Size of the U.S. Not for Profit Sector Revealed

A new report in the U.S. reveals the full size of its Not for Profit sector with 10.7 million workers, making up the third largest workforce among U.S. industries, only behind retail trade and manufacturing.

The findings come from a report presenting previously unavailable data on year-to-year changes in employment in private, NFP establishments in the U.S. from January 2000 through June 2010.

The John Hopkins University research found that while overall Not for Profit employment grew faster than overall business employment during the 2000-2010 decade, in three key fields—social assistance, education, and nursing home care—for-profit employment growth actually outpaced Not for Profits. As a result, NFP organisations operating in these fields lost significant market share to for-profits.

The report, Holding the Fort: Nonprofit Employment during a Decade of Turmoil, is based on data from the Quarterly Census of Employment and Wages, a data-collection program of state governments in cooperation with the U.S. Bureau of Labor Statistics.

In Australia, by comparison, the most recent figures from 2007 show that Not for Profit organisations make up 8 per cent of the country’s employment with some 889,900 workers (Data from ABS 2006-07 and Productivity Commission 2010).

In 2006/07, the 58,779 Australian NFPs contributed $41 billion to Australia’s GDP (out of a total GDP of $998 billion), equivalent to the contribution of government administration and defence ($40 billion), and almost double that of the agriculture industry ($21 billion)

Other findings from the US report include:

• The U.S. NFP sector employs 15 times more workers than the nation’s mining industry, nearly 10 times more workers than the agriculture industry, and about twice as many workers as the construction industry.
• The vast majority of NFP jobs are in three service fields—health care (57 percent), education (15 percent), and social assistance (13 percent).
• During the 2007-2009 recession, NFP employment grew in 45 of the 46 states on which state-specific data were available, while for-profit employment declined in 45.

The full report, Holding the Fort: Nonprofit Employment during a Decade of Turmoil, which includes charts with state by state data, is available at ccss.jhu.edu.

The Center is part of the Johns Hopkins Institute for Policy Studies, within the Department of Health Policy and Management at the Johns Hopkins Bloomberg School of Public Health.

The report says that defying two recessions, the sector posted a remarkable 10 year record of job growth, achieving an average annual growth rate of 2.1 per cent from 2000 to 2010, while for-profit jobs declined by an average of minus 0.6 per cent per year.

Even during the recession from 2007 to 2009, NFP jobs increased by an average of 1.9 per cent per year. At the same time, businesses averaged jobs losses of 3.7 per cent per year.

“NFP 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 Lester M. Salamon, study author and director of the Johns Hopkins Center for Civil Society Studies.

“Ironically, with signs of recovery beginning to appear, there are serious questions about whether Not for Profits will be able to sustain this resilient performance in the wake of the impending sharp cuts in government spending,” Salamon added.

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