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A new analysis from the Schar School of Policy and Government at George Mason University positions charitable nonprofits not only as mission-driven service providers but also as a formidable force in the American labor market. Drawing on data from three separate studies of the nonprofit workforce, the Schar School’s research shows that nonprofits have emerged as one of the top three nongovernmental employers in the country, reclaiming much of the ground lost during the COVID-19 pandemic.
This research comes from the Schar School’s Center on Nonprofits, Philanthropy, and Social Enterprise. With support from the Charles Stewart Mott Foundation, the center has produced a detailed series of reports and developed interactive data resources through its Nonprofit Employment Data (NED) project.
Led by director Alan Abramson, along with faculty researchers Mirae Kim and Stefan Toepler (all with the Schar School), and project consultant Chelsea Newhouse, the center’s 2025 report, “Nonprofit Employment in the States, 2017–2022,” utilizes the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages. This authoritative study charts the nonprofit sector’s employment trajectory from early pandemic losses to its post-pandemic rebound.
An Economic Powerhouse
The report emphasizes that nonprofits are one of the nation’s largest employers. As of 2022, U.S. nonprofits employed 12.8 million paid workers, representing 9.9 percent of the private (nongovernmental) workforce. This makes the sector a critical driver of jobs and economic stability nationwide.
“Our team at George Mason is pleased to be able to help shed light on this important sector of our society,” Abramson said. “While many Americans know that nonprofits provide important services in our communities, few see the full picture of the sector’s significant presence in our economy.”
“Too often, people think nonprofits are just volunteers helping out,” said Kim. “In reality, they’re major employers and economic drivers—encompassing far more than food banks or community centers.”
Regional Highlights: D.C. and New England Lead the Way
The Schar School’s research also highlights significant regional disparities in nonprofit employment. Washington, D.C., tops the list, with one in four private workers employed by a nonprofit. Vermont (20 percent) and Massachusetts (18 percent) follow close behind.
“Of course,” warns Abramson, “with the Trump administration’s targeting of the activities and funding of many nonprofits, many of these organizations in Washington and elsewhere have already taken a hit to their budgets and workforce.”
He added that these challenges may not shift the regional balance. “At the same time, an advocacy presence in the nation’s capital seems more important than ever for nonprofits seeking to preserve their partnerships with the federal government,” Abramson explained.
The potential impact is national in scope. “Slashing federal grants would deal a devastating blow to the sector overall,” adds Kim.
The new report makes these regional nuances easier to identify through the launch of interactive tools. The Schar School’s NED website now hosts Nonprofit Works, an online data explorer, along with data dashboards that allow users to examine nonprofit metrics across states, counties, and metro areas—and even compare them with government and corporate employment numbers. These digital resources build on the legacy of Johns Hopkins University’s Center for Civil Society Studies and position George Mason as a new national hub for nonprofit workforce data and analysis.
Recovery, Wages, and Ongoing Challenges
The pandemic years took a toll on nonprofits. In 2020, the sector lost roughly 580,000 jobs—a 4.5 percent decline—though the impact was less severe than the losses experienced by for-profit businesses. While for-profit employment rebounded more quickly, nonprofits steadily regained ground, adding approximately 277,500 net new positions by 2022 compared to 2017 levels. Wages also rose sharply during this period: between 2017 and 2022, average annual earnings in the nonprofit sector increased by 27.4 percent, narrowing the pay gap with for-profit employers to about 97 cents on the dollar.
Yet despite these gains, nonprofits still trail for-profits in their pace of recovery. By 2022, nonprofit employment remained about 1.4 percent below 2019 levels, while for-profit jobs had grown by 2.2 percent. Adding to the pressure, nonprofits face funding uncertainties and a volatile policy environment that threaten long-term stability.
“Nonprofits obviously need to be mindful of the changing policy and funding environment and take appropriate steps,” said Abramson. “Those may involve a mix of increased advocacy, identification and implementation of new operating efficiencies, greater collaboration with other nonprofits, and prudent cutbacks when necessary.”
Looking Ahead: Nonprofits as Economic and Civic Anchors
The Schar School’s research offers a clear picture: Nonprofits are not only mission-driven—they are economic anchors, employing millions, paying competitive wages, and demonstrating resilience in times of crisis. At the same time, their slower recovery compared to for-profits and ongoing financial uncertainties highlight the need for continued support from policymakers and philanthropists.
With its new data resources, George Mason’s Schar School provides policymakers, researchers, and nonprofit leaders with vital tools to track, understand, and strengthen the sector’s role in the economy—particularly in hubs like Washington, D.C., where nonprofits form an outsized share of private employment.
“As our work to deepen understanding of the nonprofit sector continues, we look forward to partnering with those in the many institutions—government, corporations, the media, and the nonprofit sector itself—that have a stake in the health of this important, yet often overlooked, sector of our society,” said Abramson.