Nonprofits are in trouble right now, and it’s not why you think.
For the past few years heated political rhetoric has made some people pretty worried about the fate of the nonprofit sector. The fear is that they will starve under federal funding cuts ushered in with the 2018 budget and because of recent changes to the tax code that hardly favor our philanthropic friends.
But it’s not time to add another pledge drive to the calendar just yet. At least not according to ZipRecruiter data. Along with nearly every other industry in our thriving economy, nonprofits are growing. Nonprofit jobs posted to ZipRecruiter.com increased 11% month over month in September and 169% year-to-date, far outpacing growth in both the technology and business sectors during the same period.
In the Northeast, where most nonprofit jobs are located according to both ZipRecruiter data and the Bureau of Labor Statistics (BLS), nonprofit jobs showed strong quarterly growth at the metro level as well. In Washington D.C., for example, nonprofit jobs spiked 176% in Q3 compared to the previous quarter. Openings surged in New York, Providence, and Boston as well.
So what’s the trouble?
The Workforce Says 501-See Ya
As nonprofit job openings continue to soar, the talent is disappearing.
In September, the number of applicants applying for nonprofit jobs declined 27% year-to-date. September also had the fewest number of nonprofit applicants all year.
To put this in perspective, in January there were four applicants chasing every nonprofit job posted to ZipRecruiter.com. By September, given the explosive growth in openings and precipitous decline in applicants, there was one opening for every applicant.
The situation is even more extreme in the metros with the highest concentration of nonprofit jobs. As of September, nonprofit openings outpaced applicants in more than 30 metros, including New York, Boston, San Diego, and Washington D.C.
In D.C., the nonprofit mecca of the U.S., there were nine openings for every applicant in September, continuing a labor shortage that has persisted since June. Mirroring the industry-wide trend, the ratio of jobs to applicants is so high because of the evaporating talent. While the number of openings remained steady from August to September, applicants declined 65%.
Hopefully They’re Not Moving for the Money
One possible explanation for the talent exodus is that nonprofits have a reputation for not paying very well. It doesn’t help that fundraising—which is the most mentioned skill of all time in nonprofit job postings on ZipRecruiter—is also highly valued by employers in the business services and technology industries, which have a reputation for paying well.
But the notion that you should only go into nonprofit work if you value meaning over money may be unfounded. A 2016 study conducted by the BLS showed nonprofit workers actually earn a pay premium compared to their for-profit counterparts. It was found that in 2014 (the latest data available), employees at nonprofits earned an average total compensation (pay and benefits) of $36.62 per hour compared to for-profit workers whose total compensation averaged $28.76 an hour.
Of course, the study uses data from four years ago and makes a point of highlighting the challenges of accurately distinguishing between nonprofit and for-profit entities. But with an average premium of $10 an hour, even according to four-year old data and a significant margin of error, it’s clear that a move to for-profit enterprise does not necessarily mean a bigger paycheck.