Recessions and Indiana Nonprofit Employment

Recessions and the Indiana Nonprofit Sector

This report focuses on the Indiana nonprofit sector and its economic health during the turbulent economic climate of the last 17 years. We compare the nonprofit sector with the for-profit and government sectors, providing insight into the relationships among these economic actors and their roles in statewide employment, payroll, and wages. Our analysis reveals key trends that differ notably among the three sectors during recession years, highlighting the importance of the nonprofit sector in the economic health of Indiana.

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Key Findings

  • In the height of the Great Recession (2008-2009) nonprofit employment grew 2 percent and payroll grew 5 percent, while for-profit employment and payroll each decreased 8 percent.

  • Nonprofit employment and payroll growth outpaced key for-profit Indiana industries during both recession periods (2001 and 2008-09). While the nonprofit sector grew, manufacturing, construction, and other major industries lost employees and payroll during the recessions.

  • The education and health care industries drove nonprofit sector growth. Nonprofit employment in education increased the most, with health care not far behind. These nonprofits increased their shares of both total employees and payroll, led by two dominant sub-industries: colleges and universities and hospitals, respectively.

  • Three smaller nonprofit industries, however, faltered in employment and payroll during the most recent recessions. Arts, entertainment, and recreation peaked in 2001, social assistance in 2004, and membership in 2006. All lost employment and payroll during the Great Recession and subsequent recovery.