Nonprofits Account for Nearly 18% of Total Mass. Employment

July 11, 2019 — Nonprofits accounted for nearly 18% of all jobs in Massachusetts and $36.1 billion in wages in 2017, yielding the most current picture of the nonprofit sector's economic impact in Massachusetts, the state's nonprofit trade association, the Massachusetts Nonprofit Network, reported yesterday.

Since 2013, the nonprofit sector added 41,763 jobs, yielding a total of 551,117 jobs in 2017, according to recently-released data from the U.S. Bureau of Labor Statistics (BLS).

Nonprofit jobs as a share of total employment in Massachusetts has held steady since 2013.

"The nonprofit sector's economic impact is not only large, it's growing at a rapid clip," said Jim Klocke, chief executive officer of the Massachusetts Nonprofit Network (MNN). "The roles of nonprofits as economic engines and as service providers are both crucial to protect."

According to the new BLS numbers, the Massachusetts nonprofit sector grew by 8.2% from 2013 through 2017, slightly trailing the 8.3% growth of all other job growth during that period.

While nonprofit employment in Massachusetts grew over the five year period ending 2017, wages paid to nonprofit employees lost ground.

Wages per nonprofit employee in Massachusetts in 2017, according to BLS, on average earned 92.3% of the average wages earned by all those employed in the state, or $65,659 vs. $70,657 average for all those employed in the state.

In 2013, Massachusetts nonprofit employees earned 95.0% of the average wages earned by all employed in the state, or $59,180 vs. $62,311.

Average wages for nonprofit Massachusetts employees grew 11.0% from 2013 through 2017 vs. 13.4% for all employees in the state.

Citing a report last month which showed that individual donations to American charities dropped by $3.2 billion nationwide in 2018, Klocke said, "The nationwide drop in charitable giving resulting from the change in the federal tax code is a concerning trend."

To further bolster the state's nonprofit sector, MNN in its newly published Commonwealth Insights report urged three policy recommendations:
  • Preserve and grow charitable giving, including the creation of a federal universal tax deduction and the restoration of the Massachusetts state charitable tax deduction;

  • Streamline state-level reporting requirements to remove duplication and reduce costs associated with reporting;

  • Optimize employer policies so that they work for nonprofits as well as for-profits.
The report noted that the nonprofit sector plays "a key role in solving the challenges associated with a tight job market," citing recent surveys that show that "the sector boasts high levels of job satisfaction, a key factor in employee recruitment and retention."

In addition, according to the report, many nonprofits help train and connect employees and employers.