Can philanthropy make up for cuts in government funding? That question weighs heavily on the nation as Supplemental Nutrition Assistance Program (SNAP) benefits reportedly will not be issued beginning Nov. 1 – continued funding for Women, Infants and Children (WIC), is also uncertain – and the ripple effect of lost federal funds spreads across multiple sectors.
Alabama Association of Nonprofits (AAN) and the Community Foundation of Greater Birmingham have released a report that provides a clear-eyed view of the vital importance of Alabama’s nonprofits as essential partners in public service delivery.
“Mapping the Public-Nonprofit Partnership in Alabama,” conducted by the Public Affairs Research Council of Alabama and funded by the Community Foundation, examines the size and structure of Alabama’s nonprofit sector, the extent of the state’s reliance on nonprofits for public services, where and how services are delivered, how public funding flows to nonprofits, and how Alabama compares nationally in funding, scale, and impact.
“People instinctively know the important role nonprofits play, yet there has been a lack of clarity on size, scope, and impact. This report provides a clear understanding of what the nonprofit sector provides for Alabama,” said Christopher Nanni, President and CEO of the Community Foundation. “This is essential information for nonprofit professionals, policymakers, the media, donors, and community stakeholders to have as they craft strategies, especially in uncertain times.”
Danielle Dunbar, Executive Director of Alabama Association of Nonprofits, said, “There is no doubt that nonprofits across the state fill critical gaps where government cannot and provide scalable, cost-effective solutions that strengthen communities and drive economic growth. This report provides the facts, figures, and tools for navigating a swiftly evolving nonprofit landscape.”
Among the facts revealed by the report:
- Alabama is home to 5, 996 active nonprofits, ranking the state 40th per capita nationally.
- Alabama nonprofits generate $16.9 billion in annual revenue.
- Between 2015 – 2025, Alabama nonprofits received $5.5 billion in federal awards — more than 60 % flowing through the Department of Health and Human Services
- By far, the state government is the most active contractor of nonprofits. From 2015-2025, Alabama state government entered into 2,914 agreements worth $7.7 billion with nonprofits to provide public services, including after-school and summer programs, mental health services, and more.
- The median nonprofit operates on about $200,000 a year, with two-thirds reporting less than $500,000.
- Private philanthropy cannot replace sustained public investment. Alabama’s 822 foundations, which can make grants to nonprofit organizations, hold $4.5 billion in assets — assuming a typical 5.6% payout, foundations could distribute about $226 million per year, only one-third of recent federal funding.
- In the state of Alabama, foundation assets per capita rank 49 out of 50 states.
The full report can be viewed at www.cfbham.org/research or www.alabamanonprofits.org/.
The Community Foundation of Greater Birmingham has invested more than half a billion dollars back into the community to support transformational change and its vision for a just, prosperous, and unified region where every person is empowered to reach their full potential. For more information, visit www.cfbham.org or call (205) 327-3806. MEDIA CONTACT: Amy Abeyta, aabeyta@cfbham.org or (205) 327-3806.
The Alabama Association of Nonprofits (AAN) empowers nonprofit organizations through training, advocacy, and leadership development, helping them fulfill their missions and improve the lives of Alabamians. For more information, visit www.alabamanonprofits.org or call (205) 963-7969.