Study: Nonprofits Are an Important Tool in Economic Recovery

The National Conference on Citizenship says nonprofits play a key role in civic health.

Nonprofits — charitable or not — may have helped give some communities a lift during the recession, a new report says.

“Civic Health and Unemployment II: The Case Builds,” released earlier this month by the National Conference on Citizenship (NCoC), suggests that communities with a larger number of nonprofits had less-severe drops in unemployment.

“A secret weapon in America’s economic recovery can be found in the connections between and among citizens, and a strong nonprofit sector,“ said NCoC Executive Director David B. Smith. “In cities and towns across the country, strong civic health is the bricks and mortar of a strong economic foundation.”

The group worked on the study with the John S. and James L. Knight Foundation and research assistance from Tufts University’s CIRCLE (The Center for Information and Research on Civic Learning and Engagement) and Harvard University’s Saguaro Seminar.

Some highlights from the report:

  • Unemployment rate: Counties that ranked in the top 10 percent of nonprofit density in a 2006 study saw their unemployment rates jump by 2 percent between 2006 and 2009 — much lower than the 5.1 percent jump experienced by counties in the bottom 10 percent.
  • Not just charity: Employment-related groups, such as unions and nonprofits focused on job training, also helped encourage lower levels of unemployment, though at a rate slightly lower than that of charitable nonprofits.
  • Job loss: Someone in an area with a low density of nonprofits was twice as likely to become unemployed after 2008 as someone in an area with many nonprofits.

The full study is available at the NCoC website.

(TMG archive photo)

Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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