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 8:35 AM EDT, Mon July 21, 2014
Frida Ghitis: Anger over MH17 is growing against pro-Russia separatists. It's time for the Dutch government to lead, she writes
updated 8:27 AM EDT, Mon July 21, 2014
Julian Zelizer says President Obama called inequality the "defining challenge" of our time but hasn't followed through.
updated 7:57 AM EDT, Mon July 21, 2014
Gene Seymour says the 'Rockford Files' actor worked the persona of the principled coward, charming audiences on big and small screen for generations
updated 10:17 AM EDT, Mon July 21, 2014
Daniel Treisman says that when the Russian leader tied his fate to the Ukraine separatists, he set the stage for his current risky predicament
updated 12:42 PM EDT, Fri July 18, 2014
Andrew Kuchins says urgent diplomacy -- not sanctions -- is needed to de-escalate the conflict in Ukraine that helped lead to the downing of an airliner there.
updated 9:50 PM EDT, Fri July 18, 2014
Jim Hall and Peter Goelz say there should be an immediate and thorough investigation into what happened to MH17.
updated 11:07 AM EDT, Fri July 18, 2014
Pilot Bill Palmer says main defense commercial jets have against missiles is to avoid flying over conflict areas.
updated 1:55 PM EDT, Sun July 20, 2014
Valerie Jarrett says that working women should not be discriminated against because they are pregnant.
updated 3:53 PM EDT, Mon July 21, 2014
David Wheeler says the next time you get a difficult customer representative, think about recording the call.
updated 3:33 PM EDT, Fri July 18, 2014
Newt Gingrich says the more dangerous the world becomes the more Obama hides in a fantasy world.
updated 6:11 AM EDT, Fri July 18, 2014
Michael Desch: It's hard to see why anyone, including Russia and its local allies, would have intentionally targeted the Malaysian Airlines flight
updated 3:14 PM EDT, Thu July 17, 2014
LZ Granderson says we must remember our visceral horror at the news of children killed in an airstrike on a Gaza beach next time our politicians talk of war
updated 8:06 AM EDT, Thu July 17, 2014
Sally Kohn says now the House GOP wants to sue Obama for not implementing a law fast enough, a law they voted down 50 times, all reason has left the room.
updated 8:14 AM EDT, Thu July 17, 2014
A street sign for Wall Street
Sens. Elizabeth Warren, John McCain and others want to scale back the "too big to fail" banks that put us at risk of another financial collapse.
updated 4:16 PM EDT, Thu July 17, 2014
Newt Gingrich writes an open letter to Robert McDonald, the nominee to head the Veterans Administration.
updated 12:01 PM EDT, Fri July 18, 2014
Paul Begala says Dick Cheney has caused an inordinate amount of damage yet continues in a relentless effort to revise the history of his failures.
updated 10:04 AM EDT, Fri July 18, 2014
Kids who takes cell phones to bed are not sleeping, says Mel Robbins. Make them park their phones with the parents at night.
updated 1:29 PM EDT, Thu July 17, 2014
Buzz Aldrin looked at planet Earth as he stood on talcum-like lunar dust 45 years ago. He thinks the next frontier should be Mars.
updated 2:04 PM EDT, Wed July 16, 2014
Mark Zeller never thought my Afghan translator would save his life by killing two Taliban fighters who were about to kill him. The Taliban retaliated by placing him on the top of its kill list.
updated 11:18 AM EDT, Thu July 17, 2014
Jeff Yang says an all-white cast of Asian characters in cartoonish costumes is racially offensive.
updated 9:24 PM EDT, Wed July 16, 2014
Gary Ginsberg says the late John F. Kennedy Jr.'s reaction to an event in 1995 summed up his character
updated 12:41 PM EDT, Wed July 16, 2014
Meg Urry says most falling space debris lands on the planet harmlessly and with no witnesses.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT