Napa County has a vibrant nonprofit sector. Five hundred public charities* generated nearly $800 million in revenue in 2004, the most recent year for which data is available. We estimate that nearly six percent of this revenue, about $45 million, was comprised of donations from individuals, families, corporations and foundations. The balance came chiefly from government contracts, government grants and paying customers, such as hospital guests and ticket buyers at the Napa Valley Opera House. Clearly, we live in a very generous community!

What makes Napa County special is not just our tradition of giving. We look different than large urban areas, such as San Francisco or Alameda, because our nonprofit sector is shaped less like a bell curve and more like a saddle. (We look similar to more rural counties, such as Mendocino and Solano, which also mirror the saddle graph plot.) Put another way, our 500 public charities tend to cluster into two groups: larger, well-established organizations and smaller, emerging organizations. For example, the ten largest nonprofits accounted for 89% of the sector’s revenue in 2004, while the 200 smallest accounted for 1%.

As you might expect, revenue is a pretty good proxy for who is providing most of the services in Napa County. While smaller organizations are doing essential things without much fanfare (just ask us about Un-tied Shoelaces or Paws for Healing or Angwin Community Teen Center), about 150 mid-sized and larger nonprofits are doing most of the charitable work in the Napa Valley.

So, what do these 150 active nonprofits look like?

• A very small handful has annual budgets of $50 million or more. They are our two hospitals, the North Bay Regional Center (which provides services to the developmentally disabled), and Pacific Union College. Most of their revenue is not from private donations, but fees paid by clients/students, government grants and government contracts.
  
  
• A few dozen have $1-$15 million budgets. They get sizeable grants from foundations and solicit donations from individuals. Several have large government contracts or grants; others earn a significant percentage of their income from the fees paid by clients. Some in this group are starting to think about building endowments and planned giving programs.
  
  
• The remaining 70 percent have budgets ranging from $100,000 to $1 million, and subsist largely on annual donations and smaller government contracts. Virtually none in this group have endowments. Many need to diversify their funding base with a greater variety of grants and an increase in private donations.
  
  

For most of our nonprofits, the elusive treasure is operating revenue: donations or grants that are not restricted to a specific program. Like for-profit businesses, nonprofits need money to run their operations—to pay salaries and benefits, rent and utilities, marketing and outreach expenses. Historically, operating funds are the most challenging to raise because of donors’ reluctance to fund overhead expenses. Our view on this point is different. We believe the only thing separating an average program from a stellar one is leadership. We invest in people who do what they say and perform consistently over time.

Other challenges facing the nonprofit sector in Napa County today: preparing for a leadership transition as a generation of long-serving nonprofit CEOs approaches retirement; building organizations that are financially sustainable; finding passionate Board members (and involving the next generation of community leaders, who are in their 30’s and 40’s, on nonprofit committees and Boards); building bridges between the Anglo and Latino communities; and attracting donors who are part-time residents or are new to Napa Valley.

*Please note that we use the following terms interchangeably to refer to 501(c)3 nonprofit organizations: public charities, public benefit companies/corporations, nonprofit organizations, nonprofit agencies. We have excluded private non-operating foundations from our analysis.