The Nonprofit 10 Percent

Mar 27, 2019 5:00 PM ET

Those of us who work for or support the nonprofit sector have always known how important it is to the nation’s health, environment, safety net, creativity and quality of life. From churches to cultural centers to food banks, schools and humanitarian organizations, the nonprofit sector feeds the nation’s soul, its heart and its body. But, it’s also critically important to the nation’s economy and job market.

According to Independent Sector, a coalition of nonprofits and foundations, there are over 1.6 million 501(c)(3) tax exempt nonprofit organizations in the United States – the third largest workforce in the country behind retail and manufacturing. Approximately 63 million Americans volunteer their time and talents with nonprofits, and they contribute over $390 billion yearly to their favorite charities and causes.

The U.S. government’s Bureau of Labor Statistics has recently released employment and wage estimates for the nation’s 501(c)(3) tax exempt nonprofit organizations for 2013-15 and 2017, and in 2017 the nonprofit sector accounted for 12.5 million jobs, which is 10.2 percent of the nation’s private sector workforce.

Additionally, the sector represents $670 billion in total annual wages, which is 9.9 percent of private sector wages, the average salary being $53,667. The Health Care and Social Assistance industry accounted for a whopping 67 percent of nonprofit employment. And, these statistics do not include the thousands of other nonprofit organizations that are not classified as 501(c)(3) under the Internal Revenue Code.

Yet, the nonprofit sector is critically understaffed, under-capitalized and overwhelmed. With continuing cutbacks in government assistance at the federal, state and local level, many nonprofits find themselves swamped with constituents in need and crushed by debt and ongoing cash flow problems.

One organization that is working to bridge these gaps is the Nonprofit Finance Fund (NFF). For the past 40 years, NFF has helped nonprofits with loans and financing to deal with funding gaps, high energy costs, inflation and lapses in government support. It also helps nonprofits manage their finances through consulting services, partnerships and knowledge-sharing. And, it works to extend opportunities in low-income communities and to remove financial obstacles for nonprofits so that they can concentrate on their charitable missions.

The nonprofit sector needs organizations like Independent Sector and the Nonprofit Finance Fund in order to fulfill its vital mission to serve communities and make a difference in the world. The 12.5 million people who work for the nonprofit sector deserve the stability and security of adequate financing, and the nation deserves a vibrant and successful charitable sector poised to help people reach their full potential.

Portions of this blog post first appeared on Forbes.

If you have a comment or question, please follow me on Twitter at @timmcclimon and start a conversation there. Thanks for reading and sharing this blog posting with friends and colleagues.

CSR Now! Is a weekly blog by Timothy J. McClimon, president of the American Express Foundation, designed to get at what's happening in corporate social responsibility today -- from the point of view of a corporate practitioner.

Rohan Ramsay
American Express
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