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Indiana Nonprofit Employment:
Trends in Arts, Entertainment, and Recreation (AER), 1995-2009

Nonprofit Employment Report #7
November 2012
Kirsten A. Grønbjerg, Project Director
Kellie L. McGiverin-Bohan, Alexandra Buck, Kristen Dmytryk, Katherine Gagnon,
and Weston Merrick with Lauren Dula and Deb Oonk

A Joint Product of the Center on Philanthropy at Indiana University, the School of Public and Environmental Affairs at Indiana University, the Indiana Business Research Center at Indiana University's Kelley School of Business, and the Johns Hopkins Center for Civil Society Studies


Click to read the press release for this study, a short summary or the full report. Note: the full report is a large file (3 MB) and you will need a free copy of Adobe Reader to read these documents.

Introduction

Nonprofit organizations make significant contributions to the quality of life for the residents of Indiana by offering access to arts and culture, social assistance, health care, education, and opportunities for civic engagement. They are also a major force in the state’s economy and in the economic health of all regions of the state.

This report presents new information on the size, composition, and distribution of paid nonprofit employment in Indiana’s arts, entertainment, and recreation (AER) industry. The seventh report in a series of statewide employment analyses, it focuses on trends in nonprofit AER employment from 1995 through 2009. Data over this time period give us insights into how recessions and economic growth periods impact private nonprofit employment in this industry. Upcoming reports in this series will analyze similar trends in health care and membership organizations.

Key Findings

Our report provides detailed analysis of major changes in nonprofit employment and wages in the AER industry from 1995 through 2009 with comparisons to corresponding trends in for-profit AER establishments. There are too few government employees to provide separate analyses for this group. Our analysis also includes trends in major AER sub-industries: amusement, gambling, and recreation; museums and historical sites; and performing arts and spectator sports.

Overall AER Employment

  • Total AER employment became a more important element in Indiana over the 1995-2009 time period and outpaced that of Indiana employment overall. While Indiana experienced an overall decrease in employment, total AER employment grew by 79 percent, and the number of AER establishments increased by 18 percent. Payroll in AER increased an impressive 121 percent—from over $560 million in 1995 to $1.24 billion in 2009 (adjusted for inflation).
  • Nonprofit employment in the arts, entertain-ment, and recreation industry grew modestly (less than 9 percent between 1995 and 2009), while for-profits experienced a 109 percent growth in employment. An increased emphasis on sports tourism in the state likely contributed to growth in both sectors, but expanded opportunities for riverboat gambling beginning in 1995 appear to have benefitted mainly for-profit employment.
  • For-profit wages in arts, entertainment, and recreation were on average 32 percent higher than nonprofit wages. The AER industry experienced a 23 percent increase in wages overall (adjusted for inflation), but remained one of the lowest paying industries in Indiana, especially among nonprofit workers. This is likely due to a large percentage of part-time and seasonal workers in this industry.
  • Employment, establishments, and payroll in AER show notable seasonal fluctuations, usually peaking in summer months. This was particularly true in non-charitable nonprofits (e.g., clubs, membership groups, etc.) and for-profit establishments. This growth could reflect increased participation in sports clubs, local arts and cultural festivals, concert series, and other seasonal recreation activities during the summer.
  • Average monthly wages for nonprofit workers in AER were lowest during the summer quarter and highest during the winter quarter. This trend potentially reflects a reliance on low-paid seasonal workers, particularly high school and college students, to meet increases in demand during the summer months.

Amusement, Gambling, and Recreation

  • Amusement, gambling, and recreation was the largest AER sub-industry and responsible for most of the increase in the total AER employment. This sub-industry accounted for 77 percent of private sector employment in AER in 2009, up from 69 percent in 1995, reflecting significant growth in for-profit employment and moderate gains in nonprofit employment. Examples of establishments in this sub-industry include the Horseshoe Southern Indiana bingo clubs and golf courses, as well as the Indiana Parks and Recreation Association, Concord Little League of Elkhart, and Indiana 4-H chapters.
  • Amusement, gambling, and recreation had the lowest average wages of all three sub-industries, with annual wages averaging $22,200 between 1995 and 2009 for all private sector workers. Among nonprofit workers, the average wage was even lower, at $18,800 (all in constant 2009 dollars).

Museums and Historical Sites

  • Between 1995 and 2009, nonprofits dominated employment in the museums and historical sites sub-industry, employing at least 95 percent of private sector employees in all years. Nonprofits in this sub-industry added employees in all but two years. With a gain of 400 nonprofit employees over the time period, museums and historical sites showed the largest absolute growth in nonprofit employment among the three sub-industries.
  • Museums and historical sites was the only AER sub-industry that had more nonprofit estab-lishments (90 percent in 2009) than for-profit establishments (10 percent in 2009). This finding echoes the national average of 90 percent nonprofit establishments in the visual arts and museums field and 95 percent in the historical sites field. The number of nonprofit establishments in Indiana grew by 56 percent, from 41 in 1995 to 64 in 2009, while for-profits actually decreased by one establishment in the same period.

Performing Arts and Spectator Sports

  • The number of nonprofit establishments in performing arts and spectator sports increased 75 percent during the time period, adding nearly 30 new establishments. However, the average size of nonprofit establishments shrank by 20 percent, from an average of 32 employees to an average of 23 employees per establishment.
  • Nonprofit wages in this sub-industry averaged $25,700 in the period from 1995 to 2009, while for-profit wages averaged nearly double that amount, at $59,400. The disparity between these two figures is perhaps surprising, as employees in this subcategory are known to alternate employment frequently between nonprofits and for-profits. However, there are notable differences between nonprofit and for-profit performing arts and spectator sports establishments. While nonprofit performing arts organizations may employ many part-time workers, the presence of highly paid executives, athletes or performers in professional sports or commercial arts skew the average for for-profits.

Methodology

The report draws on data generated by the Indiana Department of Workforce Development through surveys of Indiana workplaces carried out under the national Covered Employment and Wages (CEW) labor market information program administered by the U.S. Bureau of Labor Statistics as part of the unemployment insurance program. These data, compiled from quarterly reports submitted by employers in compliance with U.S. and Indiana law, were prepared for us by the Indiana Business Research Center at Indiana University's Kelley School of Business under a confidentiality agreement with the state.

For information about the methodology used in this report and for additional tables, please see the Appendices at the bottom of this page. Reports on nonprofit employment for other states are available at Center for Civil Society Studies at Johns Hopkins University.

Appendices

Our report includes several appendices with supplementary information. They include:

  • Appendix A: The ES-202 Unemployment Insurance Labor Market Information Program - Sources of data, scope of coverage, and data processing and cleaning.
  • Appendix B: Data Tables - Nonprofit employment and wages in AER and AER subindustries.
  • Appendix C: Project Publications and Reports

Acknowledgements

This report was prepared as part of an ongoing project from the Indiana Nonprofits: Scope and Community Dimensions project made possible by the Efroymson Fund at the Indianapolis Foundation (an affiliate of the Central Indiana Community Foundation) through its support for the Efroymson Chair in Philanthropy; the Indiana University Center on Philanthropy through its Indiana Research Fund (supported in part by Lilly Endowment Inc.) and its ongoing support for the Efroymson Chair in Philanthropy; and the School of Public and Environmental Affairs at Indiana University through its ongoing support for the Efroymson Chair in Philanthropy.

We are grateful to Carol O. Rogers, Victoria Nelson, and Jerry Conover at the Indiana Business Research Center for making the data on which this report is based available to us and for very helpful comments on the draft. We thank Kerry S. Brock for her help in preparing the basic framework for our analysis, as well as Alexandra Buck, Jacob Knight, Katherine Novakoski, and Virginia Simpson who assisted in arranging the original data. Finally, we thank members of the Advisory Board for the Indiana Nonprofits: Scope and Community Dimensions project for helpful comments and suggestions.

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