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School of Public and Environmental Affairs

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IU Center on Philanthropy

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Last modified: Monday, June 6, 2005

Indiana employment is growing fastest in nonprofit sector

Wage gap narrows between nonprofit and for-profit industries, study finds

NOTE: Detailed data and graphics are available upon request, including selected information by county, region, type of nonprofit and industry comparisons. The new report is available on the project Web site at

INDIANAPOLIS -- Nonprofit employment in Indiana outpaced government jobs and sagging employment in the for-profit sector between 2000 and 2003, according to a new report released today (June 6) by the Indiana University School of Public and Environmental Affairs and the Center on Philanthropy at IU.

This is the second major study ever to assess nonprofit employment in Indiana. The study found that nonprofit employment increased by over 5 percent between 2000 and 2003, while for-profit employment decreased by almost 6 percent and government employment increased by nearly 3 percent during the same period.

"It's likely that many nonprofit jobs are more recession-proof than those in manufacturing and retail services, where most of the private sector jobs are concentrated," said Kirsten Grønbjerg, project director for the study. "For instance, if you're watching your budget you may put off buying a washing machine or new clothes, but you may not be able to do that when it comes to obtaining health care or social services.

"We also know from our survey of Indiana nonprofits that substantial proportions reported an increase in demand for services, while revenues frequently trailed expenditures, suggesting that nonprofits were trying to maintain services in order to meet increased demands, even though some, at least, were squeezed by declining or stagnating revenues," Grønbjerg added.

Grønbjerg holds the Efroymson Chair in Philanthropy at the Center on Philanthropy at Indiana University, headquartered in the IU School of Liberal Arts at Indiana University-Purdue University Indianapolis, and is a professor in nonprofit management in the School of Public and Environmental Affairs at IU Bloomington.

A joint product of the Center on Philanthropy, SPEA and the Johns Hopkins Employment Data Project, the report provides new information on changes in nonprofit employment through 2003.

Additional key findings include:

-- The nonprofit sector continues to be a major economic force in Indiana, accounting for nearly one out of every 12 paid workers -- more than are employed in the state's construction industry and more than are employed in Indiana by state and federal government combined.

-- The 228,000 nonprofit employees in Indiana earned about $6.6 billion in wages in 2003.

-- Nonprofit employment is not restricted to any one region of Indiana, but is distributed broadly throughout the state. However, there are notable regional differences in the nonprofit share of total employment, ranging from a high of over 17 percent in St. Joseph's County (South Bend) to a low of less than 2 percent in some of the state's smaller counties.

-- About half (52 percent) of Indiana's nonprofit employment is in health services, another 13 percent is in education and 12 percent is in social assistance.

-- Most (88 percent) nonprofit employees work for charities, although only 58 percent of nonprofit employers are charities.

-- Nonprofit weekly wages are similar to for-profit wages in industries where nonprofit employment is concentrated.

-- The gap between nonprofit and for-profit payrolls narrowed between 2000 and 2003, as did the gap between nonprofit and government payrolls. Total nonprofit payrolls increased 17 percent, while for-profit payrolls increased 1 percent and government payrolls increased 10 percent.

-- The gap between nonprofit and for-profit average weekly wages decreased by $11 over the 2000-03 period and the gap between nonprofit and government weekly wages decreased by $13.

The study focused on the more than 5,000 nonprofits registered as tax-exempt entities under Section 501(c) of the Internal Revenue Code that participate in the state's quarterly employment survey. They include private, not-for-profit hospitals, day-care centers, universities, homeless shelters, museums, theaters, trade associations, and civic and membership groups.

The study draws on data generated by the Indiana Department of Workforce Development that were prepared by the Indiana Business Research Center at IU's Kelley School of Business and analyzed by Grønbjerg and a team of researchers.

The employment report is part of the ongoing Indiana Nonprofit Sector: Scope and Community Dimensions project begun in 1999 to examine the size and composition of the Indiana nonprofit sector and the critical role Indiana nonprofits play in communities.

The project is funded through support from the Efroymson Chair in Philanthropy by the Indianapolis Foundation, an affiliate of the Central Indiana Community Foundation, and the Center on Philanthropy's Indiana Research Fund, supported in part by Lilly Endowment Inc. The new report is available on the project Web site at