The Foraker Group Report on the Alaska Nonprofit Economy

Abstract

The nonprofit sector comprises those nongovernmental organizations, commonly known as 501c corporations, that are exempt from the federal corporate income tax. As such, they are a large and very diverse group, as reflected in the different categories identified in the federal tax code. Although comprising a broad array of activities, the entities in the nonprofit sector can be characterized by the following six characteristics: First, they serve some public purpose and contribute to the public good. Second, they involve some voluntary participation, typically in the form of a board of directors, but often involving voluntary labor as well. Third, they are self-governing—meaning that they have internal controls that are not governed by outsiders. Fourth, they are not dedicated to generating profits for their owners through their activities, except that excess revenues may be reinvested in the mission of the organization. Fifth, they are institutionally separate from the government. And finally, they are organizations which typically secure legal standing as corporations chartered under state laws. This allows them to enter into contracts and carry on other functions. However, it is not necessary for a nonprofit to be chartered in this way. (The informal nature of many nonprofits makes it difficult to track and measure the total importance of the sector.) This report is the first attempt to provide a comprehensive description of the nonprofit sector in Alaska. It is based upon a diverse collection of state and national data sources pieced together to create a comprehensive picture of the scope and importance of nonprofits.