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Nonprofit education employment and wages grow in Indiana, IU report finds

May 30, 2012
Bloomington, Indiana -- Research also highlighted in IU this week

As the school year winds down, a new report from Indiana University makes clear that employment in Indiana education is growing, but not where one might expect. Jobs and pay scales are increasing quickly in nonprofit schools and colleges while employment and average salaries in government-run schools and colleges are inching up or even decreasing.

"Nonprofits are a significant force in the state's economy," the report's authors conclude. "They constitute a major and growing portion of all employment in education and play an important role in training future and current workers and supporting innovation and entrepreneurship."

Image of Kirsten Gronbjerg"Indiana Nonprofit Employment: Trends in Education, 1995-2009" is a joint project of Indiana University's School of Public and Environmental Affairs, the Indiana Business Research Center at IU's Kelley School of Business, the Center on Philanthropy at Indiana University and the Johns Hopkins Center for Civil Society Studies. Kirsten Grønbjerg, the Efroymson Chair in Philanthropy at the Center on Philanthropy and a professor at SPEA, is the project director and lead author. Co-authors are IU doctoral student Kellie McGiverin-Bohan and master's students Kristen Dmytryk, Katherine Gagnon and Katherine Novakoski.

The researchers used employment statistics provided by nonprofit institutions ranging from the University of Notre Dame to tiny elementary schools serving only a handful of students. Those numbers were compared with corresponding figures provided by traditional government-run schools including Indiana University and public high schools, middle schools and elementary schools. The researchers also included statistics from the much smaller group of for-profit educational institutions, but the focus of the report is on nonprofit institutions.

"Nonprofit employment in education has grown consistently despite the Great Recession," Grønbjerg said. "Much of this growth occurred in colleges as enrollment increased."

Nonprofit employment at Indiana colleges and universities was up 43 percent over the 15 years studied, while employment at public universities such as IU and Purdue was up by 23 percent. Average annual wages, adjusted for inflation, grew 16 percent in nonprofit colleges and universities and only 5 percent at the public institutions.

The difference in salary increases became even more stark when Grønbjerg's group compared nonprofit and government elementary and secondary schools. Nonprofit pay went up 20 percent, adjusted for inflation. Average wages in public schools dropped 8 percent. As a result, the wage gap between public and nonprofit schools has diminished rapidly. The average government educator took home $37,400 in 2009, while his or her nonprofit counterpart pocketed $35,900, a difference of $1,500, down from $8,000 in 1995.

Also, employment in nonprofit elementary and secondary schools grew by 58 percent, possibly because of the expansion of private and charter schools in Indiana. Employment increased by 24 percent in public elementary and secondary schools.

While the report reveals largely positive trends for nonprofit education in Indiana, there are warning signs.

"With the ongoing economic impact from the recession, private institutions might suffer from 'middle-class melt,' as students may opt for a lower-price public university degree rather than pay tuition at a private school," Grønbjerg said. There is also growing competition from for-profit schools such as ITT Technical Institute and DeVry University.

But the bottom line in the report is that education continues to be a growth industry in Indiana despite the recession. About 9 percent of Indiana employees work in the education industry, up from 7 percent in 1995.

The researchers pointed out that current information collected as part of state and federal reporting requirements does not directly identify nonprofit employers, regardless of industry. As a result, they note, "it is impossible to know how many people Indiana nonprofits actually employ, but it is almost certainly significantly higher than we can document in this and other reports in the series." A minor change in reporting formats to flag nonprofit employers directly would allow for much more complete and accurate reporting.

The report is the fifth nonprofit employment report in the Indiana Nonprofits: Scope and Community Dimensions project, which Grønbjerg directs. The next will assess the impact of nonprofit employment trends in social assistance, followed by an analysis of trends in the arts, entertainment and recreation industry.

Both a summary and the complete report are available online. For more information or to speak with Grønbjerg, contact Jim Hanchett at the School of Public and Environmental Affairs, 812-856-5490 or jimhanch@indiana.edu, or Steve Hinnefeld at IU Communications, 812-856-3488 or slhinnef@iu.edu.

About the School of Public and Environmental Affairs

SPEA is a world leader in public and environmental affairs and is the largest school of public administration and public policy in the United States. In the 2012 "Best Graduate Schools" by U.S. News & World Report, SPEA ranks second and is the nation's highest-ranked professional graduate program in public affairs at a public institution. Four of its specialty programs are ranked in the top-five listings, including nonprofit management (ranked first). SPEA's doctoral programs in public affairs and public policy are ranked by the National Academy of Science as the best in the country.

About the Center on Philanthropy

The Center on Philanthropy at Indiana University, a part of the Indiana University School of Liberal Arts at Indiana University-Purdue University Indianapolis, is a leading academic center dedicated to increasing the understanding of philanthropy and improving its practice worldwide through research, teaching, training and public affairs programs in philanthropy, fundraising and management of nonprofit organizations.

About the Indiana Business Research Center

As part of Indiana University's Kelley School of Business, the Indiana Business Research Center provides and interprets economic and demographic data needed by businesses, government and nonprofit organizations across the state and the nation.

About the Johns Hopkins Center for Civil Society Studies

The Johns Hopkins Center for Civil Society Studies is a leading source of research and knowledge about the nonprofit sector, social investing and the tools of government. The center's research and educational programs seek to improve current understanding, analyze emerging trends and promote promising innovations in the ways that government, civil society and business can collaborate to address social and environmental challenges.