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Indiana Nonprofit Employment: 2007 Report

Nonprofit Employment Report #3
September 2007
Kirsten A. Grønbjerg, Project Director
Andrea Lewis and Pauline Campbell

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 or the full report. Note: the full report is a large file (2.3 MB) and you will need a free copy of Adobe Reader to read the documents.

Introduction

Nonprofit organizations continue to make significant contributions to the quality of life for Indiana citizens by offering healthcare, education, job training, access to arts and culture, and opportunities for democratic participation. They are also a major force in the state's economy and in the economic health of all the state's regions.

This 2007 report presents new information on the size, composition, and distribution of paid employment in the private nonprofit sector in Indiana for the 2001-2005 period, and updates Report #2, which presented similar data for the 2001 to 2003 period. It is part of a larger project on Indiana Nonprofits: Scope and Community Dimensions, currently underway at Indiana University, designed to provide solid, baseline information about the Indiana nonprofit sector.

Key Findings

Major Updates from 2005 Report

  • Nonprofit employment increased by more than 2 percent between 2003 and 2005, while for-profit employment increased by just over 2 percent and government employment by less than 1 percent. Since 2001, nonprofit employment increased by 5 percent and government employment by about 3 percent, while for-profit employment was down about 1 percent.
  • The gap between nonprofit and for-profit payrolls narrowed since our previous report, as did that between nonprofit and government payrolls. Between 2001 and 2003 total nonprofit payrolls increased by more than 10 percent, while for-profit payrolls increased by just over 8 percent and government payrolls by nearly 7 percent. From 2001 to 2005, nonprofit payroll was up 22 percent, while government and for-profit payrolls were up respectively 13 and 10 percent.
  • The gap between nonprofit and for-profit average weekly wages decreased by $11 over the 2003-2005 period, and that between nonprofit and government weekly wages decreased by $12. Over the entire 2001 to 2005 period, the gap between nonprofit and for-profit average weekly wages declined by $14 and that between nonprofit and government weekly wages declined by $20.

Other Key Findings

  • The nonprofit sector continues to be a major economic force in Indiana, accounting for nearly 1 out of every 12 paid workers--equal to the number of employees in the state's entire accommodation and food industry and about 50 percent more than those employed in the state's construction industry.
  • The 235,000 nonprofit employees in Indiana earned about $7.4 billion in wages in 2005.
  • About half (51 percent) of nonprofit employment in the state was in health services, another 13 percent was in education, and 12 percent each was in membership associations and social assistance.
  • Most (88 percent) nonprofit employees worked for charities, although only 56 percent of nonprofit establishments were charities.
  • The Indiana nonprofit sector grew faster than both the for-profit and government sectors between 2003 and 2005.
  • The growth share and rate of growth in nonprofit employment were concentrated in health and educational services, especially between 2004 and 2005.
  • Overall payroll for nonprofit employees in Indiana also increased faster than that for employees in for-profit or government organizations, although average weekly wages increased at a slightly slower rate.
  • On average, weekly wages for nonprofit employees were 13 percent lower than those of for-profit workers and 11 percent lower than those of government workers . However, non-profit weekly wages were generally similar to for-profit wages in industries where nonprofit employment is concentrated.
  • Nonprofit employment grew steadily each quarter between 2003 and 2005, while there were notable seasonal fluctuations in for-profit and government employment.
  • The majority (80 percent) of nonprofit employment in Indiana was concentrated in fourteen metropolitan areas, with 28 percent in the Indianapolis area. Nonprofit share of total employment, average weekly wages, and employment rates of growth varied significantly among these metropolitan areas (see Part II).
  • Among Indiana's 11 Economic Growth Regions (EGRs), EGR 5 (Central Indiana) had the largest share of the state's nonprofit employment. Nonprofit share of total employment, average weekly wages, and rates of growth in employment and payroll varied considerably among the different regions (see Part III for a summary and separate chapters on each EGR, includes also overall conclusion to report).

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. 

Appendices

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

  • Appendix A: The ES-202 Unemployment Insurance Labor Market Information Program 
  • Appendix B: Nonprofit Employment in Indiana, by Metropolitan Statistical Area, 2005
  • Appendix C: Nonprofit Employment in Indiana, by Economic Growth Region, 2005
  • Appendix D: Nonprofit Employment in Indiana, by County, 2005
  • Appendix E: Distribution of Nonprofit and Charitable Employment in Indiana, by Industry, 2005
  • Appendix F: Nonprofit Employment and Wages for Select Industries in Indiana, 2005
  • Appendix G: For-profit Employment and Wages for Select Industries in Indiana, 2005
  • Appendix H: Government Employment and Wages for Select Industries in Indiana, 2005
  • Appendix I: Distribution of Indiana Nonprofit Employment by IRS Reporting Status, 2001-2005

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 also thank Kerry S. Brock for her help in preparing the basic framework for our analysis. Finally, we thank members of the Advisory Board for the Indiana Nonprofits: Scope and Community Dimensions project for helpful comments and suggestions. We are particularly grateful to Thomas P. Miller and his staff (Justin Heet and Jonathan Faris), Tom Rugh of the Indiana Association of United Ways, and Bob Cross of United Way of Central Indiana for helpful comments on our analysis plan.