Nonprofits are found to add to job market
While other areas of the economy have shrunk in Massachusetts, nonprofit organizations added tens of thousands of new jobs, outpacing all major sectors to become one of the leading sources of new, middle-class employment in the state, according to a new report.
The nonprofit workforce grew by 8.6 percent between 2000 and 2003, beating overall employment, which fell by 4.1 percent in the period, according to the Massachusetts Institute for a New Commonwealth. Employees for nonprofit groups in Massachusetts now outnumber those in manufacturing, retail, finance, and the public sector.
Economists suggest that elderly people seeking healthcare, workers trying to get new skills in a slow economy, and more people in need of child care, food, and other necessities, are creating additional demand for staff at nonprofits.
The study found that workers for nonprofits, contrary to an image of being young and underpaid, tend to be older than those in for-profit enterprises, that they make comparable wages, and that their rates of home ownership are almost equivalent.
According to the Massachusetts Insitutute for a New Commonwealth, a research group whose goal is to expand the middle class, which produced the report, 420,671 people, or 13 percent of the state workforce, are now employed by nonprofits, nearly double the national average of 6.9 percent.
''In some respects, the whole nonprofit sector is one of our best-kept secrets in the Commonwealth," said Robert M. Hollister, dean of the University College of Citizenship and Public Service at Tufts, which was a partner in the study. ''When one looks carefully at the scale and impact, it's a much more significant player in the economy than many people understand."
Set for release tomorrow, the study is the first detailed picture of the nonprofit world in Massachusetts. While some hail the findings as evidence of the strength of the nonprofit sector, others worry that it signals a troubling trend -- that services once provided by government are being shifted to nonprofit agencies.
Randy Albelda, an economist at the University of Massachusetts-Boston, noted that Governor Mitt Romney recently boasted to a Utah audience that Massachusetts has cut more state and city workers than any other state.
''What we may be doing is pushing off what was unionized, state work into the nonprofit sector," Albelda said, adding that nonprofits in many cases tend to offer skimpier health, pension, and sick-day benefits. ''We may be no better off in that sense and workers may be worse off," she said.
The report followed the acquisition of several Massachusetts firms by bigger players, reshaping the regional economy.
While Massachusetts lost 132,823 jobs between 2000 and 2003, nonprofits hired 33,325 workers, becoming the only sector to add employees, the study said. Only in North Dakota, Washington, D.C., and Vermont are there higher percentages of workers in the nonprofit sector.
''What you're picking up is the fact that this sector of the economy remains recession-proof," said Andrew M. Sum, director of the Center for Labor Market Studies at Northeastern University.
''That's the good side," Sum said. ''The downside is it's not going to let you have the kind of job growth you need for really long-term employment, particularly for workers that don't have college degrees."
The study found that the income gap separating nonprofit workers from others had narrowed by half since 1990.
Median pay for a nonprofit employee in Massachusetts is now $30,700, just slightly less than the $31,600 median paid to workers in the for-profit and public sectors, the report said.
Nonprofit workers also are paid median household incomes of $68,800, compared with the $69,900 median for workers statewide, the study found.
About 64 percent of nonprofit workers own homes, up from 58 percent in 1990, lagging just behind the 68 percent rate for the workforce at large.
''The data suggest to college graduates and job seekers that they can enjoy a successful career in the nonprofit world, which may seem like news to some people," said Joseph F. Alinger Jr., vice president of media relations at
Nonprofits in Massachusetts have $137 billion in assets, and reported more than $65 billion in income in 2004, the study said. About 66 percent of the income and 80 percent of the assets are held by the top 1 percent of nonprofits -- universities and hospitals, primarily -- while most nonprofits, like tiny soup kitchens and shelters -- report income of less than $250,000, the study said.
Paul S. Grogan, president and chief executive officer of The Boston Foundation, which also funded the study, said he hoped it would show that nonprofits are boosting the economy, not just absorbing private grants and public funds. Other backers of the study expressed agreement.
But Albelda said the study could fuel debate about whether the state is shirking its reponsibility to provide healthcare and other basic services. ''It's part of this historic debate of who should provide these services -- should the government provide them or should the private sector provide them -- and we in Massachusetts have sort of ended up in this middle place," Albelda said.
Women make up about 66 percent of the nonprofit workforce, compared with 48 percent of workers statewide, according to the study. About 85 percent of the workers are white, which is similar to the makeup of the workforce at large.
The median age of a nonprofit worker is 41, compared with 39 for workers statewide. About 67 percent of nonprofit workers hold professional or managerial jobs, compared with 41 percent of workers statewide.
Workers are drawn to nonprofits for many reasons, not least because they often find the work meaningful.
Anna Mickelsen, 27, is a former corporate technical writer who now works for Tenacity, Inc., a nonprofit group based in Brighton that teaches children academics and tennis. ''I was looking for a more relaxed workplace in which I could feel like I was accomplishing something worthwhile," Mickelsen said.
''I feel like it's hard enough to get up and go to work every day, but it's better if you have something to look forward to," she added.
© Copyright 2006 Globe Newspaper Company.
