Research Results:
Paper Abstracts

Community Variations in the Size and
Composition of the Nonprofit Sector:
The Case of Indiana

Kirsten A. Grønbjerg and Laurie Paarlberg

Paper presented at the Small Cities Conference, Muncie, IN, September 14-15. Revised and expanded version of paper presented at the 2000 ARNOVA Conference.

Abstract

Nonprofits both reflect and shape community conditions. Understanding the nature of this relationship is important if we are to fully comprehend the role nonprofits play in contemporary society and if policy makers are to make effective use of the sector to implement local responses to community needs. Using a recently developed Indiana nonprofit database that combines IRS tax-exempt registrations with two other nonprofit listings, we examine how theories of demand, supply, and social structure predict the overall density of nonprofits in local communities, here the state’s 92 counties. We find substantial county-level variations in the densities of nonprofits overall and of four different types of nonprofits: religious charities, non-religious charities, advocacy, and mutual-benefit nonprofits. Using multiple regression techniques, we are able to explain 10-55 percent of overall variation (depending on the type of nonprofit involved) in nonprofit densities. Our findings support the supply and social structure, but not demand, explanations and reveal somewhat divergent patterns for the various types of nonprofits. We note several important caveats to our findings.