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Nonprofits Stabilize Indiana's Regional Economies
Indiana Ag Connection - 04/05/2021

A collection of new reports detailing the economic impact of nonprofits in four of Indiana's economic growth regions highlights the significant influence the organizations have, according to research from the Indiana Nonprofits Project, a collaborative effort between the Indiana University Lilly Family School of Philanthropy and O'Neill School of Public and Environmental Affairs.

The reports highlight the significant economic impact that nonprofit establishments have in providing relatively well-paying jobs to tens of thousands of workers in each region: Northwest Indiana (Economic Growth Region or EGR 1, including Gary), North Central Indiana (EGR 2, including South Bend), Northwest Central Indiana (EGR 4, including Lafayette and Kokomo) and East Central Indiana (EGR 6, including Muncie and Richmond).

The wages earned by nonprofit employees benefit the regional economies when those workers buy goods and services from local businesses. Nonprofit workers also contribute to state and local government finances when they pay state income taxes, state and local sales taxes, and local property taxes. The reports are based on Quarterly Covered Employment and Wage data submitted by nearly all Indiana employers.

"Since 2000, each of these regions have faced major economic challenges as jobs in manufacturing declined significantly from 2000 to 2010, with limited recovery in the following nine years," said Kirsten GrĂžnbjerg, director of the Indiana Nonprofits Project. "The Great Recession (2007-08) created losses also in other industries. By comparison, over the 2000-2019 period, nonprofit employment and payroll grew in all four regions, and often at faster rates than corresponding rates in the for-profit or government sectors. Clearly, the nonprofit sector played a stabilizing role in the economy of each region."

Nonprofit workers in each region play a vital role by providing community residents with key services in health care, social assistance, education, arts, culture and recreation, and more. In each of the regions, most nonprofit employees work in health care, with smaller proportions working in social assistance, education and membership associations.

The size of nonprofit establishments and average nonprofit annual wages vary considerably across these industries, though they are highest in health care and lowest in arts, entertainment and recreation. More detailed analysis shows that nonprofit establishments generally employ more workers on average than for-profit establishments in the major nonprofit industries and pay higher average annual wages.

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