Hopkins Study: Nonprofit Job Growth in Maryland Defies Recession

Despite the recession, nonprofit employment in Maryland increased by 2.7% in 2008, according to a new report from The Johns Hopkins Center for Civil Society Studies. By contrast, for-profit employment in Maryland decreased by 3.3% during this same period.

All told, Maryland's nonprofit workforce grew to 256,618 jobs by the end of 2008. This represented 10.1% of all jobs in Maryland and 12.5% of total private-sector jobs in the state, which is well above the United States average.

This workforce makes Maryland's nonprofit sector the second largest employer among Maryland industries, behind only retail. Reflecting this fact, Maryland nonprofit organizations pumped more than $11.5 billion in wages into the Maryland economy in 2008, or more than 9% of the state's total payrolls. These wages translated into an estimated $635 million of personal income tax revenue for Maryland's state and local governments and nearly $1.6 billion in federal tax revenues.

Nonprofit job growth was especially robust in the professional and scientific services field, which grew by 5.8% during 2008. While private nonprofit hospitals experienced slightly lower than average job growth, they still added 1,208 jobs during this period, or about 20% of the state's nonprofit job growth.

The new data indicate that nonprofits in Maryland seem to be confirming an earlier finding by Hopkins researchers about national nonprofit performance in previous recessions: that nonprofit organizations are a counter-cyclical force in the economy, actually adding workers in times of economic downturn.

During the two previous U.S. recessions (1990-91 and 2001-02), nonprofit employment nationally increased by an average of 2.4%, while for-profit employment declined by 2.2%. The study authors attribute this trend in part to the fact many nonprofits receive substantial portions of their income from public sector programs such as Medicaid and Medicare, which are designed to buffer citizens from economic downturns.

"That nonprofit employment in Maryland continued to rise in the face of the most severe recession since the Great Depression is a testament to the resilience and determination of Maryland nonprofit leaders and those who support them in the public and private sectors," said Lester M. Salamon, study author and director of the Johns Hopkins Center for Civil Society Studies. "But this accomplishment, impressive though it is, still left many needs unmet and many organizations under severe strain."

"This report shows that nonprofits not only strengthen communities across the state through the services they provide, but also strengthen the economy through increased employment, wages and general commerce," said Darryl A. Jones, Sr., CEO of Maryland Nonprofits, the state's nonprofit association. "We are concerned about the sector's continued ability to meet rising demands as the recession drags on and state fiscal problems deepen, and will watch nonprofit employment numbers beyond the conclusion of 2008 to monitor the effects of the recession in 2009."