The nonprofit sector is the second largest industry in America. Charities take responsibility for significant social change, disaster relief, and support of the less fortunate. But what would the world look like without these organizations? How much effect do they really have in our communities and on our lives? THuS Marketing met with Bennett Weiner, the Executive Vice President and COO of the BBB Wise Giving Alliance (BBB WGA), to ask these questions and to discuss his expertise on charitable giving.
BBB WGA is a charity-monitoring organization that verifies the trustworthiness of organizations by evaluating them in relation to a set of 20 BBB charity standards. These standards cover a variety of areas such as charity governance, results reporting, finances, transparency, and the accuracy of appeals, among other things. Bennett has been serving, impacting, and dedicating his life work to the charity space, “let’s just say for several decades,” he shared keenly. Being so engrossed in the work of charities, we recognized that Bennett’s words carry the kind of weight that helps us all open our eyes to why charities matter.
Bennet, how would you define the charity sector?
I would define it as a very diverse set of organizations with various goals and causes seeking to help individuals and our society. A more technical definition of a charity is those organizations that are tax exempt, that have received charitable tax-exempt status under section 501(c)(3) of the Internal Revenue Code, and that's the section of the code that defines charities in terms of organizations that are eligible to receive contributions that are deductible as charitable gifts.
You could be tax-exempt as a lobbying organization, as a political party, as a union, as a benevolent organization, or as a fraternal organization. A charitable organization is just one of over 20 different categories.
Those organizations are about 1.9 in volume, and charities are about 1.4 million of that. They really make up the bulk of it. However, keep in mind that the majority of charities are small in size. So when looking at that large number, people should remember that the vast majority of them are very small.
So, what makes the nonprofit sector unique and the charitable sector specifically?
I think one of the key elements is the people that run and work at these organizations. They are devoted to the cause that they have joined, and they make up 10% of the workforce. One out of 10 people that work in the United States work for a not-for-profit. It's hard to believe. That's larger than many industries.
I believe what motivates people is not the money but the mission. They want to make a difference in this world, and they do it by joining a cause they believe in. And that's not just including those who are paid staff. In addition to the one in 10 people who work for nonprofits, there are also people who volunteer and are unpaid. That type of combination of people working and trying to do well is what makes it unique.
Then the charitable sector itself is engaged in so many issues, including current events. Every time there's a tragedy or a disaster or some special need in the headlines, you can bet that charities are going to be involved in helping to address that particular issue and not just in a little while—as soon as possible.
Earlier I talked about the volume of organizations that exist in America: 1.4 million. That's larger than any other country. Also, the volume that's given by Americans is the largest amount of any country. I mean, $484 billion was contributed to charities in 2021. It's an amazingly large number.
The amount given annually to charity is more than the cost of sending a man to the moon. The Apollo Project, if you took all the dollars from the first rocket to the landing, that's how much we give in a year to charity. That's really saying something about the size of it. It's as big as a yearly moon landing.
When we think about International Day of Charity and the fact that this is a day set aside to really create an awareness of the impact and influence of the charity sector, what message do you believe we need to hear? What really is important to come across on a day designated for spotlighting charities?
I think the message is that we can all do something. It doesn't mean you have to make a donation. It could mean that you volunteer. It could mean that you do something to help further a cause, but we can all do something no matter where we are in our station of life, financially and otherwise.
The UN has come out with a series of about 17 sustainable development goals. They're big-picture issues like vaccinations, education, climate change, and other rather large topics. It's another way of looking at the most important challenges the world is facing in the charitable arena. That's another thing people may want to check out and look at in terms of what their approach to charity is.
What would a world without a charitable sector look like?
Before there really was a charitable sector at all, that role ended up being taken up by the churches and houses of worship in communities. They became the charitable force to do as best they could on some of the needs.
So I think something else would serve in that way, but I've seen that legacy of the house of worship trying to come to the plate, and it's really too large a need for any one entity to take on fully on its own. That's why charities exist in the U.S. and other countries. It's become a necessity.
Bennett, what about you? Why do you love charities?
Well, I can say that the one thing that has made this job interesting to me personally, is it changes over time because the types of challenges that we're seeking to address in the charitable sector change with technology and as new issues come up. So the whole monitoring field of charities is more challenging, but that also makes it more interesting and needed.
The other thing is I think we see a difference in the behavior of the charities that we evaluate. Over time we see a larger number of them that share information with us are able to demonstrate that they meet our standards, and so we are making a difference in terms of behaviors in the charitable sector. These organizations are improving. I've seen that.
You can actually see that you're making a difference every day in the evaluations and reports that we produce. They are helping donors in real-time. Not every job provides that type of recognition that you're accomplishing something. That makes it also rewarding on a continuing basis.
What a rewarding life’s purpose! We thank Bennett for sharing his insights and passion for charities with THuS. Let’s not overlook the brilliance he shared about a world without charities. There is no such world. The human side entails an inability to stand by and watch suffering. We’re built to do something about it.
At times it can appear as if nothing is being done, but with a closer look, we’ll find $484 billion given to American charities in 2021, and 10% of the labor force dedicated their careers to a mission. The only question left to ask is this: “Where will you join in the trend of serving and giving?”