The Economic Importance of the Nonprofit Sector

Earlier this year, the Michigan Nonprofit Association reported on the economic importance of the nonprofit sector in my beloved home state of Michigan. Some interesting tidbits (full report can be downloaded in PDF format):

This report documents that Michigan’s nonprofit organizations:

  • Number over 47,000—an increase of 14 percent since 2001 (41,000) and 25 percent since 1997—with nearly 10,000 new organizations since 1997
  • Employ directly more than 440,000 people (an increase of 40 percent from 315,000 in 2001), or ten percent of the Michigan workforce
  • Pay their employees more than $4 billion per quarter
  • Generate an additional 161,000 jobs as a result of spending by the organizations
  • Hold assets of over $179 billion, up 71 percent from $105 billion in 2003
  • Receive more than $133 billion in annual revenue, an increase of 85 percent from $72 billion in 2003
  • Generate more than $108 billion each year in overall economic activity, through direct expenditures of more than $60 billion, which creates indirect and induced economic effects of an additional $48 billion

In the times of government bailouts, Michigan has been in the forefront of public scrutiny, obviously because of the Big Three. Banks, Wall Street, and the Auto Industry have all been kept afloat by the auto industry – and while I’m no economist, it does seem puzzling that there hasn’t been any discussion about assisting the nonprofit sector. I’m not in any way saying there should be – whether or not the government should be involved in this way is an entirely different conversation.

I’m simply saying it’s curious, because I think the lack of such discussion indicates to us in the nonprofit community that our services are highly undervalued.

Fortunately, we have the good people at MNA doing the good work of making the case that we, as a sector, are important, and our voice needs to be heard. Kudos to the folks at MNA. Keep up the great work!

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