Md. nonprofits grew in 2008 despite recession, study finds

By Susan Kinzie
Tuesday, January 12, 2010

The number of jobs at Maryland's nonprofit organizations increased in 2008 despite the recession, according to a Johns Hopkins University study released Monday, even as the state's for-profit sector reduced the size of its workforce.

Organizations such as hospitals, universities, arts programs and social service agencies added to payrolls by nearly 3 percent, while employment in the for-profit sector dropped by more than 3 percent.

That mirrors national trends in previous recessions, according to the researchers.

"It's very striking," said Lester Salamon, the study's author and director of the Johns Hopkins Center for Civil Society Studies, who believes that nonprofits have been counter-cyclical forces in the economy, driving growth and hiring more people even in downturns.

That's probably true, at least in part, Salamon said, because government programs such as Medicaid and Medicare, which help the needy, bolster nonprofit budgets in tough times.

The survey surprised many in the nonprofit field who have been struggling through the recession and who said they expect 2009 numbers to tell a different story.

Nonprofits that did not receive federal money faced a much more grim outlook in 2009, said Diana Aviv, president and chief executive of Independent Sector, a coalition of nonprofit groups, foundations and corporate giving programs. With private giving and state and local government funding declining, she said, many organizations cut staff hours or positions or closed their doors entirely.

Although many social service agencies received federal stimulus dollars and were able to expand, at least in the short term, the overall national pattern in 2009 was one of contraction, said Lisa Brown Morton, president and chief executive of Nonprofit HR Solutions in the District, which does a smaller survey.

"We're expecting to see continued reductions in staff through 2010," she said.

A national survey of nonprofit groups by the Chronicle of Philanthropy reported that more than half said they had cut jobs between August 2008 and August 2009, leaving about 4 percent fewer employees. But fewer than one in 10 said they expected to cut more jobs in 2010, and almost one in five said they would be hiring.

Doug Pedersen, vice president of the firm Careers in Nonprofits, said he was expecting 2010 to be better than 2009. "We're already seeing an uptick in placements, in permanent jobs."

Salamon said he expects to find that federal stimulus dollars helped propel growth in 2009.

That doesn't mean times have been easy: Demand has increased dramatically for many nonprofits during the recession.

"These are tough times, and more people are knocking on the doors of nonprofits for help," said Chuck Bean, executive director of the Nonprofit Roundtable of Greater Washington. He suggested that because nonprofit organizations need more staff and the economy needs creation of jobs, "the next stimulus package should enable nonprofits to hire more people to meet the demands of this recession." In Maryland, nonprofit organizations are the second-largest employer category, behind only retail trade. Ten percent of all the jobs in the state, more than 250,000 in 2008, were at nonprofit agencies.

The sector has grown over the past decade. Between 1999 and 2008, according to the Hopkins researchers, nonprofit employment expanded 27 percent, almost seven times as much as job growth among Maryland for-profit firms.

© 2010 The Washington Post Company