Study: A Strong Decade for Nonprofit Employment, but New Threats Loom

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January 18, 2012; Source: Johns Hopkins University Center for Civil Society Studies | Last week, Johns Hopkins University’s Center for Civil Society Studies released “Holding the Fort: Nonprofit Employment During a Decade Of Turmoil.” Authors Lester M. Salamon, S. Wojciech Sokolowski and Stephanie L. Geller conclude that “nonprofits have been holding the fort for much of the rest of the economy, creating jobs at a time when other components of the economy have been shedding jobs at an accelerating rate.”

The authors attribute the sector’s “shielding” from job loss—even during the recession of 2007-2009— to its high rate of involvement in service fields and the government funding that has traditionally followed. But they also emphasize the critical need for policymakers and stakeholders to “keep the sector’s potential in view” during this period of spending cuts.

The study contains a mind-boggling array of statistics that highlight the value of the nonprofit sector to nine regions of the country and to the U.S. economy as a whole. In 2010, for example, the sector employed nearly 10.7 million paid workers, or ten percent of the country’s total private employment, making the sector the third-largest private employer behind retail trade and manufacturing. The study also reveals that 84 percent of nonprofit jobs are concentrated in three service fields: health care, education and social assistance. Whereas the nonprofit sector grew at an annual rate of 2.1 percent during the period, the for-profit sector lost jobs at an average annual rate of minus 0.6 percent.

The report, which was conducted with support from the Charles Stuart Mott Foundation, relies on 2000-2010 data from the Quarterly Census of Employment and Wages, a data collection program led by state governments in cooperation with the U.S. Bureau of Labor Statistics.

The study also highlights an emerging and worrisome trend for the nonprofit community: the for-profit sector’s expansion into service fields. In some cases, for-profits outpaced the growth rates and market share of the nonprofit sector. For example, the study points out that for-profit growth outpaced nonprofit growth in education, nursing home care and social assistance. As explanations for this rapid growth, the authors suggest the for-profit sector’s comparatively greater access to capital and outsourced government work. The only major field in which nonprofits gained significant market share was arts and recreation; in this field, nonprofit market share increased nearly three percent.

In conclusion, the authors recommend review of  “the significantly unequal playing field on which nonprofits are forced to compete” in order to preserve the sector’s critical resilience during a time of high need. –Anne Eigeman