Nonprofit job growth outstrips rest of Massachusetts economy
BOSTON — March 7, 2005 — The nonprofit sector in Massachusetts is among the largest in the country and has experienced significantly more employment and job growth than other sectors of the state’s economy, according to a research report released today by the Massachusetts Institute for a New Commonwealth (MassINC).
Co- sponsored by the Mellon Charitable Giving Program/Alice P. Chase Trust and the Boston Foundation, in partnership with the University College of Citizenship and Public Service at Tufts University, The Massachusetts Nonprofit Sector: An Economic Profile shows that the sector’s workforce grew by 9 percent between 2000-2003, a period when overall employment saw a 4 percent decline across the state. During this time, the number of jobs in the for-profit and public sectors decreased.
Nonprofits currently employ more than 420,000 people in Massachusetts, accounting for over 13 percent of the workforce, nearly twice the national average. The Bay State ranks fourth in the nation – behind only Washington, D.C., Vermont and North Dakota – in share of nonprofit employment in the workforce. Workers in the sector now outnumber those in major Massachusetts industries such as manufacturing, retail, and finance. Moreover, nonprofits currently employ more individuals in the Commonwealth than state, federal, and local government combined.
“Among larger industrialized states, Massachusetts leads the nation in terms of nonprofit employment,” said Ian Bowles, president and CEO of MassINC. “Nonprofits have long been a critical source of civic leadership across the Commonwealth. With this report we can now see that the sector is essential to the economic vitality of the state as well.”
Data in the report indicate that Massachusetts nonprofit employment is highly concentrated, with 85 percent of workers employed in one of three industries: health care, educational services, and social services. Health care alone employs 51 percent of the state’s nonprofit workforce.
According to the research, the median income for nonprofit workers in Massachusetts is $30,700, only $900 less than the overall median income of all workers. However, the report also shows wide diversity in this sector, with some nonprofit fields – such as social services at a median wage of $22,000 – well below the sector as a whole, while other fields report significantly higher annual salaries.
“As this report clearly illustrates, nonprofits play an essential role in our region’s economy. The sector is remarkably diverse, ranging from renowned universities and hospitals to small, community-based organizations, and their high standards and innovations are venerated throughout the world,” said Paul S. Grogan, President and CEO of The Boston Foundation. “However, they also face special challenges, and they deserve the public’s recognition and support so that they can continue in their vital role. The Boston Foundation is committed to continuing to build public understanding for this essential sector.”
The Massachusetts Nonprofit Sector: An Economic Profile reveals that 57 percent of the state’s nonprofit workers are college graduates, compared with 37 percent of all workers in the Commonwealth. Similarly, more than 67 percent hold professional or managerial positions, compared with 41 percent of all workers across the state. The report also shows that Bay State nonprofits tend to be young organizations. Nearly three-quarters are less than 25 years old, and one-fifth initially filed for nonprofit status with the IRS after 2000.
“What we’re seeing is dramatic change in nonprofits themselves, and in the nature of philanthropy,” said David F. Lamere, Mellon New England chairman and CEO. “Corporate philanthropy is becoming more engaged, more mission-driven. We at Mellon believe that our support of the nonprofit sector is a vital investment in our future – the future of our community, our state, and our social well-being.”
The majority of nonprofits in the state have relatively small budgets. More than 60 percent report annual incomes under $250,000 and nearly half have incomes under $100,000. Both i ncome and assets tend to be highly concentrated in a handful of organizations; the top 1 percent report 65 percent of the state’s overall nonprofit income and hold nearly 80 percent of the sector’s $137 billion in assets.
“We need to build a new agenda in Massachusetts to strengthen the nonprofit sector,” said Robert Hollister, Dean of Tufts’ University College of Citizenship and Public Service. “Community-based organizations are the lifeblood of our state. It is our hope that this new report will shine a light on the vitality of these critical organizations.”
The Massachusetts Nonprofit Sector: An Economic Profile is now available online at www.massinc.org. It includes breakout data by town, industry, and demographics along with supporting graphs and maps.
MassINC (The Massachusetts Institute for a New Commonwealth) is a nonpartisan, evidence-based organization. Its mission is to develop a public agenda for Massachusetts that promotes the growth and vitality of the middle class. Its governing philosophy is rooted in the ideals embodied in the American Dream: equality of opportunity, personal responsibility and a strong commonwealth.
About Mellon New England:
Mellon New England and its nearly 2,500 employees represent the Boston-based businesses of Mellon Financial Corporation. Through its Charitable Giving Program, Mellon New England plays an active role making our communities better places to live and work. Since 1997, the program has invested more than $20 million in support of over 200 Boston-area community groups.
The Boston Foundation, one of the nation’s oldest and largest community foundations, has an endowment of almost $650 million, made grants of $51 million to nonprofit organizations, and received gifts of $41 million last year. The Boston Foundation is made up of 750 separate charitable funds, which have been established by donors either for the general benefit of the community or for special purposes. The Boston Foundation also serves as a civic leader, convener, and sponsor of special initiatives designed to build community. For more information about the Boston Foundation and its grant making, visit www.tbf.org, or call 617-338-1700.
About the University College of Citizenship and Public Service at Tufts University:
The University College of Citizenship and Public Service at Tufts University works with faculty, students, staff and alumni in each of Tufts’ eight schools to infuse the skills and competencies of Active Citizenship throughout Tufts’ curriculum and activities. The mission of the University College is to support the whole University in producing committed public citizens and leaders who will take an active role in addressing the challenges of communities throughout their lifetimes, whatever professions they may choose. This uniquely comprehensive, university-wide civic education initiative operates student programs, faculty programs, alumni programs, and community partnerships.