Why nonprofits matter - Part 4

We provide good jobs and contribute to the economy.

The facts that nonprofit are major employers and contribute significantly to our economy are often not recognized. The gross value added by nonprofits contributes 5.7% of the US Gross Domestic Product. Nonprofits employ 10% of the private workforce, providing over 12.7 million US jobs. There are more nonprofit jobs than manufacturing jobs nationally!

We leverage an amazing amount of volunteer labor. In 2022, nonprofit volunteers in the US worked nearly 5 billion hours, contributing over $167 billion of economic value. This is work that would need to be paid for if volunteers didn’t coach little league, organize scouts, hang art shows, tutor, care for elders, distribute food, provide pro bono legal representation, and so much more.

Many people believe that nonprofit jobs are not good jobs. There is a lot to talk about on this complex issue, and I agree that we need to push for higher compensation for nonprofit workers, especially frontline workers. However, it is also important to affirm that we are providing many good jobs. Many may be surprised to hear that we are largely on par with the private sector, if not the public sector. The Nonprofit Employment Data Project has documented that in 2022 (the most recent year available), nonprofit average pay across all fields was 96.7% of for-profit average pay. In several significant fields, nonprofits pay more than their for-profit counterparts: 56% more in social assistance, 50% more in education, and 9% more in healthcare. Nonprofit wage growth kept pace with for-profit wage growth between 2017-2022.

Overall, the nonprofit sector contributes a lot to the economy and should not be taken for granted. And rest assured, we’ll unpack the issues with nonprofit wages and benefits in future posts.