This article originally appeared in Philanthropy Daily on September 19, 2019.
Those who care about the sector should probably be a little unsettled.
The total number of people working at nonprofit organizations was larger than the number working at manufacturing companies for the first time in 2017, according to an interesting analysis of U.S. Bureau of Labor Statistics data released late last month and updated earlier this month by the Johns Hopkins Center for Civil Society Studies’ (JHCCSS’s) Nonprofit Economic Data (NED) project.
Specifically, nonprofit groups employed an estimated 12,488,563 people, including full- and part-time workers and contractors, NED found. The private, for-profit manufacturing industry employed an estimated 12,399,293 people. “[T]his is just a mind-blowing discovery,” JHCCSS director Lester Salamon told The Chronicle of Philanthropy.
NED’s nonprofit-employment number exceeded those for private, for-profit employees in the categories of construction (approximately 6.9 million) and finance and insurance (5.9 million). It was smaller than those for for-profit workers in the categories of retail trade (15.8 million) and accommodation and food services (13.6 million).
In large part, the nonprofit-employment number’s overtaking of that for manufacturing reflects a slow-growing manufacturing industry in America. Nonprofit-sector employment growth is also occurring at a faster rate than that for the country’s entire for-profit workforce writ large, however.
From 2016 to 2017, the number of nonprofit workers increased almost 2%, compared to just more than 1.5% for for-profit workers, NED found. Between the pre-recession year of 2007 and 2016, according to a previous NED analysis last year, nonprofit employment grew by nearly 17%, while for-profit employment grew by less than 5%.
Overall, nonprofit employment accounted for approximately 10.2% of the national workforce in 2017.
Nonprofits’ revenue comes from a variety of sources. According to a National Council of Nonprofits report released earlier this week, 49% comes from fees for services and goods, 31.8% comes from government grants and contracts, and 14% comes from private contributions.
Ultimately, just like government could not exist without a profit-generating economy capable of paying for it, though, nonprofitdom as it’s understood could not really exist without for-profitdom, either. Even nonprofits’ government-grants and -contracts revenue, of course, is derivative of taxpaying entities or people yielding a monetary gain.
Hypothetically, there might come a point where nonprofit employment beyond its 10.2% share grows at such high rates that the sector simply cannot be sustained. Given its recent rising rates, this prospect should probably be a little unsettling to those who care about the nonprofit sector.
Others better equipped to do so can predict where that point might actually lie, and if and when it may be reached, but the current trend is clearly bringing us at least a little closer to it.