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Joanne Fritz

Nonprofit Workforce Grew During Recession

By January 24, 2012

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People really do underestimate nonprofits.

But the fact is that nonprofit organizations provide 10.7 million American workers with employment. Lest you think that 10.7 million is pretty small, nonprofit is the third largest sector of our economy. The first two are retail trade, coming in at 14.5 million employees; and manufacturing, which claims 11.5 million. All the rest are divided up among areas ranging from construction to utilities. As share of total private US employment, nonprofit represents 10.1%.

What is even more impressive is that, according to The Johns Hopkins Nonprofit Economic Data Project, nonprofits have been creating jobs during the recent years of recession, while the rest of the economy has been shedding them.

According to the most recent Hopkins report on nonprofit employment, during the years 2000-2010 average annual nonprofit employment grew by 2.1%; while the average annual change in for-profit was minus 0.6%. Remember that from 2000-2010, the American economy suffered two recessions. The growth in nonprofit employment grew steadily during those years and outpaced the rate of growth for the for-profit sector in every year but one...and in that year, they were almost tied.

Why Has Nonprofit Employment Been So Steady?

The Hopkins report suggests that the strength of nonprofits can be accounted for, partially, because there has been growing government spending in the fields that are most dominated by nonprofits, especially through the American Recovery and Reinvestment Act.

In addition, nonprofit employment is heavily concentrated in service fields--especially health care, education, and social services. These areas account for 87% of nonprofit jobs. Service employment has been on the rise even as non-service employment (think manufacturing, construction, transportation, wholesale and retail) has decreased. Nonprofit jobs have been mostly found in the growth areas of our economy.

What's the Outlook? Can this Continue?

The Hopkins report points out that nonprofits already face stiff competition from for-profit entities that are moving into the traditional nonprofit service areas. From education to health care to social services, for-profit enterprises are establishing beachheads. For instance, in nursing home care, for-profit employment grew 2.3% (against nonprofit growth of 1.3%) and for-profit social assistance organizations grew 5.4% (vs 2.2% for nonprofit).

Nonprofit entities are losing market share in some of the fields where they have dominated. The Hopkins report suggests that nonprofits may be at a disadvantage given that they do not have access to capital the way for-profits do. The for-profit sector can adapt to changing market conditions faster than the typical nonprofit.

There is an abundance of information in the Hopkins report...good news but some warnings about the future. Download Holding the Fort: Nonprofit Employment during a Decade of Turmoil for the whole picture.

What are you seeing around you? How is your particular nonprofit niche faring?

See what other commentators are saying:

More about jobs in nonprofit:

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February 8, 2012 at 10:23 am
(1) Bill Huddleston says:

One of the challenges the non-profit sector organizations always face is how to provide leadership development opportunities for its staff, both paid and volunteer. If you’re interested in my article about how workplace giving can provide “practice fields or rehearsal halls” please send me an e-mail with “NP Leadership” in the subject line to billhuddleston at verizon dot net.

Bill Huddleston
The CFC Coach
http://www.cfcfundraising dot com

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