Nonprofits

How Critical Are Nonprofits to American Labor and the U.S. Economy?

Nonprofits are a driving force in the U.S. economy, providing jobs, strengthening communities, and fueling local and national economic growth. Yet, their role is often misunderstood.

Kian Alavi

CEO

February 21, 2025

Nonprofits Are a Major U.S. Employer
Nonprofits Drive Economic Growth & Community Investment
Nonprofits Strengthen America’s Workforce & Future

Nonprofits Are a Major U.S. Employer

The nonprofit sector is the third-largest workforce in the country, trailing only retail and food services. To put this into perspective, nonprofits employ more people than finance, construction, and manufacturing combined.

Key employment facts:

  • Nonprofits sustain millions of jobs across healthcare, education, social services, and the arts.
  • 66.1% of nonprofit employees are women, making the sector a leader in women's employment.
  • Highly skilled workforce—65% of nonprofit employees have at least a bachelor’s degree, with 33% holding a master’s or higher.

Nonprofits play an even greater role in employment in many states, including West Virginia (15.2%), Montana (13.9%), North Carolina (12.4%), Arizona (8.0%), and Pennsylvania (15.7%). In Florida (7.2%), Ohio (12.0%), and Wisconsin (11.4%), nonprofits contribute a growing percentage of private-sector employment, highlighting their critical economic role across different regions.

According to the U.S. Bureau of Labor Statistics (BLS), nonprofits employ 12.8 million people, representing 9.9% of private-sector jobs nationwide. In states with smaller populations, nonprofits can account for over 17% of private-sector jobs, reinforcing their outsized economic influence.

A strong nonprofit sector means economic security for millions of American workers, creating stability across all regions of the country.

Nonprofits Drive Economic Growth & Community Investment

Nonprofits do far more than provide jobs—they circulate billions of dollars into local economies and create lasting economic impact in every state.

Unlike the common misconception that nonprofits run solely on donations, 73% of nonprofit revenue comes from earned income through program services, memberships, and business ventures. This allows them to:

  • Purchase goods and services from local businesses, fueling regional economies.
  • Support infrastructure projects, including community centers, healthcare clinics, and schools.
  • Create events and programs that drive tourism and local spending.

Nonprofits have a major economic footprint across the country, particularly in states with smaller populations. They provide education, healthcare, and job training services where corporate investment is limited, ensuring economic opportunity and essential services remain available.

When nonprofits thrive, economies across America benefit—creating jobs, stimulating spending, and strengthening community investment.

Nonprofits Strengthen America’s Workforce & Future

Beyond job creation, nonprofits ensure the stability and future of the U.S. workforce by providing critical services that help Americans enter and stay in the labor market.

  • 65% of nonprofit jobs are in healthcare and education, keeping communities healthy and trained for the workforce.
  • Nonprofit childcare, job training, and workforce development programs enable more people to work and build careers.
  • Health services and mental health programs keep employees productive and reduce strain on the private sector.

The impact of these services extends beyond urban centers—they are often the only available resources in states with dispersed populations, ensuring workforce participation and economic stability across all regions.

Without strong nonprofits, many communities would lose access to essential services that drive workforce participation and economic security.

The Bottom Line: Nonprofits Are Essential to America’s Economy

Nonprofits aren’t just charitable organizations—they are economic engines that power job creation, community investment, and workforce development.

A strong nonprofit sector means:
✅ More jobs in critical industries.
✅ Stronger local economies, benefiting all states.
✅ A workforce that is healthier, more educated, and more prepared for the future.

Nonprofits are not just asking for support—they are fundamental to the country’s economic success.

Supporting nonprofits isn’t just about philanthropy—it’s about securing America’s economic future.

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