The FRED Blog has discussed the growing economic footprint of the US nonprofit sector. Today, we dig deeper into this topic by answering two related questions:

How is the economic footprint of the nonprofit sector measured? Our FRED graph above shows three key economic metrics:

• Gross output (dashed green line) is the inflation-adjusted dollar value of the services provided by nonprofit institutions serving households. That value is measured as their current operating expenses because those services are not generally sold in markets with observable prices. This is similar to measuring the output of the government sector.
• Receipts from sales of goods and services (dash-dot-dash orange line) is what households pay for goods and services provided by nonprofit institutions.
• Final consumption expenditures is the difference in value between gross output and receipts from sales. In other words, the value of services provided by nonprofits to households without an explicit charge.

What fraction of household consumption does nonprofit services represent?

The solid blue line shows the value of final consumption expenditures of nonprofit institutions serving households as a percentage of total personal consumption. This measure allows us to easily compare the relative economic size of these expenditures over time.

Our FRED graph above shows that the nonprofit sector contributed an average of 2.94% to the total value of personal consumption of goods and services between 2007 and 2024. Earlier data show that this contribution rose from 0.52% in 1980 to 3.28% in 2012. Except for an outlier related to the COVID-19 pandemic in 2020, the nonprofit sector share of personal consumption slowly declined between 2012 and 2024, the latest data available at the time of this writing.

Learn more about measuring personal consumption expenditures from Chapter 5 of the National Income and Product Accounts (NIPAs) handbook from the US Bureau of Economic Analysis.

Learn how nonprofit organizations, such as foundations, contribute to community and economic development by listening to this podcast from the Federal Reserve Bank of Atlanta on FRASER.

How this graph was created: Search FRED for and select “Real personal consumption expenditures: Services: Final consumption expenditures of nonprofit institutions serving households.” Click on the “Edit Graph” button to customize the data by searching for “Real Personal Consumption Expenditures.” Don’t forget to click “Add.” Next, type the formula “(a/b)*100” and click “Apply.” To add the other two data series to the graph, select the “Add Line” tab and search for “Real personal consumption expenditures: Services: Gross output of nonprofit institutions.” Click on “Add data series.” Repeat the previous two steps to search for and add “Real personal consumption expenditures: Services: Receipts from sales of goods and services by nonprofit institutions.” Last, use the “Format” tab to customize Line 1 by selecting “Y-Axis position: Right.”

Suggested by Maria Benito Correa and Diego Mendez-Carbajo.