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August 21, 2011

Report: Employment, wages paid by state nonprofits increased steadily

Buoyed by gains in the health services and education sectors, employment and wages paid by Indiana nonprofit organizations increased steadily in recent years, according to a new report by Indiana University researchers.

The gains came at a time when jobs were decreasing in other sectors of the state’s economy. And while nonprofit employees continued to earn less than their peers in the government and for-profit sectors, the wage gap was cut in half between 2005 and 2009, the period covered by the report.

The report was produced by the School of Public and Environmental Affairs, the Center on Philanthropy, the Indiana Business Research Center at Indiana University’s Kelley School of Business and the Johns Hopkins Nonprofit Data Project. It is part of the Indiana Nonprofits: Scope and Community Dimensions project, which Grønbjerg directs.

“Nonprofit organizations continue to make significant contributions to the quality of life for Indiana citizens by offering healthcare, education, job training, access to arts and culture and opportunities for democratic participation,” the authors write. “They also are a major force in the state’s economy and in the economic health of all the state’s regions.”

Key findings of the report include:

• As of 2009, Indiana nonprofit organizations accounted for nearly 250,000 paid employees and a payroll of close to $9 billion, or about 9 percent of the respective totals for the state.

• Indiana nonprofit employment grew by 5.9 percent from 2005 to 2009 while total employment in the state declined by a similar percentage and for-profit employment fell 8.6 percent.

• Growth in nonprofit employment was concentrated in health and education industries; employment decreased in arts, culture and recreation, social assistance, and membership associations.

• Nonprofit payroll grew by 11.2 percent (driven mainly by growth in health care and education payrolls), faster than the number of nonprofit employees, while total payroll in the state declined by 7.5 percent.

• Nonprofit average annual wages increased by 5.1 percent adjusted for inflation, while for-profit average annual wages decreased by 2.7 percent. Nonprofit average annual wages grew the most in education (6.7 percent), membership organizations (5.1 percent), and health care (3.2 percent), held steady in social assistance, and declined in arts, entertainment and recreation (-3.1 percent).

• For-profit employees had annual wages 12.5 percent higher than nonprofit employees in 2005; in 2009, the gap was only 6 percent.

Fifty-four percent of all Indiana nonprofit employees in 2009 worked in health care, while 13 percent worked in education, 11 percent in membership associations, 11 percent in social assistance and 3 percent in the arts. (Public school teachers and public university faculty and staff are considered government employees, not nonprofit employees.)

Nonprofit employees in Indiana earned an average of $36,000 a year in 2009, the report says. Government employees earned an average of $39,000. Average pay was $38,300 for employees of for-profit businesses, including very low-paid workers in the food and accommodation industry.

The report draws on data generated by the Indiana Department of Workforce Development through surveys of Indiana workplaces. The data were prepared for the project by the Indiana Business Research Center through a confidentiality agreement with the state.

The report, the fourth in a series on nonprofit employment, focuses mainly on 2009 employment figures with some comparisons to 2005 and 2007. Future reports in the series will explore trends in nonprofit employment back to 1989 and provide more detailed analysis for major nonprofit industries and the state’s economic growth regions and metropolitan areas.

A summary of the report is available at www.indiana.edu/~nonprof/results/inemploy/innonprofitemploy09.htm.

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