The 2020 Nonprofit Employment Report: The 3rd largest employer faces the COVID-19 crisis

A new report from the Johns Hopkins Center for Civil Society Studies finds that U.S. nonprofits maintained their position as the third largest employer in the U.S. economy, overtaking manufacturing by nearly 100,000 workers nation-wide in 2017, and exceeding that industry in 28 states and territories across the U.S. Indeed, the only industries employing more workers than the nonprofit sector in 2017 were retail trade and restaurants and hotels.

However, as is the case with all sectors of the economy, nonprofits face challenging times as a result of the on-going COVID-19 pandemic, with projected job losses of over 1.6 million between March and May of 2020—all at a time when demand for their services is growing. And well-documented challenges facing nonprofits in accessing government support funds through the Paycheck Protection and the Main Street Lending Programs may compound these losses, accelerating for-profit gains in market share in many traditionally nonprofit fields.

These are just some of the major conclusions emerging from the 2020 Nonprofit Employment Report. 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 2017, the number of jobs created by U.S. nonprofits grew by 18.6%—three times faster than the country’s for-profit businesses over the same period.
• Nonprofits also generated the third largest payroll income of any U.S. industry in 2017, behind only manufacturing and professional services.
• Contrary to popular belief, nonprofit average weekly wages per employee are nearly equal to those paid by for-profits overall—and are actually much higher than for-profit wages in many of the key nonprofit fields.
• But nonprofit successes—and government policies—have attracted for-profit firms into nonprofit fields, leading to increasing declines in nonprofit market shares in fields as diverse as social assistance, nursing homes, and hospital care.

NONPROFITS and COVID-19

As work on this report proceeded, the 2020 COVID-19 pandemic was just emerging around the world, and it rapidly became clear that efforts to slow the spread of the virus would have profound impacts on all aspects of our lives—from the loss of friends and family, to the limitations on movement and social interactions, to the devastating economic toll these actions would take on workers and businesses in all sectors of the economy. And nonprofits are certainly not immune to these effects.

This not only made this year’s report especially important in order to establish the most recent baseline of information possible against which to chart the virus’s impact, but also, it induced us to seek available and additional data that would allow us to make meaningful estimates of the impact of current developments, and current policy responses, on this crucial sector. Accordingly, this report also examines two aspects of the current crisis on the nonprofit employment scene:

• First, estimates of the scale of impacts on nonprofit employment of both the enormous economic and social changes unleashed by the COVID-19 pandemic that show an estimated loss of over 1.6 million jobs sector-wide; and
• Second, the ability of nonprofit organizations to gain access to the Paycheck Protection Program put in place to shield American society from this impact based on the number of employees, which finds that, while nearly 98% of organizations fall below the 500-employee threshold, only 38% of nonprofit workers do.

The data presented here can thus be of crucial importance to sector leaders, government policymakers, the media, and citizens at large in comprehending the vital role that the nonprofit sector plays in the social and economic wellbeing of the nation; the way in which COVID-19 is impacting this sector; and the challenges that nonprofits have encountered in gaining access to the financial support that government policy has theoretically opened up to the hundreds of thousands of nonprofit organizations and millions of nonprofit employees that qualify as “small businesses” under the recent federal programs of assistance to such organizations.

See the Johns Hopkins Center for Civil Society Studies’ 2020 Nonprofit Employment Report for further information on these and other current features of nonprofit employment and wages, including:

• Nonprofit share of private employment by state and territory.
• Nonprofit employment and wages compared to the largest for-profit industries.
• Nonprofit employment compared to manufacturing employment by state and territory.
• Nonprofit share of private employment in major fields of activity.
• Nonprofit vs. for-profit average weekly wages by field.
• Nonprofit employment growth by state and territory.
• Nonprofit vs. for-profit growth and market share by field between 2007-2017.
• Estimated nonprofit job losses by field due to the COVID-19 pandemic.
• Nonprofit eligibility for the Federal COVID-19 Paycheck Protection Program based on the 500-employee limit imposed on that assistance.

The 2020 Nonprofit Employment report is available for download now. And coming soon, an accompanying interactive data dashboard will provide access to state-level data on nonprofit share of 2017 private employment overall, by field, and as a share of manufacturing employment; employment changes between 2013 and 2017; and nonprofit average weekly wages compared to wages in the for-profits operating in the same fields.