Skip to main content

Look to nonprofit sector to create jobs

By Paul Schmitz, Special to CNN
October 19, 2012 -- Updated 1616 GMT (0016 HKT)
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
August 19, 2014 -- Updated 2203 GMT (0603 HKT)
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.
August 19, 2014 -- Updated 1424 GMT (2224 HKT)
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?
August 18, 2014 -- Updated 2152 GMT (0552 HKT)
Ruben Navarrette notes that this fall, minority students will outnumber white students at America's public schools.
August 19, 2014 -- Updated 2121 GMT (0521 HKT)
Humans have driven to extinction four marine mammal species in modern times. As you read this, we are on the brink of losing the fifth, write three experts.
August 19, 2014 -- Updated 1158 GMT (1958 HKT)
It's been ten days since Michael Brown was killed, and his family is still waiting for information from investigators about what happened to their young man, writes Mel Robbins
August 20, 2014 -- Updated 1354 GMT (2154 HKT)
Sally Kohn says the Ferguson protests reflect broader patterns of racial injustice across the country, from chronic police violence and abuse against black men to the persistent economic and social exclusion of communities of color.
August 18, 2014 -- Updated 1242 GMT (2042 HKT)
The former U.K. prime minister and current U.N. envoy says there are 500 days left to fulfill the Millennium Goals' promise to children.
August 18, 2014 -- Updated 1310 GMT (2110 HKT)
Julian Zelizer says the left mistrusts Clinton but there are ways she can win support from liberals in 2016
August 20, 2014 -- Updated 1359 GMT (2159 HKT)
Peter Bergen says the terror group is a huge threat in Iraq but only a potential one in the U.S.
August 16, 2014 -- Updated 1734 GMT (0134 HKT)
Mark O'Mara says the way cops, media, politicians and protesters have behaved since Michael Brown's shooting shows not all the right people have learned the right lessons
August 17, 2014 -- Updated 1523 GMT (2323 HKT)
Retired Lt. Gen. Mark Hertling says the American military advisers in Iraq are sizing up what needs to be done and recommending accordingly
August 15, 2014 -- Updated 1941 GMT (0341 HKT)
Marc Lamont Hill says the President's comments on the Michael Brown shooting ignored its racial implications
August 15, 2014 -- Updated 2146 GMT (0546 HKT)
Joe Stork says the catastrophe in northern Iraq continues, even though many religious minorities have fled to safety: ISIS forces -- intent on purging them -- still control the area where they lived
August 14, 2014 -- Updated 2226 GMT (0626 HKT)
Tim Lynch says Pentagon's policy of doling out military weapons to police forces is misguided and dangerous.
August 15, 2014 -- Updated 1315 GMT (2115 HKT)
S.E. Cupp says millennials want big ideas and rapid change; she talks to one of their number who serves in Congress
August 14, 2014 -- Updated 2357 GMT (0757 HKT)
Dorothy Brown says the power structure is dominated by whites in a town that is 68% black. Elected officials who sat by silently as chaos erupted after Michael Brown shooting should be voted out of office
August 14, 2014 -- Updated 1149 GMT (1949 HKT)
Bill Schmitz says the media and other adults should never explain suicide as a means of escaping pain. Robin Williams' tragic death offers a chance to educate about prevention
August 15, 2014 -- Updated 1505 GMT (2305 HKT)
Nafees Syed says President Obama should renew the quest to eliminate bias in the criminal justice system
August 14, 2014 -- Updated 2024 GMT (0424 HKT)
Eric Liu says what's unfolded in the Missouri town is a shocking violation of American constitutional rights and should be a wake-up call to all
August 13, 2014 -- Updated 1922 GMT (0322 HKT)
Neal Gabler says Lauren Bacall, a talent in her own right, will be defined by her marriage with the great actor Humphrey Bogart
August 15, 2014 -- Updated 1056 GMT (1856 HKT)
Bob Butler says the arrest of two journalists covering the Ferguson story is alarming
August 13, 2014 -- Updated 2035 GMT (0435 HKT)
Mark O'Mara says we all need to work together to make sure the tension between police and African-Americans doesn't result in more tragedies
August 18, 2014 -- Updated 2006 GMT (0406 HKT)
Pepper Schwartz asks why young women are so entranced with Kardashian, who's putting together a 352-page book of selfies
August 13, 2014 -- Updated 2308 GMT (0708 HKT)
Michael Friedman says depression does not discriminate, cannot be bargained with and shows no mercy.
August 12, 2014 -- Updated 1525 GMT (2325 HKT)
LZ Granderson says we must not surrender to apathy about the injustice faced by African Americans
ADVERTISEMENT