Skip to main content

Look to nonprofit sector to create jobs

By Paul Schmitz, Special to CNN
updated 12:16 PM EDT, Fri October 19, 2012
There are almost 1.5 million nonprofit organizations in the country, including Habitat for Humanity.
There are almost 1.5 million nonprofit organizations in the country, including Habitat for Humanity.
STORY HIGHLIGHTS
  • Paul Schmitz: President Obama and Mitt Romney are ignoring the nonprofit sector
  • Schmitz: The sector is one of the fastest growing over the past decade
  • He says the next president can do a number of things to support the industry
  • Schmitz: Investing in the nonprofit work force is a win for job creation and economy

Editor's note: Paul Schmitz is the CEO of Public Allies and author of "Everyone Leads: Building Leadership from the Community Up."

(CNN) -- As both President Obama and Mitt Romney make the case for creating jobs, they are ignoring one of the fastest-growing job creators in our economy: the nonprofit sector. The only mention of nonprofits on the campaign trail or in the debates has been whether to limit tax deductions for charitable donations. For the sake of our economy, the health and continuous growth of this sector should be a priority for the next president.

The size and scope of the nonprofit sector may come as a surprise. There are almost 1.5 million nonprofit organizations in the country, including well-known brands like the Girl Scouts, Habitat for Humanity, United Way and the YMCA, as well as many smaller and more community-based service organizations, schools, congregations, sports leagues and hospitals.

Taken all together, the sector generates almost $1.5 trillion in spending per year and employs about one in 10 American workers, or 13.5 million people. It is the third largest labor force behind retail trade and manufacturing.

Paul Schmitz
Paul Schmitz

If your son or daughter is considering a career in nonprofits, don't be alarmed. While nonprofits are known for employing social workers, they also need managers, human resource professionals, educators, artists, computer programmers, marketers, accountants, athletes, carpenters, researchers, cooks and many other skilled workers.

And as one of the fastest-growing job sectors over the past decade, nonprofits offer plenty of good jobs. According to a study by Lester Salamon of Johns Hopkins University, "the U.S. nonprofit sector posted a remarkable 10 year record of job growth despite two recessions, achieving an annual growth rate of 2.1% from 2000 to 2010." In comparison, for-profit jobs declined by 0.6% per year during the same period. The study continues, "Even during the recession from 2007 to 2009, nonprofit jobs increased by an average of 1.9% per year. At the same time, businesses averaged jobs losses of 3.7% per year."

Become a fan of CNNOpinion
Stay up to date on the latest opinion, analysis and conversations through social media. Join us at Facebook/CNNOpinion and follow us @CNNOpinion on Twitter. We welcome your ideas and comments.



There are several reasons that account for the growth. In a time of economic challenges, nonprofits have grown to meet the greater needs in our communities. Many services previously provided by the government are now contracted to nonprofits. Changing demographics, especially the aging of America, has increased demand for services. The sector has also experienced a wave of entrepreneurship and innovations, along with adoptions of best practices from businesses, that have increased its effectiveness and size.

One might question whether jobs created in the nonprofit sector are really private-sector jobs, since many of the jobs are subsidized by the government through tax-deductible donations and direct grant support. But the truth is that many private-sector businesses receive tax credits, tax deductions, government grants and government contracts.

Obama wins debate, loses on economy
GE CEO: Washington holding back growth

No one dismisses as private-sector jobs those at Lockheed Martin, which received $16 billion in government contracts from 2009 to 2011. Or General Electric, which paid no federal taxes last year.

When there are proposals to cut defense or other federal programs that fund businesses, Congress often protects them because those cuts kill private-sector jobs. Shouldn't Congress likewise protect cuts in federal funds that eliminate middle-class jobs that provide health, education, opportunity, safety and culture for our communities?

Here are some things the next president can do to support a growing nonprofit sector:

1. Maintain the charitable tax deduction and the estate tax.

Restricting the flow of private resources into the nonprofit sector will affect its opportunity to create and sustain jobs and impact. Charitable giving overall is essential to our communities, democracy and economy. But there is still a need to explore how to drive more giving toward greater problems like poverty rather than university endowments.

2. Provide student loan forgiveness and incentives for veterans.

Most nonprofits are not able to invest in training and development, so young employees bear those costs. Allowing student loan forgiveness for those who devote their lives to service and allowing a new GI Bill to invest in returning veterans who want to serve their communities at home would make a great difference.

3. Expand national service.

With 87,000 people serving in AmeriCorps nationally, this public-private partnership has become a critical human capital source for the nonprofit sector. Both presidential candidates have been champions of service, and whoever wins should implement the bipartisan Serve America Act to grow AmeriCorps to 250,000 people.

4. Invest in social entrepreneurship.

Expand the federal social innovation fund and new sources of financing, such as social impact bonds, so that investments can go into helping organizations and programs that show evidence of success.

5. Open federal investments in small businesses and jobs to nonprofits.

Nonprofits are not able to access the same incentives as businesses to grow and train their work forces. If nonprofits could receive tax credits, they could sell in a secondary market to businesses to grow more jobs. In addition, the Small Business Administration and other federal programs that support jobs could open opportunities to nonprofits.

Investing in the nonprofit work force is a double win because it would create good jobs and improve our quality of life through mission-driven goals. The nonprofit sector should be a central part of any discussions about our economic recovery strategy.

The opinions expressed in this commentary are solely those of Paul Schmitz.

ADVERTISEMENT
Part of complete coverage on
updated 12:26 PM EDT, Wed August 27, 2014
The death of Douglas McAuthur McCain, the first American killed fighting for ISIS, highlights the pull of Syria's war for Western jihadists, writes Peter Bergen.
updated 6:42 PM EDT, Tue August 26, 2014
Former ambassador to Syria Robert Ford says the West should be helping moderates in the Syrian armed opposition end the al-Assad regime and form a government to focus on driving ISIS out
updated 9:21 AM EDT, Wed August 27, 2014
Ruben Navarrette says a great country does not deport thousands of vulnerable, unaccompanied minors who fled in fear for their lives
updated 9:19 AM EDT, Wed August 27, 2014
Robert McIntyre says Congress is the culprit for letting Burger King pay lower taxes after merging with Tim Hortons.
updated 7:35 PM EDT, Tue August 26, 2014
Wesley Clark says the U.S. can offer support to its Islamic friends in the region most threatened by ISIS, but it can't fight their war
updated 7:26 AM EDT, Wed August 27, 2014
Jeff Yang says the tech sector's diversity numbers are embarrassing and the big players need to do more.
updated 4:53 PM EDT, Tue August 26, 2014
America's painful struggle with racism has often brought great satisfaction to the country's rivals, critics, and foes. The killing of Michael Brown and its tumultuous aftermath has been a bonanza.
updated 4:19 PM EDT, Tue August 26, 2014
Ed Bark says in this Emmy year, broadcasters CBS, ABC and PBS can all say they matched or exceeded HBO. These days that's no small feat
updated 3:19 PM EDT, Tue August 26, 2014
Rick Martin says the death of Robin Williams brought back memories of his own battle facing down depression as a young man
updated 11:58 AM EDT, Tue August 26, 2014
David Perry asks: What's the best way for police officers to handle people with psychiatric disabilities?
updated 3:50 PM EDT, Mon August 25, 2014
Julian Zelizer says it's not crazy to think Mitt Romney would be able to end up at the top of the GOP ticket in 2016
updated 4:52 PM EDT, Mon August 25, 2014
Roxanne Jones and her girlfriends would cheer from the sidelines for the boys playing Little League. But they really wanted to play. Now Mo'ne Davis shows the world that girls really can throw.
updated 12:29 PM EDT, Mon August 25, 2014
Peter Bergen and Emily Schneider say a YouTube video apparently posted by ISIS seems to show that the group has a surveillance drone, highlighting a new reality: Terrorist groups have technology once only used by states
updated 5:04 PM EDT, Mon August 25, 2014
Kimberly Norwood is a black mom who lives in an affluent neighborhood not far from Ferguson, but she has the same fears for her children as people in that troubled town do
updated 5:45 PM EDT, Fri August 22, 2014
It apparently has worked for France, say Peter Bergen and Emily Schneider, but carries uncomfortable risks. When it comes to kidnappings, nations face grim options.
updated 1:27 PM EDT, Tue August 26, 2014
John Bare says the Ice Bucket Challenge signals a new kind of activism and peer-to-peer fund-raising.
updated 8:31 AM EDT, Fri August 22, 2014
James Dawes says calling ISIS evil over and over again could very well make it harder to stop them.
updated 9:05 PM EDT, Sat August 23, 2014
As the inquiry into the shooting of Michael Brown continues, critics question the prosecutor's impartiality.
updated 6:47 PM EDT, Fri August 22, 2014
Newt Gingrich says it's troubling that a vicious group like ISIS can recruit so many young men from Britain.
updated 10:50 AM EDT, Thu August 21, 2014
David Weinberger says Twitter and other social networks have been vested with a responsibility, and a trust, they did not ask for.
updated 7:03 AM EDT, Fri August 22, 2014
John Inazu says the slogan "We are Ferguson" is meant to express empathy and solidarity. It's not true: Not all of us live in those circumstances. But we all made them.
updated 8:23 AM EDT, Fri August 22, 2014
Retired Lt. Gen. Mark Hertling says he learned that the territory ISIS wants to control is amazingly complex.
updated 3:51 PM EDT, Wed August 20, 2014
Cerue Garlo says Liberia is desperate for help amid a Ebola outbreak that has touched every aspect of life.
updated 1:42 PM EDT, Thu August 21, 2014
Eric Liu says Republicans who want to restrict voting may win now, but the party will suffer in the long term.
updated 11:38 AM EDT, Thu August 21, 2014
Jay Parini: Jesus, Pope and now researchers agree: Wealth decreases our ability to sympathize with the poor.
updated 8:00 AM EDT, Thu August 21, 2014
Judy Melinek offers a medical examiner's perspective on what happens when police kill people like Michael Brown.
updated 6:03 PM EDT, Tue August 19, 2014
It used to be billy clubs, fire hoses and snarling German shepherds. Now it's armored personnel carriers and flash-bang grenades, writes Kara Dansky.
updated 1:27 PM EDT, Wed August 20, 2014
Maria Haberfeld: People who are unfamiliar with police work can reasonably ask, why was an unarmed man shot so many times, and why was deadly force used at all?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT