Nonprofits stabilize Indiana's regional economies and employ thousands with well-paying jobs

Reports covering four regions of Indiana provide nearly two decades of data on nonprofits' impact on Hoosier communities

BLOOMINGTON, Ind. -- A collection of new reports detailing the economic impact of nonprofits in four of Indiana's economic growth regions highlights the significant influence the organizations have, according to research from the Indiana Nonprofits Project, a collaborative effort between the Indiana University Lilly Family School of Philanthropy and O'Neill School of Public and Environmental Affairs.

The reports highlight the significant economic impact that nonprofit establishments have in providing relatively well-paying jobs to tens of thousands of workers in each region: Northwest Indiana (Economic Growth Region or EGR 1, including Gary), North Central Indiana (EGR 2, including South Bend), Northwest Central Indiana (EGR 4, including Lafayette and Kokomo) and East Central Indiana (EGR 6, including Muncie and Richmond).

The wages earned by nonprofit employees benefit the regional economies when those workers buy goods and services from local businesses. Nonprofit workers also contribute to state and local government finances when they pay state income taxes, state and local sales taxes, and local property taxes. The reports are based on Quarterly Covered Employment and Wage data submitted by nearly all Indiana employers.

"Since 2000, each of these regions have faced major economic challenges as jobs in manufacturing declined significantly from 2000 to 2010, with limited recovery in the following nine years," said Kirsten Grønbjerg, director of the Indiana Nonprofits Project. "The Great Recession (2007-08) created losses also in other industries. By comparison, over the 2000-2019 period, nonprofit employment and payroll grew in all four regions, and often at faster rates than corresponding rates in the for-profit or government sectors. Clearly, the nonprofit sector played a stabilizing role in the economy of each region."

Nonprofit workers in each region play a vital role by providing community residents with key services in health care, social assistance, education, arts, culture and recreation, and more. In each of the regions, most nonprofit employees work in health care, with smaller proportions working in social assistance, education and membership associations.

The size of nonprofit establishments and average nonprofit annual wages vary considerably across these industries, though they are highest in health care and lowest in arts, entertainment and recreation. More detailed analysis shows that nonprofit establishments generally employ more workers on average than for-profit establishments in the major nonprofit industries and pay higher average annual wages.

Selected highlights from the regional reports

  • Northwest Indiana (EGR 1) Report
    • In 2019, nonprofits employed 33,000 workers in the region, with a total payroll of $1.5 billion -- about 11 percent of all paid employees and 10 percent of the total payroll in the region. In fact, nonprofit employment and payroll (adjusted for inflation) have grown considerably more than for-profit or government employment.
    • Nonprofit employment trails employment in manufacturing and retail trade in the region, but the gaps have narrowed considerably over the 2000-19 period. Nonprofit payroll falls behind only manufacturing, and the gap has similarly narrowed.
    • Most nonprofit employees, 63 percent, work in health care, with the rest fairly evenly distributed across social assistance, membership association, education and all other industries. Nonprofits are particularly important in health care and social assistance, accounting for about half of all employees in those fields.

    View the Northwest Indiana report

  • North Central Indiana (EGR 2) Report
    • Nonprofits in this region employed 38,000 workers in the region, with a total payroll of $1.9 billion, in 2019. This accounts for about 12 percent of all paid employees and 13 percent of the total payroll in the region, but 20 percent of employment and 24 percent of the payroll in St. Joseph's County -- the highest percentages among Indiana's 92 counties.
    • Nonprofit employment and payroll (adjusted for inflation) grew considerably more than for-profit or government employment during the 2000-09 period but lagged behind for-profits over the 2010-19 period.
    • Nonprofit employment trails only manufacturing in the region, and the gap has narrowed some over the 2000-19 period. Nonprofit payroll trails only manufacturing and outpaces every other major industry.
    • Most nonprofit employees, 43 percent, work in health care. But 34 percent work in education -- a much higher share than for the state as a whole at 13 percent. Nonprofit employees account for more than half of all employees in health care and social assistance. In all cases, nonprofit share of total employment and total payroll is much higher in EGR 2 than Indiana.

    View the North Central Indiana report

  • Northwest Central Indiana (EGR 4) Report
    • Nonprofits employed 16,000 workers in the region, with a total payroll of $709 million, in 2019 -- about 8 percent of all paid employees and 7 percent of the total payroll in the region.
    • Nonprofit employment and payroll (adjusted for inflation) up 39 and 92 percent, respectively, while for-profit or government employment either declined or grew very slowly.
    • While nonprofit employment trails employment in manufacturing, retail trade, and accommodation and food services in the region, the gaps have narrowed over the 2000-19 period. Nonprofit payroll trails only manufacturing, and that gap has also narrowed.
    • Most nonprofit employees, 58 percent, work in health care, with the rest fairly evenly distributed across social assistance, membership associations and all other industries (including education, and arts, entertainment and recreation). Nonprofit employees account for more than two-fifths of all health care workers and almost two-thirds of social assistance workers.

    View the Northwest Central Indiana report

  • East Central Indiana (EGR 6) Report
    • Nonprofits employed 14,000 workers in the region with a total payroll of $636 million in 2019 -- about 12 percent of all paid employees and 14 percent of the total payroll in the region.
    • Nonprofit employment and payroll (adjusted for inflation) were up respectively 18 and 54 percent, while for-profit or government employment and payroll declined.
    • Nonprofit employment trails employment in manufacturing and retail trade in the region, but the gaps have narrowed considerably over the 2000-19 period. Nonprofit payroll trails only manufacturing, and that gap has also narrowed.
    • Most nonprofit employees, 65 percent, work in health care, with most of the rest distributed across all other industries. Nonprofit employees account for almost half of all health care workers and more than two-thirds of social assistance workers in the region.

    View the East Central Indiana report

About Indiana Nonprofits Project

The Indiana Nonprofits Project is a collaborative project designed to provide solid, baseline information about the Indiana nonprofit sector in order to help community leaders develop effective and collaborative solutions to community needs and to inform public policy decisions. The full reports are available on the Indiana Nonprofits Project website. They are co-authored by the director of the project, Kirsten Grønbjerg, professor in the O'Neill School of Public and Environmental Affairs at Indiana University Bloomington, and professor of philanthropic studies at the IU Lilly Family School of Philanthropy at IUPUI; and research assistant and IU undergraduate student Anjali Bhatt.

About the Lilly Family School of Philanthropy

The Indiana University Lilly Family School of Philanthropy at IUPUI is dedicated to improving philanthropy to improve the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The school offers a comprehensive approach to philanthropy -- voluntary action for the public good -- through its academic, research and international programs, and through The Fund Raising School, Lake Institute on Faith & Giving, Mays Family Institute on Diverse Philanthropy and the Women's Philanthropy Institute.

About the O'Neill School of Public and Environmental Affairs

The O'Neill School 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 2021 "Best Graduate Public Affairs Programs" by U.S. News & World Report, the O'Neill School ranks first in the country. Four of its specialty programs are ranked in the top five, including nonprofit management, ranked first.

Contact

Mary Keck

Phone: 812-856-2148

|

Email: marykeck@iu.edu

James Boyd

O'Neill School of Public and Environmental Affairs

Phone: 812-855-0156

|

Email: joboyd@indiana.edu

Resources for media