Community Foundation Releases Nonprofit Economic Impact Reports

The Community Foundation of Southern Indiana (CFSI) has released two reports detailing the economic impact of nonprofits on the region. The Southeast Economic Growth Region (EGR 10) report includes most Indiana portions of the Louisville metropolitan region while the Clark and Floyd counties report focuses specifically on those two counties. 

The two reports indicate what the economic impact of our local nonprofits is in our region and specifically in Clark and Floyd counties as it relates to employment (trends), payroll (contributions) and overall comparisons to other industries.

The reports are based on Quarterly Covered Employment and Wage (QCEW) data submitted by virtually all Indiana employers and were commissioned by CFSI in partnership with Dr. Kirsten Grønbjerg, Director of the Indiana Nonprofits Project, Professor at the O’Neill School of Public & Environmental Affairs at Indiana University Bloomington, and Professor of Philanthropic Studies at the IU Lilly Family School of Philanthropy. 

Linda Speed, IPA board chair and president/CEO for the Community Foundation of Southern Indiana said, “The nonprofit sector plays a vital role in meeting the needs of a community not met by the market or the public sector, providing critical services while also contributing to economic conditions. While it’s easy to see how nonprofits directly impact the lives of individuals, their impact on a larger scale can often times be overlooked and we hope that these reports provide a better understanding and appreciation of the contribution of the nonprofit sector to the overall economy. The hundreds of millions of dollars earned by nonprofit employees contributes to state income taxes, but also adds to state and local sales taxes and local property taxes when these workers purchase goods and services from local businesses or own homes in the communities.” 

Highlights from the Southeast Economic Growth Region Report:

• Nonprofit establishments employed about 7,400 workers in EGR 10 (excluding volunteers) in 2018, or about 7 percent of the total paid workforce in the region. Total nonprofit payroll amounted to $310 million in 2018, also about 7 percent of total payroll in the region. Both percentages are lower than for Indiana as a whole (10 percent). 
• Overall, nonprofits in EGR 10 employed about as many people as the fourth largest industry in the region (transportation and warehousing) in 2018. Nonprofit payroll ranked fourth as well. 
• More than half (54 percent) of nonprofit workers were employed in health care in EGR 10 in 2018, about the same as for the state overall (56 percent). The social assistance industry accounts for a larger share of nonprofit employment in the region than in the state as whole (21 vs. 10 percent).
• Nonprofit establishments in EGR 10 on average employ more workers and pay higher wages than their for-profit counterparts across all major nonprofit industries except for arts, entertainment, and recreation. The data do not distinguish between reliance on full-time vs. part-time workers. 

Selected highlights of the Clark and Floyd Counties Report:

• Nonprofit establishments employed about 6,000 workers in Clark and Floyd counties combined in 2018, or about 82 percent of all nonprofit workers in the overall EGR 10. Total nonprofit payroll was $269 million, or about 7 percent of total payroll in the two counties. 
• Nonprofit employment and payroll in the two counties account for a larger share of the total in 2018 than was the case in 2000, reflecting in part the conversion of a major facility from government to nonprofit ownership in 2017. 
• Health care and social assistance accounted for 78 percent of total nonprofit employment in 2018. Nonprofit establishments are particularly important in the social assistance industry, accounting for about 60 percent of all employees in the industry.
• The average size of nonprofit establishments (as measured by average number of employees per establishment) in Clark and Floyd counties tends to be larger than their for-profit counterparts. They also pay higher average annual wages (except for arts, entertainment and recreation). The data do not distinguish between reliance on full-time vs. part-time workers.

Speed continued, “The Community Foundation is proud to support our nonprofit partners and highlight the important role they play in our community. These past few months have shown us all how nonprofits provide for those in need – helping individuals, families and small businesses during the COVID-19 pandemic. We hope these reports bring to the forefront what many of us don’t see, which is how our nonprofit partners provide services – in good times and in hard - and how their work positively impacts our region from an economic and quality of life standpoint.”

The reports can be found on the Community Foundation’s website at www.cfsouthernindiana.com under Community Resources.