BLOOMINGTON, Ind. – Employment in membership and related organizations (grantmaking, civic, professional, religious organizations) appears to be a relatively small, but stable segment of Indiana’s overall economy. According to a new Indiana University report, total employment in the industry grew 21 percent between 1995 and 2019 to reach almost 30,000 employees; total payroll increased even faster, up 60 percent (adjusted for inflation) to reach almost $900 billion in 2019.
The report, “Nonprofit Paid Employment in Membership for Indiana,” uses data from the Quarterly Census of Employment and Wages (QCEW) prepared by the Indiana Business Research Center (IBRC) and analyzed by the Indiana Nonprofits Project.
Almost all of the 30,000 employees worked for nonprofit organizations, making it the third largest nonprofit industry in Indiana, ahead of nonprofit social assistance (29,000) and nonprofit arts, entertainment and recreation (7,000), but trailing nonprofit education (40,000) and especially nonprofit health (170,000). However, as the report notes, actual employment in membership and related organizations is likely at least twice as large as what the report is able to document because of the limited reporting requirements for the religious institutions that fall under this industry.
Nonprofit membership and related organizations play key roles in other ways. They provide Hoosiers with opportunities to engage with social and political causes, promote and defend the interests of their members, support various causes through raising funds and making grants to other charities, and organize and provide religious services.
The report examines five subindustries and documents diverse trends among the five.
- Civic and social organizations – automobile clubs, parent-teacher associations, fraternal lodges, and social clubs – is the largest subindustry, accounting for more than half (54 percent) of all workers in the industry. This subindustry grew moderately over the 1995-2019 period; employment was up 26 percent, but payroll increased only 16 percent. The subindustry had the largest establishments on average (18 employees, compared to 8-11 workers on average for the other subindustries). However, it had the smallest annual average wages in 2019 ($16,000), suggesting it employed a fairly large number of part-time workers.
- The next largest subindustry, business, professional, labor, political and similar entities, accounted for 27 percent of those employed in the industry. This was the only subindustry to decrease over the period (down 6 percent), although payroll increased notably (up 64 percent) and average annual wages were relatively high ($47,000 in 2019).
- The remaining 20 percent of employees in the industry are distributed fairly evenly among grantmaking services, social advocacy organizations, and the relatively few religious organizations included in the QCEW data. Employment in Grantmaking services increased rapidly, with employment up 81 percent and payroll up 156 percent, and average annual wages were $65,000 in 2019. The social advocacy industry grew notably as well, up 77 percent in total employment and 130 percent in total payroll, to reach an average annual wage of $37,000 in 2019. As noted above, the data available to the Indiana Nonprofits Project exclude most religious organizations.
“Membership establishments usually rely on revenues from membership dues, special events, earnings from various activities, and private contributions,” said Kirsten Grønbjerg, Distinguished Professor of Public Affairs at the O’Neill School and the Efroymson Chair in Philanthropy (2001-2021) at the IU Lilly Family School of Philanthropy at IUPUI. “Such private sources of funds are what allow these nonprofits to serve the needs and interest of their members, organize around social causes, collect and distribute private donations, or promote religion.”
Grønbjerg noted that other nonprofit industries, such as health, social assistance, education, and arts, entertainment and industry, have access to similar private sources of revenue, but also government funding in the form of fees (e.g., Medicare and Medicaid), contracts, grants, or other subsidies (e.g., student loans) that allow them to significantly extend their services beyond what they could do otherwise.
The data on which the report is based do not extend beyond 2019, but COVID-19 will likely have a profound impact on Indiana’s membership establishments. Grønbjerg also noted that this will likely be especially true for those with substantial in-person activities, such as civic associations, social clubs, and religious congregations. Some may have been able to pivot to online activities, as many Indiana nonprofits did in response to the Pandemic (see Indiana Nonprofits and COVID-19: Impact on Services, Finances, and Staffing). However, reduced or less intensive interactions with members may have resulted in less revenues and staff layoffs.