Over the past couple years I have had the privilege of teaching a social science course to undergraduates in Milwaukee. Every semester I ask soon-to-be graduates about their job search, and more often than not I hear about interviews and placements in the non-profit sector. While social science students are likely more drawn to the sector than business or science majors, there is good evidence that non-profits have weathered the economic downturn better than the private and government sectors, particular when it comes to job growth.
Data from the National Center for Charitable Statistics indicate over 13,000 Wisconsin non-profit charitable organizations with combined revenues of $33,983,676,906 filed 990 tax forms this year. Though the number of non-profits in Wisconsin is down slightly from last year, total revenue in the sector is up. Indeed, total revenue in the sector has been increasing annually for years.
More interesting is a recent report from the Johns Hopkins’ Non-Profit Data Project showing the number of non-profit jobs in Wisconsin increased by 2.1% between 2007 and 2009. During the same timeframe the number of private sector jobs in Wisconsin decreased by 3.7%.
There are any number of possible reasons non-profits have fared better than the private sector in recent years. One may be an increased need for organizations that provide social services during difficult economic times. Another may the need to fill the gap in services caused by cuts to government. Or, perhaps, lower starting salaries and the absence of a fiscal profit motive give non-profit employers a competitive advantage in a down economy.
Whatever the reason for their relative stability in the current downturn, non-profits, which in Wisconsin employ 12.5% of the non-government workforce, should be part of the state’s long-term jobs strategy.
Unfortunately, the tax-exempt status enjoyed by non-profit organizations in exchange for providing a public benefit is becoming increasingly politicized. The basic critique is that some non-profit corporations, particularly those involved with religion and public policy, may not be holding up their end of the bargain.
I will leave the debate over which public charities are worthy of tax-exempt status to the IRS, however I do want to point out that taking funds out of the non-profit sector through the removal of public support seems antithetical to the goal of job growth. Right now, there is evidence that it is the one sector in Wisconsin steadily creating jobs.
WPRI polling from last year found the majority of Wisconsinites think jobs/economy is the most important issue facing the state. As state policymakers move forward to address this issue, they would be wise to include the non-profit sector as a key component of any plan for job creation.