Nonprofit Employment Remains below Pre-Pandemic Levels

A report issued last week by the Center for Civil Society Studies at Johns Hopkins University finds that unemployment in the nonprofit sector remains high many months after the most intense period of the COVID-19 economic shutdown last spring. While the number of nonprofit jobs was 12.48 million in February; as of December, it was 11.55 million. That works out to 7.4 percent fewer jobs than 10 months before.

In short, nonprofit employment remains 929,000 jobs below pre-pandemic levels. While this is an improvement from the peak nonprofit layoff level of 1.64 million last spring, it suggests that full employment recovery in the nonprofit sector remains a distant goal. Indeed, in December, nonprofit employment actually took a step backward, with the number of nonprofit jobs declining by over 50,000.

This data builds on a study that the Center conducted last June, which NPQ covered in depth. As we noted then, for nearly 20 years, Dr. Lester Salamon has been issuing reports on the health of the nonprofit sector. (We have covered past reports as well, such as this one in 2019). Typically, these reports provide high-level data about the size and scope of the nonprofit sector. For example, the 2020 report, based on 2017 data, found that the nonprofits generated $670 billion in wages and that nonprofit wages were 97 percent of private sector wages but exceeded private sector wages where nonprofits are prevalent. (In other words, on average, nonprofits are overrepresented in low-paying industries but pay their workers better than same industry for-profit firms).

But as they prepared their 2020 report, Salamon and coauthor Chelsea Newhouse decided to take on the challenge of tracking nonprofit employment health in real time. The figures they found were stunning—1.64 million jobs lost, 13 percent of all nonprofit employees.

Then, in the fall, they started to track, month by month, the slow recovery from those devastating numbers. By the end of August, nonprofit employment increased substantially, even if it remained nearly a million below pre-pandemic levels.

But then recovery started to stall out. By the end of September, nonprofit employment was still 973,000 below pre-pandemic levels. By the end of October, it improved to 911,000 below pre-pandemic levels. By the end of November, it was still at 878,000 below pre-pandemic levels. And now it has gone back up to 929,000 below—in other words, the December numbers wiped out over two months’ worth of gains.

As the Center notes in its most recent report, “What these data reveal is a striking reversal of the admittedly tepid growth in nonprofit employment in the prior three months, leaving nonprofit employment still down by a conservatively estimated nearly 930,000 jobs by the end of the year.”

The Center, drawing on the US Bureau of Labor Statistics’ monthly reports, breaks down the data by sector—and what it shows is something that we have written about often at NPQ—namely, vast differences within the nonprofit sector.

Nonprofit Job Loss

Sector	Feb 2020 Jobs	Peak loss (May)	Year End 2020 loss	Year-End loss (%)
Educational services	2,003,634	323,201	299.933	-15.0%
Health care	6,777,730	574,530	212,351	-3.1%
Social assistance & childcare	1,528,920	259,007	137,714	-9.0%
Arts	355,965	205,964	130,360	-36.6%
Civic, advocacy, religious, etc.	818,562	218,167	76,892	-9.4%
Miscellaneous other	555,421	62,259	31,921	-5.7%
Total	12,482,741	1,643,128	929,073	-7.4%

As can be seen by the above chart, nonprofits in most fields at present have employment declines that are less than 10 percent, but educational nonprofits still are 15 percent below pre-pandemic employment levels, and arts nonprofits remain a staggering 36.6 percent below pre-pandemic levels. At NPQ, we have noted the disparate effect of the pandemic on the arts before, including earlier this week. But these employment numbers drive home how severe the decline is.

Overall, the Center’s report notes that after the big post-shutdown boost at some nonprofits in June (an estimated 24.4 percent of all lost jobs—about 400,000—were recovered in that month) and an average above 100,000 a month in July and August, employment recovery has been exceedingly modest. Even including those months of July and August, only 52,190 nonprofit jobs have been recovered per month over the past six months. At this pace, the authors note, “it would take the sector 17.8 months, or 1.5 years, to return to its pre-COVID level of employment.” For the arts, the expected date of recovery of full employment lies 25.5 months in the future.

As we noted earlier on, and should be obvious by now, the effect of this crisis on nonprofits differs from that of the Great Recession and will continue to do so. During the Great Recession we noted, nonprofit employment went up, acting as a kind of automatic stabilizer. In the COVID economy, however, although some nonprofits do well, many have suffered—particularly those that depend on congregate sites, like performing arts centers, museums, childcare centers, and senior centers.

In the report, the Center optimistically anticipates that job recovery will resume “thanks to the increasing availability of vaccines and the expanded attention the virus is expected to receive” from the administration of President Joe Biden. It will be important, however, to continue to track how well different parts of the nonprofit community are able to both sustain the crisis and, ultimately, hire more staff once again.—Steve Dubb