Nonprofit wages climbed more than 17 percent from 2003 to 2013, and employment grew 14 percent, despite the biggest economic downturn in decades, according to the Urban Institute’s 2016 Nonprofit Almanac.
That’s better than either businesses or the government, says the report, which looked at nonprofits with at least $50,000 in annual revenue that file Forms 990 with the Internal Revenue Service.
At the same time, the number of charities grew 23 percent, from more than 237,000 in 2003 to nearly 294,000.
The fact that charities did as well as they did during the recession is significant because the nonprofit world accounts for 5.4 percent of the gross domestic product and employs 14.4 million people. Massive nonprofit job losses and reduction in nonprofits services could have meant an even more dire overall economy than Americans experienced, say the report’s authors.
“The nonprofit sector is resilient,” says Nathan Dietz, senior research associate at Urban Institute’s Center on Nonprofits and Philanthropy.
“What kind of a role has the support of the nonprofit sector played in the overall recovery of the economy?” Mr. Dietz says. “It’s been able to provide a safety net. If not for the nonprofit sector, a lot more people would be in real trouble.”
Weathering the Recession
From 2007 to 2010, the rate of growth at nonprofits outpaced that of businesses and government, according to the report. And early in the recession, from 2008 to 2009, when government and businesses saw declines in wages, pay in the nonprofit world held steady.
Furthermore, just 5 percent of nonprofits with revenue of at least $50,000 in 2008 were shuttered by 2012.
That’s not to say charities were untouched. Nonprofits with revenue of $50,000 to $100,000 were hardest hit, with steeper revenue losses and more closures than any other size nonprofit. Arts organizations struggled more than other causes, which is “perhaps expected when people have less discretionary income,” says Brice McKeever, research associate at the Center on Nonprofits and Philanthropy at the Urban Institute.
A Picture of Growth
The Urban Institute publishes its comprehensive analysis of the nonprofit landscape every four years. This ninth edition of the Nonprofit Almanac is the first that incorporates data from before, during, and after the economic slump that slashed stock-market growth and triggered widespread job loss.
For all nonprofit employees, average annual pay increased 8.6 percent from 2000 to 2013, going from $31,501 to $43,178.
The report credits health care and social-assistance programs, including hospitals, soup kitchens, and senior centers, for much of the growth, which contributed 57 percent of all nonprofit wages in 2013.
Other findings from the report:
- Grant makers gave 52 percent more in 2014 than they did in 2004. During the past 15 years, family foundations have increased in number, asset size, and grant-making activity.
- In one regard, at least, nonprofits in the Northwest were the big winners. Of the 50 largest metropolitan areas in the United States, nonprofits in the region that includes Portland, Ore., and Vancouver, Wash., had the greatest revenue increase from 2003 to 2013, at 283 percent. That was followed by the Denver region (111 percent) and the New Orleans region (103 percent). However, those areas also experienced the greatest percent increase in expenses during those 10 years.
- Private fees for goods and services made up nearly half of revenue for charities in 2013. Fees for goods and services from the government accounted for a quarter of revenue, followed by private contributions (13.3 percent), government grants (8 percent), investment income (4.8 percent), and money from dues, rental income, and special events (1.6 percent).
If hospitals and institutions of higher education are removed from the data, the proportions change. Private fees for goods and services account for one-sixth of revenue, fees for goods and services from the government, more than a third, and private contributions a fourth, followed by government grants 14.1 percent, investment income 5.5 percent, and money from dues, rental income, and special events 2.1 percent.
