Which Nonprofit Sectors Are Growing Fastest?

The U.S. nonprofit sector is not static. With 1,930,252 organizations, $4.09 trillion in revenue, and $10.5 trillion in assets, the sector is constantly evolving. Some categories are growing rapidly, others are stable, and a few face significant headwinds. Understanding these trends helps donors, policymakers, and nonprofit leaders make better decisions about where to invest time, money, and attention.

Category-by-Category Growth Rates

Not all nonprofit categories grow at the same pace. Here's a detailed look at growth patterns across the major NTEE categories, based on revenue trends over the past decade:

High Growth Categories (Revenue growth exceeding 6% annually)

• Health (NTEE E): $1.81T revenue — growing at approximately 7-8% annually, driven by hospital consolidation, rising healthcare costs, and expanding insurance coverage. Health has increased its share of total nonprofit revenue from ~38% a decade ago to 44% today
• Science & Technology (NTEE U): $41.8B revenue — growing at approximately 8-10% annually, driven by government research contracts, tech industry nonprofit labs, and AI research organizations
• Philanthropy & Grantmaking (NTEE T): $136.7B revenue, $1.48T assets — asset growth of 10-12% annually, driven primarily by the explosive growth of donor-advised funds
• Food, Agriculture & Nutrition (NTEE K): $25.0B revenue — grew 40%+ during the pandemic and has maintained elevated levels, with food banks reporting sustained high demand

Moderate Growth Categories (3-6% annual revenue growth)

• Education (NTEE B): $517.7B revenue — steady growth driven by university research and endowment returns, but facing headwinds from enrollment declines
• Human Services (NTEE P): $198.8B revenue — consistent growth driven by government contracts and expanding social needs
• International Affairs (NTEE Q): $51.3B revenue — growth driven by global humanitarian crises and expanding development programs
• Environment (NTEE C): $23.0B revenue — accelerating growth driven by climate philanthropy and government funding. Organization count growing faster than any other category
• Housing & Shelter (NTEE L): $39.9B revenue — strong growth driven by the housing affordability crisis

Slow Growth or Stagnant Categories (0-3% annually)

• Arts, Culture & Humanities (NTEE A): $54.8B revenue — slow growth overall, with performing arts struggling and museums facing attendance challenges, though digital arts and media nonprofits are growing
• Recreation & Sports (NTEE N): $31.9B revenue — steady but unspectacular growth
• Religion (NTEE X): $28.9B reported revenue — flat to declining in reported data, reflecting mainline denomination shrinkage (though non-denominational growth partially offsets)

Declining Categories

• Youth Development (NTEE O): $14.3B revenue — facing demographic pressures and institutional challenges. The Boy Scouts of America filed for bankruptcy in 2020 (though it has since emerged). Girls Inc., 4-H, and other traditional youth organizations face competition from school-based programs and digital entertainment
• Mutual & Membership Benefit (NTEE Y): $64.4B revenue — declining membership in fraternal organizations and labor unions, though insurance-related revenue masks the organizational decline

Healthcare: The Unstoppable Giant

The Health category (NTEE E) continues to grow faster than almost any other sector, and its dominance is increasing. The numbers are extraordinary:

• $1.81 trillion in revenue from 45,164 organizations — 44% of all nonprofit revenue
• The top health system, Kaiser, generates $82.5 billion alone
• Healthcare nonprofit revenue has roughly doubled in the past 15 years
• The category's share of total nonprofit revenue continues to grow by approximately 0.5 percentage points per year

Growth drivers:

• Aging population: 10,000 Americans turn 65 every day, driving demand for healthcare services
• Price increases: Healthcare prices have consistently outpaced inflation, inflating nonprofit hospital revenue
• Consolidation: Hospital mergers create larger systems with more revenue concentration. The number of independent community hospitals is declining steadily
• Insurance expansion: Medicaid expansion under the ACA increased the number of insured patients at nonprofit hospitals
• Technology: New treatments, procedures, and medical devices drive revenue growth
• Health plan growth: Nonprofit health plans like Healthfirst ($12.2B) and SelectHealth ($5.1B) are expanding

Tech Nonprofit Emergence

The Science & Technology category (NTEE U) is one of the most fascinating growth stories in the sector. With just 6,609 organizations, it generates $41.8 billion in revenue — an average of $6.3 million per organization, one of the highest averages in the sector.

But the numbers only tell part of the story. A new wave of technology-focused nonprofits is reshaping the sector:

AI and Machine Learning Nonprofits

• OpenAI was founded as a nonprofit in 2015 (though it has since created a for-profit subsidiary, the nonprofit origin is significant)
• Allen Institute for AI (AI2) — founded by Paul Allen, focused on AI research for the common good
• Partnership on AI — multi-stakeholder organization addressing AI's impact on society
• MIRI (Machine Intelligence Research Institute) — focused on AI safety research
• Dozens of smaller AI ethics, safety, and governance organizations have been founded since 2020

Open Source Foundations

• Linux Foundation: Manages the Linux kernel and hundreds of open-source projects, with annual revenue exceeding $250 million
• Apache Software Foundation: Oversees 350+ open-source projects including Apache HTTP Server, Kafka, and Spark
• Mozilla Foundation: Operates the Firefox browser and advocates for internet health
• Wikimedia Foundation: Operates Wikipedia and related projects, with ~$180M in annual revenue
• Internet Archive: Preserves the digital record of human knowledge

Digital Public Infrastructure

• Code for America: Technology solutions for government services
• US Digital Response: Volunteer technologists supporting government agencies
• Signal Foundation: Operates the Signal encrypted messaging app as a nonprofit
• Growing ecosystem of civic technology, digital rights, and internet freedom organizations

As government research funding increasingly flows through nonprofit intermediaries, and as tech companies create nonprofit research labs, this category is poised for continued expansion. The growth of AI research, climate technology, and space exploration through nonprofit vehicles could make Science & Technology one of the most dynamic categories by 2030.

Environmental Sector Growth

The Environment category (NTEE C) is experiencing an acceleration driven by climate change urgency:

• 28,453 organizations with $23.0 billion in revenue
• Organization count growing at 5-7% annually — the fastest rate of new formation in the sector
• Revenue growth of 8-10% annually in recent years, accelerated by climate philanthropy
• The Inflation Reduction Act (2022) has created new opportunities for environmental nonprofits involved in clean energy deployment, environmental justice, and conservation

Key growth areas within environment:

• Climate advocacy and policy: Organizations focused on emissions reduction, climate legislation, and corporate accountability
• Conservation finance: Land trusts and conservation organizations acquiring and protecting land at accelerating rates
• Environmental justice: Organizations addressing the disproportionate environmental burden on low-income communities and communities of color
• Clean energy transition: Nonprofits supporting solar, wind, and battery deployment in underserved communities
• Climate adaptation: Organizations helping communities prepare for the impacts of climate change already underway

Major foundations have significantly increased climate giving. The Bezos Earth Fund ($10B commitment), Bloomberg Philanthropies (billions for climate initiatives), and the Hewlett Foundation's climate program have poured billions into the environmental sector. The Inflation Reduction Act's $369 billion in clean energy investments has created a new class of nonprofit intermediaries helping deploy federal funds.

Decline in Arts Funding

The Arts, Culture & Humanities category (NTEE A) tells a more complicated story. With 116,006 organizations and $54.8 billion in revenue, it's a large category — but growth has stagnated and some subsectors are in decline:

• Performing arts: Theaters, orchestras, and opera companies have faced declining audiences for decades, accelerated by the pandemic. Many mid-sized performing arts organizations have closed or merged
• Museums: Large museums (Met, MoMA, Smithsonian) are stable, but small and mid-sized museums face attendance challenges and aging facilities
• Public media: NPR and PBS member stations face competition from podcasts, streaming services, and digital media. Federal funding remains politically contested
• Arts education: K-12 arts education has been cut in many school districts, reducing the pipeline of future arts participants and donors

However, some arts subsectors are growing:

• Digital arts and media: Film festivals, digital storytelling, and online arts platforms
• Community arts: Organizations focused on arts as a tool for social change, healing, and community building
• Cultural heritage: Organizations preserving diverse cultural traditions, driven by immigrant communities

Pandemic Effects on Different Sectors

The COVID-19 pandemic created dramatically different outcomes across nonprofit categories:

Categories That Grew During the Pandemic

• Food & Nutrition (NTEE K): Revenue surged 40%+ as food insecurity spiked. Feeding America processed over $5 billion. Growth has been sustained
• Health (NTEE E): After an initial dip from cancelled elective procedures, hospital revenue surged with COVID treatment, testing, and vaccination. Federal relief funding added billions
• Mental Health & Crisis (NTEE F): Demand for mental health services exploded and has remained elevated. Telehealth adoption accelerated growth
• Philanthropy (NTEE T): DAF contributions spiked as donors responded to the crisis. Foundation assets grew with market recovery

Categories That Contracted

• Arts, Culture & Humanities (NTEE A): Performing arts venues closed for 12-18 months. Many never reopened. Revenue dropped 30-50% for many organizations
• Recreation & Sports (NTEE N): Youth sports leagues, recreation centers, and fitness nonprofits lost revenue from cancelled seasons and closed facilities
• International Affairs (NTEE Q): Travel restrictions disrupted operations, though demand for international relief increased
• Youth Development (NTEE O): In-person programming halted. Membership organizations lost members who never returned

Categories With Mixed Effects

• Education (NTEE B): Universities lost housing and dining revenue but gained from increased research funding. K-12 organizations struggled with remote learning but received federal relief
• Human Services (NTEE P): Demand surged while service delivery capacity dropped. Government contracts increased but couldn't keep pace with need
• Housing & Shelter (NTEE L): Eviction moratoriums temporarily reduced immediate need, but the post-moratorium wave created enormous pressure

AI and Automation in Nonprofits

Artificial intelligence is beginning to transform how nonprofits operate, creating both opportunities and risks:

Current Applications

• Fundraising optimization: AI-powered donor scoring, personalized appeals, and optimal ask amounts. Large nonprofits report 15-30% increases in fundraising efficiency
• Program delivery: Chatbots for crisis support (Crisis Text Line), AI-assisted diagnosis (health nonprofits), and personalized learning platforms (education)
• Operations: Automated grant reporting, financial analysis, and compliance monitoring
• Communications: AI-generated content, social media optimization, and donor communications
• Data analysis: Predictive analytics for program outcomes, risk assessment, and resource allocation

Emerging AI Nonprofit Organizations

• AI safety organizations: Growing rapidly, funded by tech philanthropy. Focused on ensuring AI development benefits humanity
• AI for social good: Organizations applying AI to poverty, health, education, and environmental challenges
• AI governance: Nonprofits working on policy frameworks for responsible AI development and deployment
• AI literacy: Organizations teaching communities about AI's impact and preparing workers for AI-driven disruption

Risks and Concerns

• Job displacement: Administrative roles at nonprofits may be automated, affecting a sector that employs 12+ million Americans
• Equity: Large organizations with resources to invest in AI will gain advantages over smaller organizations, potentially widening the already-enormous gap
• Bias: AI systems trained on biased data could perpetuate or amplify discrimination in service delivery
• Privacy: Nonprofits handling sensitive data (health, immigration, domestic violence) face heightened risks from AI data processing

Demographic Shifts in Giving

The donor base that fuels the nonprofit sector is undergoing a generational transformation:

The Declining Donor Base

• The percentage of American households that give to charity has been declining for two decades — from approximately 67% in 2000 to under 50% today
• Total giving has continued to grow because larger gifts from fewer donors have more than offset the loss of small donors
• This concentration of giving mirrors wealth concentration — an increasing share of charitable dollars comes from high-net-worth individuals

Baby Boomers: The Current Powerhouse

• Baby Boomers (born 1946-1964) currently account for the largest share of charitable giving
• As Boomers age, they are in peak giving years — and they hold approximately $78 trillion in wealth
• The "Great Wealth Transfer" — an estimated $84 trillion passing from Boomers to younger generations over the next 20 years — could reshape philanthropy dramatically
• Boomers give predominantly to religious organizations, health nonprofits, and their alma maters

Gen Z Donor Behavior (born 1997-2012)

Gen Z is beginning to enter the donor market with fundamentally different giving patterns:

• Cause-driven: Gen Z gives based on issues (climate, racial justice, mental health) rather than institutional loyalty
• Digital-first: Crowdfunding, social media campaigns, and peer-to-peer fundraising are the primary channels. Traditional direct mail and events are far less effective
• Low trust in institutions: Gen Z is skeptical of large institutions, including large nonprofits. They prefer smaller, grassroots organizations they can verify through social media
• Activism as giving: Gen Z blurs the line between donating and volunteering, viewing social media advocacy, boycotts, and purchases from social enterprises as forms of "giving"
• Smaller, more frequent gifts: $5-$25 donations are common, often in response to social media campaigns
• Climate and racial justice priority: These are the dominant causes for Gen Z donors, displacing religion and traditional health/education giving

The Category Breakdown by Revenue Per Organization

Revenue per organization reveals which categories punch above their weight:

1. Health — $40.1M average per org
2. Science & Technology — $6.3M average per org
3. Mutual & Membership — $3.75M average per org
4. Medical Research — $3.73M average per org
5. Education — $2.85M average per org
6. International Affairs — $2.41M average per org
7. Civil Rights & Advocacy — $1.80M average per org
8. Employment & Jobs — $1.76M average per org
9. Mental Health & Crisis — $1.66M average per org
10. Housing & Shelter — $1.41M average per org

Projections for 2026-2030

Based on current trends, here's what the nonprofit sector may look like by 2030:

Near-Certain Trends

• Healthcare will continue to dominate: Revenue could reach $2.5T+ by 2030, accounting for 45-50% of all nonprofit revenue. Continued consolidation will create fewer but larger systems
• DAFs will keep growing: DAF assets could exceed $500 billion by 2030, raising the urgency of distribution reform
• The number of nonprofits will grow modestly: New formation will outpace closures, but the growth rate is slowing. The sector could reach 2.1 million organizations by 2030
• Small donor decline will continue: The share of households that give will continue to fall, concentrating giving among fewer, wealthier donors

Likely Trends

• AI transformation: By 2030, AI will be embedded in operations at most large nonprofits, creating efficiency gains but widening the gap with small organizations
• Climate philanthropy surge: Environment could become a top-5 category by revenue as climate urgency drives funding
• Tech nonprofit growth: AI safety, digital infrastructure, and open-source foundations will grow rapidly, potentially making Science & Technology a top-5 category
• Great Wealth Transfer effects: The intergenerational transfer of wealth will begin creating new foundations, DAFs, and giving patterns — though the full impact won't be felt until the 2030s and 2040s

Possible Disruptions

• DAF regulation: If Congress passes minimum distribution requirements, billions could flow from DAFs to operating charities, creating a one-time surge in nonprofit revenue
• Healthcare reform: Significant changes to healthcare policy (Medicare expansion, single-payer, etc.) could dramatically alter the nonprofit healthcare landscape
• Economic recession: A major recession would hit giving, government funding, and nonprofit investment returns simultaneously — creating the kind of sector-wide stress last seen in 2008-2009
• Political/regulatory changes: Changes to the charitable deduction, nonprofit tax exemptions, or university endowment taxes could reshape incentives across the sector
• Crypto and blockchain philanthropy: While hype has cooled, cryptocurrency donations and blockchain-based transparency tools could create new giving channels

Emerging Themes

Several cross-cutting trends are reshaping the sector:

• Consolidation: In healthcare, education, and philanthropy, larger organizations are getting larger through mergers, acquisitions, and organic growth. The "barbell" shape of the sector — a few giants and millions of small organizations — is becoming more pronounced
• Technology adoption: Nonprofits are investing in digital infrastructure, data analytics, and online fundraising at accelerating rates. AI will accelerate this further
• Climate and environment: The Environment category (28,453 orgs, $23.0B revenue) is growing as climate change drives increased philanthropic attention and government funding
• Social enterprise: More nonprofits are adopting earned-revenue models, blurring the line between nonprofit and for-profit. B Corps, social enterprises, and hybrid models are proliferating
• Trust-based philanthropy: Funders are increasingly shifting to unrestricted, multi-year grants — following MacKenzie Scott's model — which could improve nonprofit financial health
• Racial equity focus: The post-2020 racial reckoning has permanently shifted funding patterns, with more resources flowing to BIPOC-led organizations
• Remote and hybrid work: The pandemic-driven shift to remote work has permanent implications for nonprofit operations, talent recruitment, and overhead costs

The Bottom Line

Healthcare continues to dominate and grow. Technology and science nonprofits are emerging as a powerful force. Donor-advised funds are reshaping philanthropy. The environment sector is accelerating. Arts and youth development face challenges. And small, community-based organizations continue to do essential work despite an economic landscape that increasingly favors scale.

The $4.09 trillion nonprofit sector is dynamic, diverse, and evolving — and understanding its growth trends is essential for anyone who cares about the future of American civil society. The data tells a clear story: the sector is growing, but that growth is uneven. Where the next trillion dollars goes — to hospitals, foundations, tech labs, or community organizations — will depend on the decisions of donors, policymakers, and nonprofit leaders in the years ahead.