ATLANTA, Georgia (CNN) -- Kelley Mulfinger thought she would be making a six-figure salary in marketing by her second year out of school. Instead, the University of Virginia alum is teaching a classroom of first-graders how to spell words like "care."
Kelley Mulfinger says teaching has provided her with job security and a strong sense of purpose.
Mulfinger is one of many recent graduates who are turning to lower paying jobs with the help of national service organizations such as Teach for America as the conventional job market shrinks.
The 24-year-old signed on to become a teacher in Atlanta, Georgia, two years ago when she couldn't find a job that excited her.
Now, faced with even bleaker job prospects, she just renewed her contract.
Mulfinger says being a teacher means more to her than just having security.
"With the economy the way that it is, I look around and I see my peers losing their jobs or scared for their jobs and it's really made me reflect on my last two years and how much I've enjoyed the ability to make an impact every single day," she said. Watch Mulfinger talk about what teaching means to her »
Teach for America received a record number of more than 35,000 applications in 2009, up 42 percent from last year, spokeswoman Rhonda Stewart said.
Stewart attributes the increase in applicants to "a growing interest in public service" and "an economy that's encouraging people to re-evaluate and pursue meaningful careers where they can have an impact right out of college." See more stories from recent grads who are turning to national service »
Smaller nonprofits also appear to be benefiting from the sudden availability of skilled labor.
Jonathan Olinger, founder of Discover the Journey, a nonprofit that uses film to draw awareness to children living in crisis, said the economic downturn has proved to be an "odd but effective motivator" for people to turn to volunteerism.
"Highly skilled people who had been laid off from their jobs in the for-profit sector have been volunteering for us in their new-found time," he said. "[It's a] validating excuse to finally follow their passion, live a life of purpose and step into something larger than themselves through serving."
AmeriCorps, an independent federal agency that places adults in jobs with local and national nonprofit groups, also says it has seen a 400 percent increase in applications in the past four months.
Supporters of AmeriCorps say the experience provides job seekers with benefits including health care and money to help pay off student loans while they give back to their communities.
"National service is a cost-effective, empowering way for citizens to build an America they can be proud of," said former AmeriCorps volunteer Matt Wilhelm, who parlayed his stint as a volunteer into a full-time job with Calling All Crows, a nonprofit that uses the live musicians to promote human rights.
President Obama's call to service has buoyed nonprofits and service organizations, whose operating budgets have also suffered the effects of the shrinking economy.
Such organizations also stand to benefit significantly from legislation passed in the Senate and House to expand funding and incentives for national service programs.
The legislation will affect national service programs administered by the federal agency of the Corporation for National and Community Service, more than tripling the number of positions in the AmeriCorps program from 75,000 to 250,000, for one.
The legislation will also develop new positions in the areas of education, clean energy, health care and veteran affairs and create more financial incentives for potential applicants.
The bill -- recently renamed The Edward M. Kennedy Serve America Act -- passed the House by a vote of 275-149 on Tuesday.
It is awaiting approval from Obama, who has vowed to sign it.
Democrats supported it almost unanimously; a strong majority of Republicans were opposed. Critics contend the bill is fiscally irresponsible in light of the current economic downturn. They also argue that the concept of volunteerism is undermined by providing financial compensation for community service.
"With the enactment of the landmark Edward M. Kennedy Serve America Act legislation, millions of Americans of all ages will be able to serve to address their local community's most pressing needs," said Michelle Nunn, CEO of the Points of Light Institute and co-founder of the HandsOn Network, an organization that connects people with volunteer and paid opportunities in community service nationwide.
"The Volunteer Generation Fund provision of this new law will open pathways for organizations like HandsOn Network to apply for funds to train, equip and mobilize our greatest national resource -- our volunteers."
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