Tor hides your location from destination servers, but it does not encrypt <i>all</i> your communication. The last relay of a Tor circuit, called the <i>exit node</i>, establishes the actual connection to the destination server. This last step can be unencrypted, for example, if you connect to a website using HTTP instead of HTTPS.
Observe your traffic. That is why <i>Tor Browser</i> and Tails include tools to encrypt the connection between the exit node and the destination server, whenever possible.
The Tornetwork has more than 6 000 relays. Organizations running Torrelays include universities like the MIT, activist groups like Riseup, nonprofits like Derechos Digitales, Internet hosting companies like Private Internet Access, and so on. The huge diversity of people and organizations running Torrelays makes it more secure and more sustainable.