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What is the Nonprofit Sector?
Nonprofits are businesses that receive tax exempt status from the IRS (501c3) because they are doing work for the public good. The American nonprofit sector is comprised of charitable and advocacy organizations run by people trying to create a better world. Causes range from youth development, education, health, the environment and more. The common thread is the mission-driven nature of the work and the goal of making a positive social impact, locally, nationally, or internationally.
The American nonprofit sector:
- Employs More than 9% of the U.S. workforce
- Generates 8.3 percent of the nation’s wages and salaries
- Encompasses 1.4 million organizations
- Manages $3 trillion of the nation’s total assets
- Manages $1.4 trillion in annual revenues
- Produces 11% of the nation’s gross domestic product
The Connecticut Nonprofit Sector:
- Employs Nearly 10% of the Connecticut workforce, roughly 150,000 jobs. (That is more than the banking, finance, insurance and real estate sectors
combined.)
- Hartford County Hartford County nonprofits employ 40,000 Connecticut residents.
- Encompasses 11,000 organizations with 5,000 being the main employers of the sector
- Manages Over $60 billion in assets
National Employment Trend
The nonprofit sector needs seasoned professionals and Connecticut’s workforce is seasoned. National studies, most prominently Bridgespan’s The Nonprofit Sector’s Leadership Deficit, find that from now and through the year 2016—due to the loss of baby boomer professionals to retirement, a too-small youth-base (generation X & Y) to cover the management loss, and anticipated increase in social service demand due to an aging America—the national nonprofit sector is going to need seasoned professionals who bridge from the for-profit and government sectors to fill in the gap. Nationally, 640,000 new seasoned managers and professionals (e.g. accounting, development, marketing and program management) are going to be needed to enter the field.
Connecticut
Connecticut has a strong supply of seasoned professionals to fill that gap. Due to a lack of youth immigration into the state, and the exodus of youth from the state after they finish college, Connecticut has the 7th oldest (experienced) workforce population in the United States.
According to a Connecticut Commission on Aging report, by 2010, twenty percent of Connecticut’s workforce will be over age 55. The good news is that this senior workforce is the most educated and healthiest generation in America’s history, and a majority of this mature workforce is seeking purposeful community engagement and employment opportunities in their mid-career and traditional-retirement years—encore careers. Much of this purposeful work can be found in encore careers in the Connecticut nonprofit sector.
Greater Hartford Nonprofit Employment Trends
To compliment national data, the University of Connecticut Nonprofit Leadership Program in association with the Connecticut Association of Nonprofits and Capital Workforce Partners (the Greater Hartford Workforce Investment Board) pursued a localized assessment of the employment outlook and needs of the Greater Hartford area. In November of 2009, 183 nonprofit executive directors, members of the Connecticut Association of Nonprofits, whose offices reside in the Greater Hartford area were questioned about their hiring projections for paid managerial and professional positions over the next two years. Hiring could be for any purpose, including program expansion, management succession, and normal turnover. The survey received a 40% response rate.
Greater Hartford Nonprofit Employment Projection Results
Of those Greater Hartford nonprofits responding:
- 43% had laid-off personnel within the last two years. However,
- 77% expect to hire a managerial or specialized professional in the next year
- 85% in the next two years
*Total is over 100% due to hiring projections in multiple categories.
+/- 8.97% at the .05 level of significance
Employment Projection Detail
Of those 77% Greater Hartford nonprofits expecting to hire a white collar professional in the next year, here is the hiring breakdown:
- 67 % full-time
- 46 % part-time
- 58 % as a contracted consultant
*Total is over 100% due to hiring projections in multiple categories.
+/- 8.97% at the .05 level of significance
But What About Nonprofits Laying Off or Talks of Closings?
Like the private sector there have been major layoffs and fear of closures in the nonprofit sector. These are uncertain times for any sector of the economy. As the UConn study identified 43% of Greater Hartford nonprofits had laid off employees in the last two years. Many national reports predict consolidations and closure. Some predict a closure of over 100,000 nonprofit organizations over the next two years.
Connecticut research, such as recent reports from the United Way of Central and Northeastern Connecticut, Community Foundation of Greater New Haven and the Fairfield County Community Foundation note of nonprofits being dangerously close to insolvency and tapping or depleting reserve funds to stay afloat due to decreased funding in these sparse economic times.
But, for a sector that outpaces the private sector in growth a time of smart retrenchment may be healthy for the sector. Recent economic times have forced a darwinian efficacy on the sector, that in the end could lead to stronger surviving organizations that will hire, have stronger social impact, and higher pay and benefits for employees; due to focused philanthropic giving and grants to a remaining smaller pool of nonprofits. As we move into the next year and beyond surviving nonprofits will have to rehire and build. Bridgespan’s February, 2009 study, Finding Leaders for America’s Nonprofits still sees the nonprofit sector hiring and a big nonprofit sector managerial employment surge still coming up the pike.
Resources for Bridging Encore Careerists
What Do We Know About Bridgers and Encore Careerists?
Definitions
Bridger:
Bridger is a term made popular by Bridgestar to describe individuals who seek to move from one sector of employment to another (such as a corporate professional switching to a nonprofit occupation).
Encore Career:
An Encore career is a term made popular by Marc Freedman of Civic Ventures. It is used to describe work in the second half of life that combines continued income, greater meaning and social impact. These are paid positions often in public interest fields such as education, the environment, health, social services and other nonprofit fields.
Who Are Bridgers and Encore Careerists?
Leadership Greater Hartford’s 2003 study found that 80% of experienced professionals from the for-profit and public sectors they interviewed said they would consider work in a nonprofit organization. Civic Ventures’ 2008 Encore Career Survey: Americans Seek Meaningful Work in the Second Half of Life, found that 54% of people between the ages of 44 and 70 have already launched encore careers that combine income with social impact. Eighty percent of these encore careerists come from white collar careers.
Seventy-six percent of this workforce expects to keep working and earning a living well into their traditional retirement years in order to continue to have a steady income and health benefit source. Fifty-four percent of these aging boomers want to change jobs that give them a paycheck, but also provide a sense of personal purpose and the opportunity to give back to their communities and society in their second half of life.
How Do They Like Encore Careers?
Seventy-six percent of those already in encore careers say they do get the pay and benefits they need, and often the work-time flexibility they desire in their later years; allowing for part-time work to supplement retirement benefits.
Corporate professionals who move to the nonprofit sector often find:
- their work more exciting, rewarding and challenging than their previous position.
- the average salary gap between for-profit and nonprofit jobs is only 15% with some nonprofits paying higher salaries in industries where there is direct for-profit and
nonprofit competition.
- 84% say they experience strong satisfaction in their encore careers, with 94% saying they have seen positive results of their work making a difference in society.
What Do Employers Think of Hired Encore Workers
A 2008 Civic Ventures’ study of nonprofit employers who have hired encore careerists found that:
- 96% identify the experience an encore worker brings to the job as a benefit to their organization,
- 95% identify the commitment and reliability of an encore worker “at this stage in their work lives” as a benefit to their organization,
- 95% see encore workers as effective mentors to younger employees, and
- 89% overall find encore workers appealing as job candidates.
Connecticut nonprofit executive directors and human resource specialists who attended a forum convened by the University of Connecticut Nonprofit Leadership Program and Civic Ventures also expressed positives to employing encore careerists.
Bringing in Experience
Encore workers and mid-career sector switchers with transferable management and professional skill-sets were seen as very appealing, especially for nonprofits that do not have the funds to develop skill-sets internally. An example given was a prior for-profit accountant taking on a nonprofit accountancy management role. In this situation you would have highly transferable skill-sets that can be tailored to nonprofit accounting methods with likely minimal educational retraining. Many in the focus group mentioned they already have encore workers in leadership positions within their organizations and it has worked out wonderfully due to proper skill-set matching.
Potential to Reduce Costs and Turnover, While Increasing Productivity
It was noted that if nonprofits can attract encore workers for employment who place health benefits, job stability and flexibility at a higher priority level than salary, Connecticut nonprofits could potentially not increase payroll costs, while at the same time lowering turnover. While the current average age for professional development training ebbs at age forty; there is evidence of a higher rate of return for investment in education for the older worker, because they tend to stay longer on the job and in the company they train for than their younger counterparts. |
