June 15, 2011; Source: Long Island Business News | The Long Island Association has issued a report declaring that the island’s nonprofit sector is growing faster than the private sector despite a tough economy, inter-nonprofit and intersectoral competition, and reduced government support.
The telling statistic is job growth. During the past 10 years, employment in Long Island industries dominated by nonprofits (for example, health care and education) increased from 100,181 to 132,640, a jump of 32 percent, compared to total employment that only increased by 15,000 jobs, from 1.19 to 1.2 million. That means, in all probability, that nonprofit employment increased while private sector employment declined. The study, authored by LIA economist Pearl Kamer, indicates that nonprofits accounted for 8.4 percent of jobs in 2000, but 11 percent in 2010.
The report’s sponsor, the Long Island Association, isn’t a nonprofit trade association. It’s a business lobby representing business interests, including multiple chambers of commerce, in both Nassau and Suffolk counties, but its formal mission to promote the economy of the region requires that it pay attention to nonprofit as well as for-profit slices of the sector.
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Although nonprofits might want to flex their biceps about the report’s findings, there are legitimate questions:
- Nonprofits are using reports of this kind to tout the nonprofit sector itself as an economic generator as opposed to its role in supporting and promoting economic growth. Should the nonprofit sector be reconceptualized as a growth point for the economy in its own right? Consequently, given its capacity to grow despite economic downturns, should the nonprofit sector be encouraged and subsidized to grow?
- Is it healthy for the nonprofit sector to be growing as robustly as it is in comparison to the decline of traditional private sector industries?
- Does the Long Island Association report describe a growing nonprofit sector or a growing health and education component of the nonprofit sector? We have had plenty of reports of the decline of other parts of the nonprofit sector, particularly human services nonprofits that have been whipsawed between plunging charitable giving and chaotic state and local budget cuts.
Is the nonprofit sector really growing? Note that the article also mentions a report from Cerini & Associates that says three-fourths of Long Island nonprofits reported fundraising as flat or down, and the proportion that relied principally on government funds had declined from 47 percent to 30 percent.—Rick Cohen