The nonprofit organizations in this study vary on a number of characteristics, including size and organizational age. About six in ten organizations (61%) are considered small (11-49 employees) or micro (10 or fewer employees) (Figure 8).
The National Taxonomy of Exempt Entities (NTEE) system is used by the IRS to classify nonprofit organizations and is a way to look at the types of organizations in this study. The most common types of organizations were (Figure 10): Human Services (22%), Community improvement and capacity building (17%), and Education (12%)
One difference between AA-led and white-led organizations is the availability of cash reserves. AA-led organizations are less likely to have cash reserves on hand: 32 percent have four or more months of cash reserves compared to 57 percent of white-led organizations (Figure 13).
* Cash reserves, or “rainy day funds,” are an important indicator of an organization’s long-term financial health. Such savings can be used to take risks, underwrite growth, or invest in organizational capacity beyond the use of existing funding streams. A lack of cash reserves may restrict a leader’s capacity for innovation as the organizational priority is to simply keep the lights on and meet payroll.
The sources of an organization’s funding also differ slightly between AA-led and white-led organizations. While government grants are the largest source of funding for both, they are a larger percentage for AA-led organizations (35% of funding from government grants, on average, versus 22% for white- led organizations). In fact, at over a third of AA-led organizations (35%) at least half of their current funding is from government grants; this is true at 21 percent at white-led organizations. White-led organizations reported more funding from national foundations than AA-led organizations, though it was a small amount (3.5%, on average at white-led organizations versus 1% at AA- led organizations) (Figure 14).