The Morning Economic Report
5:30 am
Thu March 20, 2014

Nonprofits - 3/20/14

For a variety of reasons ranging from tax considerations to emerging social challenges, the role of nonprofits in the U.S. economy continues to expand.  According to the most recent figures compiled by the Urban Institute, between 2001 and 2011, the number of nonprofits operating in the U.S. expanded by 25 percent while the number of for profit business rose by just one half of 1 percent. 

While there are still considerably more businesses than nonprofits, about 4 times as many, nonprofits are gaining market share.  Nonprofits have outpaced businesses in terms of their percentage pace of hiring, growth in wages paid and contribution to GDP.  By 2010, roughly 1.6 million nonprofits employed 10 percent of the domestic workforce and accounted for 6 percent of economic output.  While many nonprofits are charities engaged in fulfilling various social missions, many are also high-powered global enterprises in including Harvard and Johns Hopkins. 

As pointed out by the New York Times, some nonprofits are closely associated with very lucrative private enterprises, such as the National Football League.  As demand for health services expands and as the nation continues to wrestle with the needs of poorer Americans, nonprofits will remain at the vanguard of economic expansion.