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Abstract
This paper investigates the impact of nonprofit activities, measured by their total contribution to gross domestic product, on poverty, measured by Medicaid payouts. Additional control variables include: the value of the housing stock, the employment level, the unemployment rate, outstanding securitized consumer credit, and the level of the stock market. The analysis might prove fruitful for the numbers-oriented individual who prefers to know how far a dollar will go before choosing an amount to donate to a charity or foundation; especially those interested in donating to health-oriented nonprofits. The empirical method used for analysis is ordinary least squares regression, and the independent variable of focus on is the gross value added to GDP from nonprofit institutions. The conclusion is that a one percent change in the value added to GDP from nonprofit institutions does not statistically influence the percentage change in Medicaid payouts if the population data is considered; however, eliminating structural breaks in the data (and analyzing a sample of the data instead of the population) changes the outcome so that a one percent change in the value added to GDP from nonprofit institutions does statistically influence the percentage change in Medicaid payouts.