Phila. nonprofits employ 242,000 people, study says

March 25, 2010

By Mike Armstrong, Philadelphia Inquirer


I knew the nonprofit sector was big in the Philadelphia area, but not as big as a new study shows it to be.

One in eight full-time employees in the city and its four suburban Pennsylvania counties works for a nonprofit organization. In all, that's 242,000 people.


Nineteen months ago, the Philadelphia Foundation commissioned a study to benchmark the number and financial attributes of nonprofits.


At the time, Philadelphia Foundation president Andrew R. Swinney told me he hoped the study would shine some light on the financial health of the sector. Ailing nonprofits would spell trouble for Philadelphia's employment future, he said.


It was good that the foundation commissioned the Economy League of Greater Philadelphia to gather and analyze the data pronto because the Great Recession proceeded to disrupt the finances of many nonprofits.

Available on the foundation's Web site, the study, called "It Matters," counted 15,149 nonprofits in the five counties. Of those, only 7,285 file tax returns. (Swinney said the rest are either too small or are religious organizations that are exempt from IRS requirements.)


Of the hospitals, schools, museums and other "public charity" organizations that filed tax returns, more than one-third ran an operating deficit in 2007. The red ink was worse among a narrower subgroup that excludes hospitals and higher education - 36 percent had deficits.


But that doesn't make the sector irrelevant. Revenues at the public charities rose 68 percent from $20.82 billion in 2000 to $34.98 billion in 2007. For the same year of 2007, Sunoco Inc. had revenues of $44.7 billion and Comcast Corp. $30.9 billion.


Those 15,000 nonprofits provided a total of $11.3 billion in wages. The study states that if the federal government were to count nonprofits as an official economic sector, they would rank as the third-largest in the region by employment and wages behind the trade, transportation and utilities sector, and professional and business services.


To Swinney, that kind of impact means nonprofits need to become "part of the conversation" when business and government talk about economic development. "It plays a more important role than we give it credit for," he said.