Membership groups suffer job loss from recession

Nonprofit membership organizations in Indiana that count on members for voluntary and financial support have taken a big hit from the recent recession and recovery, a new report says.

Indiana membership nonprofits lost over 1,000 employees and over $15.6 million in payroll, adjusted for inflation, from 2007 to 2011, says “Indiana Nonprofit Employment: Historical Tends in Membership and Related Organizations, 1995-2011” from Indiana University and Johns Hopkins University.

Before the recession, membership groups grew, the report says, with employment at those organizations increasing 8 percent and inflation-adjusted payroll growing 32 percent from 1995 to 2011.

For that period, membership organizations employed 12 percent of all nonprofit employees in the state, on average, and paid 8 percent of all Indiana nonprofit payroll, on average.

Nonprofit membership groups face no for-profit competition because there are no for-profit membership groups, although nonprofit membership industry groups may compete with one another, particularly for members’ time and resources, the report says.

Within each of five membership-group industries — civic and social; business, professional, labor and political; grantmaking and giving services ; social advocacy; and religious — some charities vastly outperformed other nonprofits not registered with the IRS as 501(c)3 charities in growth in employment and payroll.

Employment from 1995 to 2011 grew by nearly half at charitable civic groups, for example, but fell by over a fourth at other civic nonprofits.

And the impact of the recession varies among industry groups.

While employment loss was minimal at grantmaking and social advocacy organizations, for example, jobs have declined steadily at business and professional organizations, which lost over 1,600 employees from 2000 to 2011.

 The report is a joint project of the School of Public and Environmental Affairs, Indiana Business Research Center at the Kelley School of Business, and Lilly School of Philanthropy, all at Indiana University, and the Center for Civil Society Studies at Johns Hopkins University.

Todd Cohen

Better communications seen as critical for nonprofits

Nonprofits are doing a poor job telling their story and need to improve their communications if they expect to survive in the face of serious threats to the social sector, a new report says.

Nonprofits believe government, the media and the general public do not understand the distinct values that make the social sector indispensable to society, and nonprofits also believe they need to communicate more effectively about their role and impact, says the report by the Listening Post Project of the Johns Hopkins Center for Civil Society Studies.

“Nonprofits are under assault today as perhaps never before, with consequences that could be profound for the future of these organizations and for those they serve, says the report, “What do nonprofits stand for?”

Half of over 750 nonprofits surveyed believe that “neither the general pubic nor government officials have a solid grasp of the nonprofit sector’s special qualities,” while over a third of survey respondents believe both the media and organizational funders are missing that information.

And nearly a quarter of respondents believe current and potential clients, customers, patrons and members are missing that information, says the report.

Sixty-two percent of respondents say the nonprofit sector does a poor job of articulating its special qualities to people outside the sector.

Nearly all nonprofits surveyed say improving their communications is important.

They also say undertaking a “serious, concerted and coordinated campaign to promote understanding of their core values” will require access to a range of resources.

Seventy percent say they need more resources for communications, 66 percent say they need to better understand how to measure their public benefit, and 65 percent say they need to better understand how to articulate their public benefit.

Better communication by nonprofits is particularly important in the face of an increasingly competitive marketplace that has created pressures that have pulled nonprofits “away from their historical modes of operation and from widespread widespread public assumptions about how nonprofits are supposed to operate,” the report says.

That volatile environment includes proposals to cap the federal tax deduction for charitable contributions as a common feature of budget-balancing measures “from both ends of the political spectrum,” the report says.

It also includes the imposition by a growing number of state and local governments of new taxes and other fees on nonprofits, and shifts in government payment methods that give advantages to for-profit businesses and have led to “significant loss of market share for nonprofits in a number of traditional nonprofit fields of activity.”

Nonprofits are “caught in a force field with powerful impulses pulling them simultaneously in different directions,” says the report, citing research by Lester Salamon, a co-author of the report and director the Center for Civil Society Studies.

Those impulses are pulling them “toward their voluntaristic past, toward greater professionalism, into expanded civic activism, and into deeper engagement with commercialism and the market,” the report says.

“While this movement toward a more commercial model has given nonprofits access to new funding streams and greater emphasis on efficiency, the resulting moving away from the most deeply held public conceptions of the sector has occasioned a series of challenges, including a key erosion of public trust,” it says.

And given the “enormous diversity of the nonprofit sector,” forging a consensus about the core values of the sector “poses an enormous challenge,” it says.

It is time for nonprofits, the Center for Civil Society Studies says, to “renew their value commitments and to develop the tools needed to communicate those values to the sector’s stakeholders in government, the public, and within the sector itself.”

Todd Cohen