Even as most sectors of the economy saw significant layoffs during the Great Recession of 2007-09, the nonprofit sector registered steady annual increases in employment, total wages, and number of organizations, new data from the Bureau of Labor Statistics show.
According to the latest BLS Monthly Labor Review, nonprofit employment from 2007 to 2012 increased 8.5 percent, from 10.5 million to 11.4 million, with the sector adding new jobs every year. In addition, total annual wages (before inflation) rose from $421 billion in 2007 to $532 billion in 2012, an increase of 26 percent, while the number of newly established nonprofit organizations increased 15 percent, from 232,396 to 267,855. By contrast, total private-sector employment declined 3 percent between 2007 and 2012 — with a 7 percent drop between 2007 and 2010. In 2011 and 2012, however, as the economic recovery gained strength, total private employment and annual wages grew faster than they did in the nonprofit sector.
Confirming a dynamic that many had suspected to be the case during previous downturns, the BLS figures confirm that the nonprofit sector played a counter-cyclical role in the most recent recession, growing larger as other sectors of the economy were shrinking, the Washington Post reports. "In times of greatest human need, the nonprofit sector is there," Shena Ashley, director of the Center on Nonprofits and Philanthropy at the Urban Institute, told the Post. "As a field, we're really excited about these results. They show that the model works."
At the same time, the increase in nonprofit sector employment was not a reflection of increased charitable giving, and while federal government funding awarded through the American Recovery and Reinvestment Act of 2009 helped many nonprofits expand their services, many other organizations were forced to dip into emergency funds to keep their doors open. Moreover, with many organizations' resources now depleted and demand for services trending downward, the next BLS report could show a decline in sector employment. And that may not be a bad thing. "We are seeing some organizations start to shed emergency staff that they had to bring on," Ashley told the Post. "We're not trying to support this huge nonprofit infrastructure. We're happy to see that it can serve when it's needed."