Nonprofit Boom Yielding Strategic Opportunities for Business

The number of nonprofit organizations in Puerto Rico has more than doubled in two decades, a dramatic expansion reshaping the island’s social-impact landscape, but also exposing deep structural challenges in how community needs are met.

For Glorymar Rivera Báez, president of United Way Puerto Rico, the surge is both a sign of civic commitment and a warning that the sector must evolve.

As United Way marks its 60th anniversary, she argues that the organization’s future lies in becoming a strategic bridge between nonprofits and the private sector to tackle the island’s most urgent social and economic pressures.

Companies want their social investment to carry strategic alignment and long-term metrics, Rivera Báez posit, rather than stopping at one-off donation drives, and United Way believes it can help develop that space by connecting them with nonprofits equipped to deliver. None of it works, she told Caribbean Business, unless the sectors stop operating in silos and start collaborating.

Rivera Báez, a member of the Board of the Puerto Rico Chamber of Commerce and chair of its Third Sector Council, notes that growth has been staggering.

“In a 2022 study the data tells us that around 13,400 organizations are incorporated on the island,” she said, citing research that shows the number of nonprofits jumped from roughly 5,000 in 2002.

But the proliferation has come with consequences. Many organizations operate independently, often duplicating efforts in the same geographic areas and competing for limited funding.

At the same time, financial pressures facing nonprofits have intensified. Federal funding has declined, state allocations have tightened, and operating costs, from electricity to staffing, have risen.

United Way has already seen two consecutive years of nonprofit closures among its affiliates, driven not by lack of demand but by lack of solvency.

“The main reason is the lack of economic solvency. They don’t have funds to operate,” she said.

A Sector at a Crossroads

The nonprofit boom reflects Puerto Rico’s shifting social reality, which also affects the business community’s consumer base and growth prospects.

Poverty, for one, remains near 40 percent, chronic health conditions are rising, and families struggle with the cost of living. Many residents work one, two, even three jobs and still cannot meet basic needs.

“Even though they are at those levels of poverty, people are working, but the money is not enough,” she said.

The data show how large that gap is. The Census Bureau puts the share of residents living in poverty at 37.3 percent, against 10.2 percent nationwide, and the median household income at $26,297, less than a third of the U.S. figure of $80,734. Among children, 52 percent live in poverty, according to the 2026 Kids Count Data Book.

Nonprofits must hold themselves accountable for their impact through key performance indicators (KPIs) and transparent reporting.

That is the lowest rate in more than three decades, but it still represents about 248,000 children.

Hunger and housing add to the strain. More than 1.2 million people depend on the Nutrition Assistance Program (PAN), according to the research group Espacios Abiertos, including some 241,580 participants who hold jobs. Meanwhile, the median home sales price reached $300,600 in June 2025, up 25 percent in a year, according to the U.S. Department of Housing and Urban Development, or more than 11 times the median household income.

Health care is thinning out as well. Puerto Rico has fewer than 10,000 physicians for 3.2 million residents, and more than 28 percent of them are older than 60. Between 365 and 500 doctors leave the island each year, more than twice the number of local residency graduates, according to a study in Jama Health Forum.

Demographics compound the pressure. The island’s population stood at about 3.18 million in 2025, roughly 14.5 percent below its 2010 level, while one in four residents is now 65 or older.

Barriers to employment, including access to childcare and transportation, keep many, especially women, from entering or staying in the workforce. These pressures contribute to migration trends that drain the island’s talent pool and weaken its economic competitiveness.

The basis for collaboration

Nonprofits have become the de facto safety net, providing services in health, education, food security, and community resilience. But the sector’s fragmentation limits its ability to scale solutions.

Rivera Báez, for one, believes the next decade must bring a shift toward integrated, collaborative models.

“As long as we don’t do this, the number of nonprofits closing will continue rising.”

When asked which social challenges demand the most urgent intersectoral coordination, Rivera Báez pointed to three pressure points that cut across every community: health, dignified work, and the rising cost of living.

She described Puerto Rico’s health landscape in particular as “a very urgent topic,” citing the rise in chronic conditions, the shortage of medical professionals, and the financial strain families face in accessing care.

At the same time, she emphasized that access to dignified work has become increasingly difficult, not because people are unwilling to work, but because structural barriers like childcare, transportation, and stagnant wages prevent economic mobility.

These pressures, compounded by escalating food, housing, and utility costs, form what she sees as the core set of challenges that no single sector can solve alone.

United Way at 60: A Strategic Bridge

United Way Puerto Rico, known locally as Fondos Unidos, is positioning itself as a connector between nonprofits, corporations, and government. With six decades of experience, the organization has built credibility in resource management and social-impact planning.

“These six decades have allowed us to develop a working base and the roadmap for social change.”

She sees United Way’s role as uniquely suited to the moment, an entity that understands community needs, has operational reach through nonprofit partners, and can speak the language of the private sector.

In recent years, she surmises, Puerto Rico’s business community has shown growing interest in corporate social responsibility (CSR), though fragmented across such philanthropic initiatives as golf tournaments, donation drives, and volunteer days. Rivera Báez, by contrast, believes efforts should carry strategic alignment and long-term metrics. Companies, she adds, want to do more but face the same economic pressures as families.

“There is a desire to be able to do more, but the cost is so much that it makes it difficult for the business to keep operating,” she said.

That tension, she argues, is precisely why nonprofits and businesses need structured collaboration and why government must play a role in easing the transition for workers who risk losing benefits if they increase their income.

Building a Culture of Accountability and Impact

For cross-sector partnerships to succeed, Rivera Báez, who has more than 20 years of experience in organizational development across the private and nonprofit sectors, emphasizes three pillars: accountability, shared power, and community-centered goals.

“To the extent metrics are established, we are promoting credibility,” she said, noting that nonprofits must hold themselves accountable for their impact through key performance indicators (KPIs) and transparent reporting.

Second, collaboration requires time and humility. “I have to be willing to invest the time and understand that from my sector I don’t always have all the answers,” she said.

And third, the work must remain focused on people, not institutions. “The protagonists are the people. What leads us to these collaborative unions is the well-being of the community.”

Policy Shifts and the Road Ahead

Rivera Báez is also pushing for policy reforms that would stabilize the sector. Chief among them: changing reimbursement rules for government-funded projects, which currently require nonprofits to front costs and wait months for repayment.

“That refund can come in 90 days, and organizations don’t have that level of liquidity,” she said.

She also supports legislative efforts to incentivize volunteerism and provide property tax relief for nonprofits that rent space to other service organizations.

At the federal level, United Way is advocating for funding for the 211 helpline, a critical but underrecognized resource for families seeking assistance. “People don’t know that the 211 line exists,” she said, noting that unlike 911 or 988, the service receives no federal support.

Rivera Báez’s vision is clear: Puerto Rico’s nonprofit sector must move from proliferation to coordination, from fragmentation to shared strategy. And United Way, entering its seventh decade, wants to lead the shift.

“Puerto Rico is 100 by 35,” she said. “We need to work collaboratively because it will be very complicated to bring to the fore an agenda if each sector wants to be a protagonist.”

On an island facing demographic decline, economic strain and persistent social inequities, the future of nonprofits, and the communities they serve, may depend on whether that collaborative vision takes hold.