Nonprofits are a major employer and crucial economic driver in nearly every U.S. state and territory. The tax-exempt organizations made up almost 10 percent of all American private-sector jobs between 2017 and 2022, according to a new nonprofit employment analysis from George Mason University.
The analysis, drawing on data from the U.S. Bureau of Labor Statistics, finds that while the sector lost millions of jobs during the pandemic, it largely bounced back by 2022. However, the rebound could be short-lived as nonprofits face new funding threats that could force layoffs. A Chronicle of Philanthropy rough estimate (and likely significant undercount due to the lack of month-to-month data) finds that the sector lost at least 20,000 jobs since Trump took office on January 20.
The George Mason analysis finds that in early 2020, the start of the pandemic, the sector lost 580,426 jobs, or 4.5 percent of the work force. Nonprofits were slower to recover from the pandemic than for-profit organizations, but by 2022 they employed 277,500 more people than they did in 2017. Nonprofit wages also rose during that period, with the average nonprofit employee earning $14,728 more in 2022 than in 2017. The average annual wages for workers were nearly $68,400, or 27.4 percent higher than 2017.
About 35 states and the U.S. Virgin Islands added thousands of nonprofit jobs during that period, while another 17 states, as well as Washington D.C. and Puerto Rico, saw their nonprofit work force numbers decline. Iowa had the greatest drop, with 8,687 jobs, or 6.2 percent of its nonprofit work force lost.
By 2022, there were more than 12.8 million people employed by nonprofits, accounting for 9.9 percent of the total private work force, and the sector was the third-largest non-government employer. The share of nonprofit employees exceeded the national average in several regions, including Northeastern and Mid-Atlantic states and territories. In Vermont, the nonprofit sector accounted for nearly 20 percent of the private work force. It was 25 percent in Washington, D.C. The average was also high in Midwestern states such as Ohio and Illinois, the data found.
The data doesn’t explain how nonprofits added back jobs following the pandemic, according to Alan J. Abramson, director of George Mason’s Center on Nonprofits, Philanthropy, and Social Enterprise and an author of the analysis. But it’s obvious that government support such as Paycheck Protection Program (PPP) loans and emergency funding played a role, he said. Those supports don’t appear to be options as the Trump administration has cut funding for nonprofit work related to DEI climate mitigation, slashed funds for public assistance programs like Medicaid and taken other actions that could disproportionately impact low-income groups that rely on nonprofits, Abramson said.
“During the pandemic, nonprofits were helped by what the government was doing. Now it seems like almost the opposite,” he said, adding: “They are being targeted.”
Over the past six months, nonprofit-dense areas like the District of Columbia are among those that have been most affected by federal work force reductions made by the Trump administration, resulting in private job losses from reduced government contracts. Food banks in the District and throughout the country are bracing for increased demand for services amid ongoing budget cuts. And the nonprofit sector as a whole could struggle to hold on to workers as the administration continues to slash grants for groups supporting causes it ideologically opposes. President Trump also signed legislation on July 4 that would make severe cuts to Medicaid and food-assistance programs, potentially adding more financial strain on nonprofits that rely on those benefits.
The effects of these policy changes could vary by region and cause. Health care, social assistance, and religious, grant making and civic organizations — among the fields with the highest shares of nonprofit workers — could see significant impacts from funding cuts.
Yet it will be difficult to track those impacts in real time, Abramson said. The next batch of nonprofit employment data from the Bureau of Labor Statistics will cover 2023 to 2028. The once-every-five-year data release is much too infrequent to get a sense of how policy decisions made now are affecting the nonprofit sector and the communities that rely on it, Abramson said.
“To some extent, we are flying in the dark when we don’t have timely data. I think it would help us to understand what’s going on, the depth of the problems, and which fields are being hit hardest.”
