Independent Sector Releases Update to Health of the U.S. Nonprofit Sector Report

New report highlights need for greater attention on a healthy and equitable sector and nation

(WASHINGTON, June 28, 2021) – The U.S. nonprofit economic recovery is slow and uneven with the sector suffering a first quarter 2021 drop of 1% in its gross value-added portion to the economy, despite the nation’s gross domestic product growing by 6.4% during the same period, according to an Independent Sector report released today.

The decline during the first three months of the year occurred as U.S. nonprofit jobs are not expected to return to pre-COVID-19 levels until at least the fall of 2022, which will continue to have an impact on nonprofit programs helping people and communities rebuild following the pandemic and recession.

This first-quarter 2021 data – including 829,000 jobs needed and more than 1 year to return to pre-COVID-19 employment levels – is part of Independent Sector’s U.S. Nonprofit Sector: Quarterly Review report. The quarterly report includes original and aggregated data and focuses on nonprofit employment and economic contributions to the nation. It follows Independent Sector’s Health of the U.S. Nonprofit Sector: Annual Report, released last year, that includes more comprehensive analysis and data in one easy-to-read format to help gauge sector strengths and areas for improvement.

“Just as our first annual health report did in 2020, our U.S. Nonprofit Sector: Quarterly Review spotlights timely data to draw attention to gaps our nation and sector need to close to promote individual and collective flourishing,” said Daniel J. Cardinali, president and CEO of Independent Sector. “These key data points will inform sector and policy conversations as we work toward solutions during this watershed moment for our nation.”

Changes in the demographic composition of the nonprofit workforce in first quarter 2021 may hint at which nonprofit staff were hit the hardest during pandemic layoffs. As of the end of March, the U.S. nonprofit workforce was less diverse than the overall population.

“The sector’s drop of 1% in added gross value during the first quarter and nonprofit employment and diversity underscore the vital role policymakers, philanthropies, corporate charity programs, and concerned individuals play in our collective efforts to build a healthy and racially equitable nation,” Cardinali added.

“Nonprofits are a pillar for the nation. We welcome everyone, and the communities we serve represent the country’s breadth of diversity. With the added gross value lower and fewer nonprofit employees than needed to fully address community needs, including full vaccination efforts, protecting the environment, and strengthening ties in the face of our racial reckoning, it’s crucial we rely on the data, listen to community voices, and work together to make headway on ensuring that everyone can thrive.”

Additionally, the first quarter of 2021 saw an increase in giving to nonprofits supporting human services, the environment, and animals, compared to the same period last year. But nonprofits also critical to the national rebuilding efforts – such as those focused on education, arts, culture, humanities, religion, and health – experienced decreases in giving for those same periods.

Other key findings from the U.S. Nonprofit Sector: Quarterly Review include:

  • During the first quarter of the year, gross nonprofit outputs increased by a rate of 10.7%, compared to the fourth quarter of 2020.
  • But gross nonprofit outputs for the first three months of 2021, by certain categories, were uneven: 23.6% increase for health nonprofits, 20.6% drop for education nonprofits, and 95.6% growth for social service nonprofits.
  • In the first three months of 2021, the number of donors set a record and increased by 10%, compared to the same period last year.
  • While giving amounts up to $500 increased, donations above that figure decreased in the first quarter of the year, compared to the first three months of 2020.
  • In the first quarter of 2021, nonprofits made up 5.6% of the gross domestic product and 7.1% of the nation’s overall workforce.

To read the U.S. Nonprofit Sector: Quarterly Review, visit independentsector.org/nonprofithealth.

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Independent Sector is the only national membership organization that brings together a diverse community of changemakers at nonprofits, foundations, and corporate giving programs working to ensure all people in the United States thrive.

Media Contact:

Bradley Wong
202-467-6122
media@independentsector.org

Types: Press Release
Global Topics: Nonprofit Health