Indiana nonprofit social assistance agencies are feeling the effects of the Great Recession and the increased competition from for-profit firms, a new report from Indiana University shows.
Employment in Indiana’s social assistance industry grew almost every year from 1995 to 2009, even during recessions in the early 2000s and the Great Recession that began in 2007. This growth, however, can be attributed more to growth in the for-profit sector than to increases in nonprofit employment.
“Indiana Nonprofit Employment: Historical Trends in Social Assistance, 1995-2009” is a joint project of Indiana University’s School of Public and Environmental Affairs, the Indiana Business Research Center at IU’s Kelley School of Business, the Center on Philanthropy at Indiana University and the Johns Hopkins Center for Civil Society Studies.
The data show that nonprofit employment in social assistance grew by about 44 percent over the 1995-2009 period, and for most of the period, nonprofits accounted for about 70 percent of total industry employment. However, beginning in 2004, nonprofit employment growth stopped and the nonprofit share of total industry employment decreased to 62 percent by 2009.
By contrast, for-profit employment grew every year, especially after 2006, and more than doubled over the 1995-2009 period. By 2009, for-profit establishments accounted for 38 percent of private-sector employees and 33 percent of private-sector payroll in social assistance. Government agencies accounted for less than 1 percent of direct social assistance employment.
Overall, this research confirms the important role of the nonprofit sector in providing social services for the well-being of residents of Indiana. Social assistance employment accounted for about 11 percent of all nonprofit employment statewide from 1995 to 2009 and was the second-fastest-growing major nonprofit industry, after health care services. However, the increasing competition from the for-profit sector may require nonprofits to adapt to meet new challenges.