Posted on January 21, 2012

Nonprofit Employment Outpaced Private Sector During 'Decade of Turmoil', Report Finds

The nonprofit sector added jobs at an annual average rate of 2.1 percent from 2000 to 2010, while employment in the for-profit sector fell 0.6 percent per year on average, a new study from the Center for Civil Society Studies at Johns Hopkins University finds.

Based on data from the Bureau of Labor Statistics' Quarterly Census of Employment and Wages, the report, Holding the Fort: Nonprofit Employment During a Decade of Turmoil (18 pages, PDF) found that even during the Great Recession (2007 to 2009), the nonprofit sector gained jobs at an average rate of 1.9 percent per year, while the private sector lost jobs at a rate of 3.7 percent per year. But while overall nonprofit employment grew faster than overall business employment during the reporting period, for-profit employment in three key fields — social assistance, education, and nursing home care — outpaced job growth in the nonprofit sector, resulting in nonprofits losing market share to for-profits in those fields. In the social assistance field, for example, nonprofit employment grew at an average annual rate of 2.2 percent per year, while for-profit employment grew at an average rate of 5.4 percent. As a result, nonprofits' market share in the field fell from 62 percent in 2000 to 54 percent in 2010.

The report also found that nonprofits employ the third largest workforce among U.S. industries, behind the retail and manufacturing sectors, with the vast majority of nonprofit jobs in health care (57 percent), education (15 percent), and social assistance (13 percent); and that nonprofit employment grew in all regions of the country over the ten-year period.

"Nonprofit organizations have been holding the fort for much of the rest of the economy over the past decade, creating jobs right through the recent recession and jobs crisis, while other components of the economy have been shedding jobs at accelerating rates," said the report's author, Lester M. Salamon, director of the Center for Civil Society Studies. "Ironically, with signs of recovery beginning to appear, there are serious questions about whether nonprofits will be able to sustain this resilient performance in the wake of the impending sharp cuts in government spending."