Is the Nonprofit Sector for You?
For several decades, I worked in the charitable sector. In fact, at one point, just out of undergraduate school, I received offers to go into either government, business or the nonprofit sector. I chose the nonprofit sector as I wanted to give back to help others.
There are more than 1.5 million tax-exempt 501(c)3 organizations in the U.S. The Volunteering in America research project found that more than 77 million volunteers served 6.9 billion hours at an estimated $167 billion in economic value in 2017. According to the latest Giving USA report, Americans gave more than $471 billion to nonprofits in 2020. The impact of nonprofits in the U.S. is significant.
According to Cause IQ, the nonprofit sector employs 24 million people, about 14% of the U.S. workforce. Hospitals and universities employ half of all nonprofit personnel while almost half of nonprofits (mostly foundations) employ no one. There are 104,226 small nonprofits that employ 10 or fewer people. Nonprofit personnel typically earn between $16,607 and $92,770 in wages, benefits and other types of compensation.
On average, nonprofits that pay the most are science and technology research centers, medical research organizations, and international and foreign affairs organizations. On the opposite end of the wage spectrum, organizations that use more part-time workers and a less skilled workforce are in the areas of recreation, sports and social clubs.
Nonprofit organizations do not exist to make a profit. They raise funds to fulfill purposes and missions related to charity, science, literacy and others, as defined by the IRS. After covering operating costs, nonprofits direct remaining revenue to their various causes that benefit humanity.
Per a Rasmussen University blog, individuals should consider working for a nonprofit because of the following reasons:
- Your work makes a difference.
- You have more variety in responsibilities.
- You play mutual roles leading to career advancement.
- You could be eligible for student loan forgiveness programs.
- You enjoy a connected work environment.
Business majors can especially help nonprofits operate like a business. Nonprofits need finance staff, operations staff and executive staff. It is critical that a nonprofit operate and be organized with a successful business model.
If you are considering a job in the nonprofit sector or remaining in the nonprofit sector, the Harvard Business Review provides food for thought on this topic. Current employees need to ask themselves if you are excited about the problems the nonprofit is trying to address. You also need to ask yourself, based upon your skills, can you add value to the nonprofit’s mission.
Nonprofit work entails a great deal of relationship-building. The roles for this type of impact include on-the-ground implementation roles, enabler roles and having soft skills. Soft skills include being a strong communicator, problem solver and having empathy. Hard skills represent technical expertise like data analysis, copywriting, finance and social media. You need to use these skills to solve problems and seek solutions. You need patience and resilience to succeed in the nonprofit world.
Across all four categories of health indicators studied — financial resources, human capital, governance and trust, and public policy and advocacy — in the Health of the U.S. Nonprofit Sector, the overall health of the sector appears mixed.
The U.S. nonprofit economic contribution in 2019 was $1.2 trillion dollars. Giving dollars increased 3.8% with the number of donors improving 1.3%, which is almost completely driven by an 11% increase in small donations ($101 to $500). With respect to nonprofit workers, the workforce continues to skew female with about 65% compared to approximately 47% of the total workforce.. Nonprofits paid more than $670 billion in wages in 2017. With respect to trust, 57% of the public in the United States trusts nonprofits to do what is right.
The Foundation List stated that, in 2021, a shift developed in how many nonprofits operated just to survive in this COVID-19 era. There has been a significant increase in demand for technical professionals as many nonprofits have moved to remote working. The modern worker demands flexibility for job satisfaction.
Inflation and the need to raise salaries has also been increasing in the nonprofit sector for social services, foundations, educational institutions, unions, associations and other nonprofit employers. Looking to this year, nonprofit workers will need to leverage a combination of tools, such as marketing, project management, web design, social media and online fundraising platforms. Nonprofit job losses from the last year and being recovered, but total recovery will take time.
The University of Washington Division of Student Life notes that workers find nonprofits attractive because the organizations are mission-driven and provide employees a good feeling when working for them. Workers love to make a difference and see job impact. To work for a nonprofit, you need to demonstrate an experienced fit and passion for philanthropy. Many people in the nonprofit sector are open to change and care about each other. They value expertise and explore personal volunteering to understand organizational operations from various perspectives. They share ideas and want to promote the greater good with their personal life philosophy.
There are challenges to funding nonprofit positions. It may be difficult to obtain an ideal position. Decide what your nonprofit job focus will be and maintain it. To obtain additional experience, join a board as a volunteer. Many nonprofits are conservative in approach and that limits big ideas. Organizations tend to hire individuals aligned and experienced with their mission plus way of working. Many nonprofit boards are weak. Make sure the organizations that interest you have dynamic CEOs and organizational cultures that will motivate you to stay with that organization long-term.
You have seen the facts in the nonprofit sector. You hopefully have a sense of what working in this sector will be like. I did not originally plan to be in this sector as I did not know what it entailed. I am very happy that I made the decision years ago to engage in this sector. It became part of my DNA years ago, and I intend to finish my work career in the nonprofit sector. Do you?
Duke Haddad, Ed.D., CFRE, is currently associate director of development, director of capital campaigns and director of corporate development for The Salvation Army Indiana Division in Indianapolis. He also serves as president of Duke Haddad and Associates LLC and is a freelance instructor for Nonprofit Web Advisor.
He has been a contributing author to NonProfit PRO since 2008.
He received his doctorate degree from West Virginia University with an emphasis on education administration plus a dissertation on donor characteristics. He received a master’s degree from Marshall University with an emphasis on public administration plus a thesis on annual fund analysis. He secured a bachelor’s degree (cum laude) with an emphasis on marketing/management. He has done post graduate work at the University of Louisville.
Duke has received the Fundraising Executive of the Year Award, from the Association of Fundraising Professionals Indiana Chapter. He also was given the Outstanding West Virginian Award, Kentucky Colonel Award and Sagamore of the Wabash Award from the governors of West Virginia, Kentucky and Indiana, respectively, for his many career contributions in the field of philanthropy. He has maintained a Certified Fund Raising Executive (CFRE) designation for three decades.