Nonprofits: The Rocky Balboa of the U.S. economy?

Even during the recent recession, the U.S. nonprofit sector has shown its resilience. Consider: During the 21st century’s first decade the number of not-for-profits grew 25%, surpassing both the government and private sectors. During the same period, the sector grew jobs at 2.1% while the for-profit sector lost jobs at 0.06%. In fact, nonprofits are now the nation’s third largest employer among private industries, nearly tying with manufacturing and lagging only slightly behind retail. In 2010, nonprofits added $779 billion to the U.S. gross domestic product.

So points out an article recently posted on Forbes magazine’s blog. Authors Nathaniel Calhoun and Darlene Damm, both with organizations in the social sector, attribute nonprofits’ growth to certain behaviors. Nonprofits, they say, tend to:

Be more resistant to outsourcing and automation. Whereas the U.S. manufacturing sector has outsourced an estimated 30% to 40% of its jobs, the nonprofit sector is relatively slow in following this trend. And replacing jobs with automation isn’t nearly as big of a factor for nonprofits as it is for some, such as transport, manufacturing and white collar specialties such as legal research and accounting.

Take advantage of new technologies that lower costs. Many nonprofits have latched on to technologies that make fundraising easier, such as social media, crowdfunding (raising small amounts of money from a large number of people, typically online), and open sourcing (employing software that can be freely used, changed and shared). More fundraising typically equates to more funds.

Align with the interests and values of the day. The authors point out that an estimated 25% of the population engages in volunteering on an annual basis, and the number of for-profit social enterprises has rapidly increased over the last decade. And billionaires, such as Warren Buffet and Bill Gates, have publicly committed to giving most of their money away to charity.

“Whom you know” remains a top nonprofit hiring tool

When it comes to recruiting staff, participants in a recent nationwide survey reported that their nonprofits have neither a formal recruitment strategy in place (52%) nor a formal recruitment budget (67%). So, how do these organizations recruit talent? A total of 91% of the 362 participants in the 2015 Nonprofit Employment Practices Survey conducted by Nonprofit HR reported “using a network of friends and colleagues as one of their primary recruiting sources.”

© 2015