As the future of work faces disruption from artificial intelligence (AI) and automation, a question looms large: where will humans find purpose and empathy-driven work? The answer, increasingly, seems to lie within the nonprofit sector. As technology shifts the employment landscape and automates repetitive tasks, purpose-driven roles that focus on human connection and social impact are set to become more vital than ever. Nonprofits, which have long been at the forefront of purpose-driven missions, are emerging as beacons of stability, resilience, and empathy in the evolving economy.
In the age of automation, compassion is the nonprofit competitive edge. THIS is why nonprofits will paint the future purpose of work.
George Weiner, Chief Whaler
WholeWhale.com: A nonprofit digital agency
Steady Growth in Nonprofits Despite Economic Uncertainty
Recent data from the U.S. Bureau of Labor Statistics (BLS) underscores the rising prominence of the nonprofit sector in the economy. In 2022, over 300,000 nonprofit establishments provided 12.8 million jobs in the U.S., accounting for 9.9% of all private-sector employment. This share, which represents nearly 1 in every 10 private-sector jobs, illustrates the increasing relevance of nonprofits in the workforce. Unlike many industries that were adversely affected during the 2007-09 recession and other economic downturns, nonprofits have shown a remarkable pattern of resilience and growth.
Between 2007 and 2017, nonprofit employment grew at a consistent rate, even amid the economic turbulence of the Great Recession. In contrast, for-profit establishments saw declines in both the number of establishments and total employment during this period. This resilience highlights the sector’s role as a stabilizing force in the economy, driven by its focus on sectors like healthcare, social assistance, and education.
Nonprofits vs. For-Profits: Employment Size and Industry Focus
One of the most telling findings from the BLS data is that nonprofits tend to employ more workers per establishment than their for-profit counterparts. In 2017, the average nonprofit establishment had 42 employees, while the average for-profit establishment had just 12. This significant difference in employment size can be attributed to the sectors in which nonprofits concentrate their efforts—healthcare and social services, education, arts and culture—sectors where people are the backbone of operations.
By 2022, nonprofits continued this trend, with healthcare and education still dominating nonprofit employment. Over 67% of nonprofit jobs in 2022 were concentrated in the healthcare and social assistance sector, followed by education at 16%. This concentration reflects the sector’s focus on providing essential human services and educational opportunities, which are less likely to be automated and remain crucial to societal well-being.
Regional Leadership: The Role of States and Counties
The role of nonprofits varies widely by state and county, highlighting regional strengths and the importance of local initiatives. In 2022, the District of Columbia led the nation with 25.2% of its private-sector jobs provided by nonprofits. Other states like Vermont, Massachusetts, Maine, New York, and Rhode Island also had notably high shares, each with 17% or more of their private-sector workforce employed in nonprofit roles.
Source: BLS.gov Nonprofit Labor Statistics 2022
At the county level, Montour County in Pennsylvania stood out with a staggering 63.8% of private employment attributed to nonprofits. This is a clear demonstration of the deep integration of nonprofits within local economies, showing that in some regions, these organizations are the primary economic drivers and employers.
Why Nonprofits Are the Future of Work
- Empathy Can’t Be Automated: While AI can automate processes and data-driven tasks, it cannot replace genuine empathy and the human connection required in caregiving, advocacy, education, and social services. These qualities are inherent to the nonprofit sector’s mission-driven work, which prioritizes people and purpose over profits.
- A Beacon of Stability: During times of economic crisis, nonprofits have shown a resilience not seen in the for-profit sector. Nonprofit employment continued to grow steadily from 2007 to 2017, even as the for-profit sector saw fluctuations and setbacks. This pattern continued into 2022, reflecting the sector’s enduring strength.
- Purpose-Driven Opportunities: The modern workforce, especially the emerging generation of workers, increasingly values purpose over profit. According to a study by Deloitte, over 44% of millennials and 49% of Gen Z respondents reported that they made career choices based on their values. Nonprofits offer these workers an opportunity to contribute to causes they care about, bridging the gap between meaningful work and career growth.
- Investment in People, Not Profits: Nonprofits are uniquely structured to reinvest their earnings back into their missions, expanding services, programs, and employment. This reinvestment benefits communities and supports long-term social impact, unlike for-profit companies, which are often legally obligated to prioritize shareholder returns. By focusing on people and purpose, nonprofits create environments that foster growth, learning, and well-being for employees and communities alike. This emphasis on reinvestment aligns with the values of a purpose-driven workforce, making nonprofits a key pillar in the future of work.
The Call to Reduce Nonprofit Headwinds
If leaders want to protect and strengthen this promising future of work, it’s essential to address the labor headwinds faced by nonprofit employers. Rising costs of healthcare benefits and payroll taxes can strain nonprofit budgets, limiting their ability to expand and sustain purpose-driven jobs. By implementing targeted subsidies to alleviate healthcare costs and reducing payroll taxes for 501(c)(3) organizations, policymakers can help nonprofits continue to thrive and support millions of workers in essential sectors like healthcare, education, and social services.
These policy shifts would not only relieve financial pressures but also encourage the growth of nonprofit establishments, fostering an environment where purpose-driven organizations can better fulfill their missions. Supporting nonprofits in these ways ensures that the sector remains a key economic player, offering stable, empathetic, and meaningful employment opportunities in an increasingly automated world.
Leaders have a unique opportunity to safeguard this positive vision for the future of work by empowering the nonprofit sector. In doing so, they can help create a more resilient and purpose-driven workforce, securing a legacy of meaningful impact for generations to come.
