FOR-PROFITS ARE CREEPING ON THE NONPROFIT SECTOR’S TURF

By February 8, 2019 Blog

The Johns Hopkins Center for Civil Society Studies has released the 2019 edition of their Nonprofit Employment Report. The updated study finds U.S. nonprofits maintained a robust pattern of job growth through 2016, the latest year for which data are available. However, the data seems to also indicate that for-profit companies are making significant inroads in key nonprofit fields, cutting into nonprofits’ market share.

Drawing on the rich body of data generated by the U.S. Bureau of Labor Statistics’ Quarterly Census of Employment and Wages, the Hopkins report sheds important new light on recent nonprofit employment dynamics. Among the findings:

  • Between 2007 and 2016, the number of jobs created by U.S. nonprofits grew by 16.7%, nearly four times faster than the country’s for-profit businesses
  • Nonprofit job growth was also more consistent, growing both during the recession period of 2007-12 and in the more recent 2012-16 period, whereas for-profit employment fell in the early period and just barely made up the lost ground more recently.
  • Thanks to this growth, by 2016, the nonprofit workforce outdistanced that of all branches of manufacturing in well over half of America’s states.
  • Nonprofits also generated the third largest payroll income of any U.S. industry in 2016, behind only manufacturing and professional services.
  • But nonprofit successes have attracted for-profit firms into nonprofit fields, leading to worrying declines in nonprofit market shares in fields as diverse as social assistance, nursing homes, and hospital care.

These developments come at a crucial time for the nonprofit sector given major challenges facing the sector as a result of federal policy changes and the 2017 Federal Tax Cut and Jobs Act. For instance, Independent Sector just released a study that indicates the 2017 tax cuts are having negative effects on some nonprofit benefits.

About the Johns Hopkins Center for Civil Society Studies

The Johns Hopkins Center for Civil Society Studies is a leading source of ground-breaking research and knowledge about the nonprofit sector, social investing, and the tools of government. Working in collaboration with governments, international organizations, investment innovators, and colleagues around the world, the Center encourages the use of this knowledge to strengthen and mobilize the capabilities and resources of the public, nonprofit, and for-profit sectors to address the complex problems that face the world today. The Center conducts research and educational programs that seek to improve current understanding, analyze emerging trends, and promote promising innovations in the ways that government, civil society, and business can collaborate to address social and environmental challenges.

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