Growth in the nonprofit sector far outpaced for-profits over 10-year period

April 8, 2014

Growth in the nonprofit sector far outpaced for-profits over 10-year period

Nonprofits are showing that they have real staying power as growth in the sector has outpaced that of for-profits by a significant amount. According to The New York Times, a study by the Urban Institute found the number of nonprofits in the U.S. grew by 25 percent, compared to just a half of one percent growth in the number of for-profit businesses.

Overall, the number of for-profits is still quadruple that of nonprofits, but the numbers, based on data collected between 2001 – 2011, still suggest things are looking up for the nonprofit sector. Nonprofits also outpaced their for-profit counterparts in hiring, wages and contribution to GDP, The Times reports. 

Nonprofits are built for tough times
There are a number of different reasons for the jump in nonprofit growth, and the recession played no small part. The Times suggests that most of the growth can be pinned on both an aging population and one that has been chronically out of work for the past five years. Growing demand for nonprofit services is certainly one explanation for such large growth.

According to an infographic by Nonprofit Quarterly, the rise of nonprofits does make plenty of sense given the recent economic conditions that rounded out the last decade. Even in better times, nonprofits must be masters of running lean organizations. Funding is often unpredictable and demand can spike or fall without much notice. Because of this, they are naturally adept at weathering an economic downturn.

While a need for services could explain some of the growth, because nonprofits are not revenue based, it certainly does not explain all of it. Supply and demand does not hold as true in the nonprofit sector as it does in traditional business. Nonprofit growth was high because committed individuals saw a need for more services and made smart decisions that allowed them to keep the doors open.

Content presented by First Nonprofit Group, the leading provider of state unemployment insurance solutions for 501(c)(3) nonprofit employers.


Ready to chat?
Get in touch today to request a no-obligation savings evaluation.


CCSCT was approached by First NonProfit to discuss its Unemployment Savings Program and ways the program could significantly reduce the amount of unemployment taxes we were paying. At the time, our agency was paying approximately $80,000 per year. First NonProfit conducted an analysis to determine if making the switch would be in our best interest, and it clearly was based on our circumstances. The first year on the program, CCSCT saw a 70% reduction in its unemployment costs and each year, continues to experience further reductions as a result of having minimal claims. Some additional benefits of the program including having a fixed annual cost, an interest-baring reserve account, professional unemployment claims management and representation at all unemployment hearings. This has been one of the best decisions we have made.

Community Council of South Central Texas, Inc., Seguin, TX

We first started using First Nonprofit’s Unemployment Savings Program when we were a small startup nonprofit.  We didn’t have an HR department and needed expertise in the event that an unemployment claim was made.  We knew we were eligible to be a reimbursing employer, but weren’t sure how to navigate that process.  They made it easy to set things up, plan for, and then manage claims when they came at a very reasonable cost. The amount of time and stress they’ve saved us dealing with all this has been worth way more than the cost.  We’ve now grown to a large nonprofit and do have an HR department but have no plans to stop using their services.  I highly recommend them to every nonprofit I come into contact with!


Throughout our membership in the Unemployment Savings Program, First Nonprofit understood our demands, community dynamics, and the importance of seamless services; that allowed us to serve our constituents better.

Prevent Blindness America, Chicago, IL

Because INCS advocates for the operating conditions that allow charter public schools to provide high quality public education, partnering with First Nonprofit was an easy decision. First Nonprofit’s unemployment programs provide our member schools two operating elements crucial to their ability to provide high quality public education: savings and budget certainty. Capable, committed teachers are the key to student success. By participating in the unemployment insurance savings plan, charter public schools gain peace of mind and are able to invest more money in their teachers.

Illinois Network of Charter Schools, Chicago, IL

It has been our sincere pleasure to maintain a strong, vibrant business partnership with First Nonprofit. We greatly admire their strong industry knowledge, technical expertise, constant professionalism, knowledgeable and dedicated staff. They are always extremely responsive, personable and provide us with the necessary guidance and recommendations on a numerous variety of employment scenarios.

Thresholds, Chicago, IL

NYCON members who use First Nonprofit’s programs enjoy enduring savings and improved efficiency. Our association knows that success, because from the beginning, we achieved the same great benefits. Great savings, seamless technology, and responsive service. NYCON highly recommends First Nonprofit’s remarkable unemployment solutions.

New York Council of Nonprofits, Albany, NY

Visually Impaired Preschool Services has been a client of First Non-Profit since it was first offered as a benefit of VisionServe Alliance. We completed a thorough evaluation of cash savings to our agency before taking advantage of this wonderful benefit and it has been a very wise decision. Our experience with the processes from accounting to claims have been professional, expeditious and easy.

Visually Impaired Preschool Services, Louisville, KY

Luckily for us, our interactions regarding any issues with staffing has been very minimal! I can say that all other interactions with regards to billing, 941 reporting, etc. have been extremely pleasant, accommodating and easy to work with. Kim Ghanayem is always prompt, professional and friendly. Thank you so much!

Neurologic Music Therapy Services of Arizona, Phoenix, AZ