Infographic: What is Driving Nonprofit Sector's Growth?

During the recession, while for-profit businesses struggled with decreased revenues causing significant downsizing, high unemployment rates, and record breaking home foreclosures, the nonprofit sector continued its pattern of growth, and actually thrived. According to the recent Urban Institute’s Nonprofit-Government Contracts and Grants: Findings from the 2013 National Survey by Sarah L. Pettijohn and Elizabeth T. Boris, with Carol J. De Vita and Saunji D. Fyffe, one-third of revenue for public charities—501(c)(3) nonprofit organizations—in 2011 came directly from government grants and contracts. While according to the Urban Institute nearly 50 percent of organizations surveyed indicated they experienced a decrease in local, state or federal funds, the majority was able to survive without cutting programs or payroll. In fact, only 14 percent had to reduce their number of clients served when experiencing a cut in government funding.

The nonprofit sector is the third-largest workforce in the United States, behind retail and manufacturing, representing 10 percent of the total workforce in 2010. Public charities, the largest designation, contributed over $800 billion to the 2010 economy, making up 5 percent of the GDP and paying over $320 billion in wages. While the for-profit sector experienced an 8.4 percent decrease in employment and 8 percent decrease in wages, the nonprofit sector increased wages by 6.5 percent and overall employment by 4 percent. With the strong paid workforce, nonprofits also experienced an increase in volunteers and volunteer hours. In 2011, over 15 billion hours were contributed, with nearly 28 percent of U.S. adults supporting nonprofits through the volunteering of their time. More and more people are seeking ways to contribute to society either by changing careers, or through the volunteering with nonprofit organizations.

Education and healthcare are the two largest segments in the nonprofit sector, which explains the continued growth throughout the recession. The implementation of the Affordable Care Act and increasing support for education at all levels helps to explain the sector’s growth. Healthcare is by far the largest employer of nonprofit workers, representing 57 percent, with education second at 15 percent. While there is still some question surrounding how nonprofit hospitals will be affected by the Affordable Care Act’s new surveying requirements, it is still safe to presume that new jobs will continue to be added and administrative professionals will continue to be in high demand as greater focus and funding are placed on healthcare.

While traditionally the nonprofit sector is not top-of-mind when thinking about economic growth, the truth is that it successfully weathers economic downturns and contributes to the economy while providing much-needed services. How different would our world be if there were not dedicated individuals with a passion for helping others? Nonprofit organizations not only provide healthcare and education, but allow us to view great works of art, practice the religion of our choice, support the preservation of wildlife and the environment, help victims of natural disasters, and so much more. With competitive wages and benefits, strong job growth, and diverse opportunities, the nonprofit sector is becoming the sector of choice for many professionals dissatisfied in their for-profit sector careers. A strong background in public administration and a desire to change the world is all that is required to make the leap into one of the most growth oriented sectors in the U.S. economy.