7.2% of Americans Work for Nonprofit Groups, Study Finds

By Suzanne Perry

Charities employ 7.2 percent of the nation's work force and have added paid jobs at a much higher rate than employers as a whole in recent years, according to a study released today that analyzed previously unavailable employment data.

The total wages paid by nonprofit groups also outstrip those of several other major industries, including utilities, construction, and wholesale trade, the study found.

"What these and related findings make clear is that America's nonprofit organizations not only contribute to the social and political life of the nation, but to its economic life as well," says a report on the study, which was conducted by the Center for Civil Society Studies at the Johns Hopkins University.

The study's researchers, Lester M. Salamon and S. Wojciech Sokolowski, analyzed data from the Quarterly Census of Employment and Wages, which is conducted by state labor offices in cooperation with the U.S. Bureau of Labor Statistics. This survey has not historically differentiated between for-profit and nonprofit employers, but the researchers worked with the federal bureau and selected state offices to find ways to extract data on charities.

Mr. Salamon said in an interview that this data is more precise than that used in previous studies of nonprofit work force.

The researchers also drew information from a monthly volunteering survey conducted by the U.S. Census Bureau so they could assess the impact of paid and volunteer charity workers combined. Analyzing data from the second quarter of 2004, the study found that:

• Charities employed 9.4 million paid workers and engaged the equivalent of 4.7 million fulltime volunteers (calculated by dividing the number of hours volunteered by the hours in a typical work year). Together, those workers represented 10.5 percent of the total American work force. The paid employees outnumbered those working for the utilities (800,000),wholesale trade (5.6 million), or construction (7.1 million) industries.

• From 2002 to 2004, the number of paid nonprofit workers grew 5.1 percent — while the work force as a whole fell 0.2 percent. This pattern occurred in almost every part of the country, even in regions where overall employment fell because of the economic recession then under way.

"This suggests that nonprofit employment functions as a countercyclical mechanism, continuing to expand to meet needs even as overall employment slumps," the report on the study says.

The Pacific region (Alaska, California, Hawaii, Oregon, Washington) gained the biggest share of new nonprofit jobs (10 percent), while the West South Central region (Arkansas, Louisiana, Oklahoma, Texas) added the smallest (less than 1 percent).

• Even in states with relatively small numbers of nonprofit workers, charities often employ more people than other significant industries. For example, 43,365 people hold paid and volunteer nonprofit jobs in Delaware, compared with 2,143 who work for utilities, 14,845 in wholesale trade, and 27,256 in construction.

• Nonprofit employees nationwide earned $321.6-billion in wages — more than the wages paid by the utilities ($50.1-billion), construction ($276-billion), or wholesale trade ($283.7-billion) industries. They earned almost as much as employees in the finance and insurance industry ($355.8-billion).

However, nonprofit workers earned less on average each week than their for-profit counterparts — $627 compared with $669 — mainly because charities are clustered in low-wage fields. Within those fields, however, nonprofit jobs paid more; for example, employees of nonprofit hospitals earned an average 7 percent more than those working for-profit hospitals.

• More than half (52 percent) of paid and volunteer nonprofit workers are located in three regions — the Middle Atlantic (New Jersey, New York, Pennsylvania), South Atlantic (along the Atlantic coast from Delaware to Florida), and East North Central (Illinois, Indiana, Michigan, Ohio, Wisconsin). Four states — California, New York, Pennsylvania, and Texas — account for 30 percent of the total workf orce.

• The bulk of nonprofit employees work in the human-services field. More than one-third of them have jobs with hospitals, and another 21 percent with other health providers such as clinics and nursing homes.

Mr. Salamon said the strength of the charity work force reflects the country's overall shift away from manufacturing industries to service industries. "Those industries we know are the really robust growth areas in our economy." It also reflects demographic changes such as the aging population, which has led to increased demand for health care and nursing homes, he said.

The report, "Employment in America's Charities: A Profile," including a state-by-state breakdown of nonprofit employment, is available on the Johns Hopkins University Web site.