First “State of the Sector” report reveals vital Alabama nonprofit insights

In a groundbreaking initiative, the Alabama Association of Nonprofits (AAN) recently released its first “State of the Sector” Report, offering a comprehensive glimpse into the fabric of Alabama’s nonprofit sector.

The report unveils that Alabama’s nonprofits are predominantly small yet efficient entities, led by highly educated and experienced CEOs or Executive Directors. These leaders, at the helm of the state’s nonprofit endeavors, are addressing Alabama’s pressing social challenges with limited resources. Nonprofits in Alabama are instrumental in providing essential services such as affordable health clinics, educational opportunities, environmental protection, cultural experiences, and basic necessities like food and shelter.

“This report is key to the success of the nonprofit landscape as it measures the health of organizations. A healthy organization has good leadership and management, an effective board, strong financials, strategic advocacy, and exceptional attention to their mission. Healthy organizations are more effective and efficient, more resilient, more focused, and more engaged. Because Alabamians depend on nonprofit organizations, a healthy and vibrant nonprofit sector is vital to the flourishing of our state and our communities,” said Danielle Dunbar, Executive Director of Alabama Association on Nonprofits.

However, the report also sheds light on some concerning disparities. It reveals a misalignment between the demographics of nonprofit leaders and the state’s population, with an overrepresentation of white individuals in top positions. Interestingly, women dominate the roles of Executive Directors/CEOs, a trend possibly influenced by the wage gaps in both the for-profit and nonprofit sectors.

Another notable finding is the limited lobbying activities by nonprofits. Despite the restrictions on lobbying, such activities are crucial for systemic changes needed to address societal issues.

Geographic analysis, though not detailed in the report, shows Jefferson and Shelby counties as the central hubs for nonprofit organizations in Alabama.

The report serves as a reminder of the pivotal role of nonprofit organizations in Alabama and across the US. AAN, in partnership with the Public Affairs Research Council of Alabama (PARCA), conducted an extensive survey of nonprofit executives to compile this report. The survey, executed by PARCA staff experienced in the nonprofit sector, gathered data from both AAN members and other state nonprofits.

“The findings of the report reminded us that nonprofit organizations are an essential part of life in Alabama and across the US. We want to continue to be part of making sure nonprofit organizations have the support they need to support those they serve. The report shows that our AAN members are more likely to follow best practices and they have more professional leadership and governance than the average. That equates to a healthier nonprofit and a healthier community,” Dunbar said.

Founded in 1996, the Alabama Association of Nonprofits, initially known as the Nonprofit Resource Center of Alabama, has been a collaborative effort of Alabama Power Company, the United Way of Central Alabama, and the Community Foundation of Greater Birmingham. AAN stands unique in Alabama, dedicated exclusively to supporting the nonprofit sector through training, advocacy, and management support.

The nonprofit sector in Alabama is a significant economic force, generating over $10 billion annually, holding assets exceeding $20 billion, and employing 5 percent of the state’s workforce. The sector comprises 5,578 active nonprofits, which are not only economic developers but also human service providers, community builders, and advocates for change. The dedication and selflessness of Alabama’s nonprofit executives and volunteers significantly contribute to the state’s welfare, tirelessly working towards a shared vision of a better life for families across Alabama.