent) report losses, and the rest (14 percent) broke even.
• Donations are the primary source of revenue for the majority (53 percent) of religious and charitable nonprofits in Indiana, but especially for congregations.
• Over the last three years, donations and gifts increased for nearly one-half (49 percent) of Indiana’s religious and charitable nonprofits, stayed the same for slightly more than one-third (36 percent), and decreased for 15 percent.
• One-third (32 percent) of religious and charitable nonprofits do not have any full-time equivalent (FTE) staff. The median staff size is 1.5 FTEs for religious and charitable nonprofits.
• Volunteers are important to three-quarters of Indiana’s religious and charitable nonprofits, most notably to congregations.
• The median age of religious and charitable nonprofits in Indiana is 37 years. Congregations are significantly older than both other FBOs and secular charities, with mainline Protestant congregations notably older than other types of congregations.

Top | Introduction | Exec Summary | Key Findings | Acknowledgements

3. Provision of Health or Human Services: We assess the current provision of health or human services including service orientation and targets. We also examine receipt of public funds and likelihood to seek them in the future. Click here to access Chapter 3 of the report which details these findings.

• Just under half (48 percent) of religious and charitable nonprofits provide health or human services with congregations and other FBOs more likely to provide them than secular charities.
• Secular charities have a more outward service orientation and are more likely to target services to low income groups. Congregations tend to have more service targets, indicating they have a broader range of programs.
• Relatively few religious and charitable nonprofits receive government grants (14 percent) or contracts (12 percent). Secular charities and other FBOs are more likely to have them than congregations.
• Among religious nonprofits, other FBOs that provide health or human services are more likely than congregations to be aware of “Charitable Choice” initiatives, more likely to already receive government funds and are more likely to say they might seek such funds in the future.

Top | Introduction | Exec Summary | Key Findings | Acknowledgements

4. Challenges and Capacities: We examine challenges faced by religious and charitable nonprofits and capacities available to meet those challenges, looking for differences among those that provide health or human services and those that do not. Click here to access Chapter 4 of the report which details these findings.

• The majority of Indiana’s religious and charitable organizations (75 percent) report challenges in tasks related to program management.
• Attracting clients/members is most commonly reported as a major challenge (54 percent). Congregations are particularly likely to find it challenging, regardless of whether or not they provide health or human services.
• Organizations that provide health or human services are more likely to report challenges in evaluating programs than those that do not. Secular charities that provide health or human services are disproportionately more likely to have completed a recent program evaluation (51 percent vs. 32 percent overall).
• Religious and charitable nonprofits report similar levels of governance challenges; however, congregations that provide health or human services are the most likely to report challenges with strategic planning.
• Secular charities that provide health or human services are more likely to report challenges in obtaining funding, with well over two-thirds (70 percent) naming it as a major challenge, compared to 48 percent overall.
• Religious and charitable nonprofits report relatively few human resource management challenges related to staff recruitment and training with only slight variation among types.
• Religious and charitable nonprofits commonly report recruiting and keeping volunteers other than board members as challenging (70 percent). This is particularly the case for congregations, especially those that provide health or human services (85 percent).
• Nonprofits that provide health or human services are more likely than those that do not to possess tools to help in human resource management such as written job descriptions and personnel policies as well as formal volunteer recruitment and training programs.
• Information technology (IT) is only a major challenge for 18 percent of religious and charitable nonprofits. Those that provide health or human services are more likely to name it a challenge than those that do not.
• Congregations that provide health or human services are more likely to have computers available for key staff/volunteers as well as computerized financial records than their counterparts.
• While slightly more than one-half (57 percent) of religious and charitable nonprofits view financial management and accounting as a challenge, only 13 percent identify it as a major challenge.
•  Congregations report greater challenges in managing facilities, but they are also more likely to possess reserves dedicated to capital improvement (64 percent) as well as maintenance and/or equipment (73 percent) than other FBOs or secular charities.

Top | Introduction | Exec Summary | Key Findings | Acknowledgements

5. Regional Variations: We reexamined the above dimensions and looked for notable variations among seven regions where we had been able to use expanded samples and had enough survey respondents among the religious nonprofits and secular charities to warrant separate analyses. We found that our seven regions—the four metropolitan regions of Indianapolis, Northwest Indiana, Evansville, and South Bend, in addition to Other Metro, Non-Metro, and Rest of State regions—differed only in a few cases.Click here to access Chapter 5 of the report which details these findings.

• While the amount of revenues or changes in revenues is similar regardless of geographical location, there were some regional differences in how much revenue religious and charitable nonprofits generated from donations.
• Religious and charitable nonprofits show some notable regional variability in the challenges they face. For instance, Indianapolis nonprofits report more challenges in evaluating program outcomes and using IT effectively while South Bend nonprofits report fewer challenges in financial management than their counterparts located elsewhere.
• Religious and charitable nonprofits also vary in their capacities to face those challenges depending on location.
• South Bend and Indianapolis charitable and religious nonprofits are relatively more likely to have their own websites and e-mail addresses.
• Religious and charitable nonprofits in the Other Metro areas are much less likely to have reserves dedicated to maintenance.
• South Bend charitable and religious nonprofits are less likely to have written job descriptions or an annual report, but are more likely to have formal volunteer recruitment programs.

Top | Introduction | Exec Summary | Key Findings | Acknowledgements

KEY FINDINGS

Seven key findings stand out from our analysis of Indiana's religious and charitable nonprofits. Click here to access our Chapter 6 of the report which details these observations.

1. Religious congregations are distinct from other faith-based organizations. Our findings show that religious congregations and other FBOs show distinctive characteristics, challenges and capacities on almost every dimension examined here. Policy-makers must be aware of these differences when designing initiatives meant to address religious organizations.

2. Congregations, other FBOs and secular charities differ markedly in their approach to health or human services. Over half of all congregations and other FBOs provide some type of health or human services compared to less than four-fifths of secular charities. Among those that provide such services, secular charities and other FBOs are more likely than congregations to serve only the general public (rather than their own members) and to target their services to low income groups. However, secular charities are more likely than congregations or other FBOs to receive government contracts and to have completed a recent evaluation of program outcomes or impacts.

3. Limited awareness of and interest in “Charitable Choice” by congregations. Among religious nonprofits, only a third of congregations are aware of the “Charitable Choice” initiative, regardless of whether they provide health or human services, compared to about two thirds of other FBOs that provide such services. The latter are also more likely to already receive government funds and to say they might seek such funds in the future.

4. Congregations are more likely to depend on volunteers. While congregations report more challenges in recruiting and keeping volunteers, they are also more likely to say volunteers are essential to their missions than other faith-based organizations and secular charities. Congregations that provide health or human services are considerably more likely to have formal volunteer recruitment and training programs, suggesting that they also have greater capacity to utilize them than their counterparts.

5. Organizations use information technology in different ways. Detailed analysis shows that congregations that provide health or human services are especially likely to possess computers and have computerized financial records. However, we also find that other FBOs that provide such services are especially likely to have Internet access and an organizational email address. This suggests that congregations are more likely to use IT for internal management tasks while other FBOs use it for interfacing with external audiences.

6. Congregations have greater capacity to manage facilities. Detailed analysis shows that congregations which provide health or human services are significantly more likely to report reserves dedicated to capital improvement as well as reserves for maintenance and/or equipment. This is an important indicator of financial planning capability. However, congregations, regardless of whether they provide health or human services, are nevertheless more likely to say that managing facilities is a challenge than other FBOs or secular charities.

7. Catholic congregations appear to be more formalized. There were only a few cases in which congregational types differed significantly in management capacities. However, in each of those cases, Catholic congregations appeared to come out ahead, most likely because they also tend to be significantly larger than other types of congregations.

Top | Introduction | Exec Summary | Key Findings | Acknowledgements

APPENDICES

Our report includes several appendices with supplementary information. Click here to access the full set of appendix tables. They include:

• Appendix A: Selected Survey Questions.
• Appendix B: Breakdown of Religious Affiliations.
• List of project publications and reports.
  

ACKNOWLEDGEMENTS

We express our deep-felt gratitude to the many Indiana nonprofits that completed our survey. Without their cooperation, we would have nothing to report. We also thank the project Advisory Board (also listed on page 2 of the report), the field associates and many research assistants who have work on the project, as well as Ram Cnaan, Bill Enright, John McCarthy, Larry Smith, Brian Steensland, and David Wright for very helpful comments on earlier drafts.

This report was prepared as part of an ongoing project on the Indiana Nonprofit Sector: Scope and Community Dimensions made possible by a grant from the Aspen Institute's Nonprofit Sector Research Fund and by support for the Efroymson Chair in Philanthropy by the Indianapolis Foundation at the Central Indiana Community Foundation and the Indiana University Center on Philanthropy's Indiana Research Fund, supported in part by Lilly Endowment Inc. Additional funding and in-kind support has been provided by Ball Brothers Foundation, Indiana University Foundation; the Chancellor's Office at Indiana University Bloomington; The Center for Urban Policy and the Environment at I.U.P.U.I.; WBH Evansville, Inc.; the School of Public and Environmental Affairs at Indiana University on the Bloomington, Indianapolis, South Bend, Northwest, and Fort Wayne campuses; Ball State University; and the University of Southern Indiana.

Top | Introduction | Exec Summary | Key Findings | Acknowledgements

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