Growth in Md. nonprofit sector outpaces for-profit companies

Study finds nonprofits generating more jobs

May 29, 2001|By Alice Lukens | Alice Lukens,SUN STAFF

Maryland's nonprofit sector continues to grow faster than any other part of the state's economy, according to a study to be released today.

The study by Lester M. Salamon and Sarah Dewees of the Center for Civil Society Studies at the Johns Hopkins University finds that nonprofit organizations still outpace for-profit companies in generating jobs.

"I continue to be surprised at the scale of the sector," said Salamon, the center's director. Between 1998 and 1999 - the last year for which data is available - nonprofit employment grew by 3.7 percent, out-performing the for-profit and government sectors, even during a time when the economy was strong. Though the economy has since weakened, nonprofit organizations traditionally thrive in bad times, he said.

The nonprofit sector employs a greater percentage of people in Maryland than elsewhere in the nation - 8.5 percent, compared with 7.2 percent nationally - and provides more jobs than manufacturing businesses. In 1999, nonprofit groups' payrolls also were larger than those for construction or wholesale trade.

In the city, the growth was especially strong, with nonprofit organizations accounting for nearly half of all net new job growth.

"It just validates that the nonprofit sector really is providing the economic engine for Baltimore," said Peter V. Berns, executive director of the Maryland Association of Nonprofit Organizations. "The city really ought to be cherishing that and safeguarding it, as opposed to turning around and trying to undermine it by taxing nonprofits."

Despite the strong growth in the city, 51 percent of the nonprofit employment in the state is located the suburbs of Baltimore and Washington, the study notes, where they have followed the population.

Berns said the location of such organizations tends to dictate their mission. "The city nonprofit is really likely to be serving the poorest and most vulnerable citizens in the community," he said, while suburban nonprofit groups serve a broader mix of people.

"People give to institutions that they are familiar with and that they can see in operation, they can connect with," said Salamon, though he added: "This is one of the real crises/challenges of American urban space. People get disconnected from the problems of the inner city."

Educational nonprofit groups grew the fastest in 1999, adding 3,258 jobs, a growth of nearly 10 percent over the year before. Social service organizations added 2,515 new jobs, while culture and recreation groups added 119 jobs.

The study notes that for-profit companies are beginning to capture some of the growth in education and social services, although they are not gaining ground in the health field. Salamon said this also is a disturbing trend.

"The for-profits come in waves," he said. "When the markets turn, the for-profits disappear" - and, he said, needy people are often left without help when they need it most.

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