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by Paul Clolery
The nonprofit share of the total non-government workforce decreased from 10.2% in 2017 to 9.9% in 2022, reflecting losses in nearly all fields in which they are significantly active. However, the nonprofit sector’s 12.8 million workers made it the third largest employer in the U.S. non-government economy as of 2022.
Between 2019 and 2020, when the COVID-19 pandemic began, nonprofit employment declined by 580,000, or 4.5%. Nonprofits fared better than for-profits overall, which shed nearly 7% of workers. Nonprofits faced challenges in re-staffing during 2021 and 2022, lagging for-profit counterparts.
The nonprofit sector was left with a workforce 1.4% smaller than in 2019, while the for-profit workforce grew by 2.2%. As a result, nonprofits lost ground to for-profit counterparts in terms of market share. The nonprofit share of the total non-government workforce decreased from 10.2% in 2017 to 9.9%.
This is some of the data released today in the “2024 Nonprofit Employment Data Report” by The Center on Nonprofits, Philanthropy, and Social Enterprise at George Mason University’s Schar School of Policy and Government. It is part of the George Mason University – Nonprofit Employment Data Project (GMU-NED).
This report is an initial look at new data on nonprofit employment and wages covering the period 2018-2022 that have been generated by the U.S. Bureau of Labor Statistics (BLS) from the Quarterly Census of Employment and Wages (QCEW). Researchers examined where nonprofit employment and wages stood in the immediate pre-COVID years, how they were impacted by the onset of the COVID-19 pandemic, and how they have recovered as of 2022, the latest year for which data are available.
“Overall, as detailed in the report, as of 2022, nonprofits had restored nearly 70% of the more than half-million workforce losses they suffered in 2020,” said Alan J. Abramson, Ph.D., and director of the Center on Nonprofits, Philanthropy, and Social Enterprise. “But that left significant ground for nonprofits to make up to get back to the employment levels they enjoyed in 2019 in several key fields, and even further to go to catch up to where the sector’s workforce would have been without these losses.”
Nonprofits continued to pay roughly similar average annual wages as for-profits overall during 2022 — 97.2% versus the 96.7% paid in 2017. In several key fields, nonprofit average annual wages continued to surpass those paid by for-profit counterparts by significant margins, with social assistance nonprofits paying 52.8% more (a 3% drop vs. 2017) than for-profits in the same field; educational services nonprofits paying 42.3% more (a drop of 7.3%) than for-profit institutions; and health care nonprofits paying 12% more than for-profit health care providers (an increase of 3% vs. 2017).
There were silos that didn’t do as well. Religious, grantmaking, civic, professional, and similar nonprofits continued to pay nearly 18% less on average than their for-profit counterparts in 2022, this was an improvement of 5.4% compared to 2017. Arts, entertainment, and recreation nonprofits lost ground by 2.6% vs. their for-profit counterparts.
“My hunch would be that government funding helped sustain social assistance in the initial years of the pandemic but that this funding subsided after a while,” said Abramson. “Government funding is less important for the arts, and this sub-sector was down significantly in the first year of the pandemic and has been slow to come back.”
The biggest surprise to Abramson is that “the BLS doesn’t produce nonprofit employment data more regularly. Nonprofits account for a sizeable 10% of the private workforce. Why do we have to wait five years to know how this significant employer is doing?”
Looking forward, the declines might continue due to anticipated federal cutbacks. “It’s a surprise to most people to learn that government provides more income for nonprofits than all sources of philanthropy combined. If the Trump administration is successful in making significant cuts in government programs, philanthropy will be unable to offset these cuts, nonprofits will have to cut back their workforce, and service delivery will suffer, he said.
A new George Mason University Nonprofit Works data explorer site will soon be launched which will allow users to explore and download the data they need to support their work, said Abramson.
Go here to read the full report … click here.
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