Nonprofit organizations did more than just feed the hungry and shelter the homeless during the recession. While their for-profit counterparts were laying people off, nonprofits were adding jobs.
The nonprofit sector celebrated record job growth during the past decade, according to a new report from Johns Hopkins University. From 2000 to 2010, nonprofits jobs increased by an average of 2.1 percent per year. In the meantime, traditional businesses shed jobs at an annual rate of about 0.6 percent.
Even during the 2007-2009 recession, while the for-profit sector recorded job losses of 3.7 percent per year, nonprofit employment continued to grow by 1.9 percent.
"Nonprofit organizations have been holding the fort for much of the rest of the economy over the past decade," said Lester M. Salamon, study author and director of the Johns Hopkins Center for Civil Society Studies, in a news release.
Nonprofit job growth over the past decade can be attributed, in part, to increased government spending, according to the report. Nonprofits are also heavily concentrated in service fields, which have been expanding.
While nonprofit workers clock in at more than 1.9 million tax-exempt organizations, ranging from social service agencies to museums, the vast majority — 84 percent — work in healthcare, education and social assistance. Fifty-seven percent of U.S. nonprofit jobs are at hospitals, health clinics and nursing homes. Fifteen percent are at educational facilities. Thirteen percent are at social service agencies.
With sharp government spending cuts on the horizon, Salamon said there are "serious questions" about whether the nonprofit sector will retain its resilience.
Some in the nonprofit community have also expressed concern that President Barack Obama's proposal to put a limit on the tax write off for gifts to charity could adversely affect nonprofit employment.
“Limiting the itemized deduction would certainly lead to a significant decrease in charitable contributions. If charities have less resources, they’ll be forced to choose between laying off employees or cutting needed services,” William C. Daroff, vice president for Public Policy at the Jewish Federations of North America, told The Chronicle of Philanthropy.
About 10.7 million people are employed by the nonprofit sector, Johns Hopkins University reported. In comparison, the manufacturing industry employs 11.5 million, the construction industry employs 5.5 million and the agriculture industry employes 1.1 million.
“Nonprofits employ almost 10 percent of the work force nationwide, and in many states nonprofits are the largest employers," Daroff said. "In our view, cutting the deduction is like cutting your nose to spite your face."