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University of Iowa News Release

 

April 3, 2007

UI Report Finds Nonprofits Employ Nearly 9 Percent Of Iowa's Workers

Charitable nonprofit organizations employed nearly 9 percent of Iowa's workers in 2005, and those workers earned nearly 8 percent of the state's wages, according to a new study co-authored by the University of Iowa College of Law's Larned A. Waterman Iowa Nonprofit Resource Center.

The study, which measured the economic impact of nonprofit charitable organizations in Iowa, also found those organizations had more than $8 billion in annual expenditures in 2004 and held more than $20 billion in assets. The Iowa Department of Economic Development conducted the study with the INRC.

"Charitable nonprofit organizations are a vital element in maintaining Iowa's quality of life, and this study shows they make up a significant sector of our economy as well," said Richard Koontz, director of the INRC. "It's important for the state's political and economic development leaders to know how important nonprofit organizations are to the Iowa economy and take that into account during their planning."

The report was commissioned to measure the contributions of Iowa's nonprofit organizations to the state's community and economic development. The INRC and the Iowa Department of Economic Development developed the report with support from the UI Office of the Vice President for Research.

The report also found that nonprofit charitable organizations are the fifth largest industry group in the state in terms of number of workers, behind only trade, government, manufacturing and education/health services. More than 128,500 Iowans worked for charitable nonprofits in 2005, an increase of 4.7 percent over the 122,600 jobs in 2001. Most of those jobs are in organizations providing health care and social assistance (94,000), followed by education (21,000).

The report also found that in 2005, charitable nonprofit employees earned $3.7 billion in wages, up 22 percent from $3 billion 2001. During the same four-year period, wages paid by for-profit businesses rose 16 percent, to $36 billion, and by government rose 12 percent, to $8 billion.

Spending by nonprofit charities also pumped $8.3 billion into the Iowa economy in 2004 while the organizations amassed $9.1 billion in revenues, the researchers found.

But researchers point out that most of this impact comes in fairly small amounts, as 47 percent of Iowa's charities have annual expenditures of less than $100,000. Only 26 percent have annual expenditures of more than $1 million.

"The economic impact of each individual charity is small, but when you add it up, it becomes significant," said Jill Smith, an INRC researcher who worked on the study. "But even more important is the overall impact nonprofit organizations make on the character of our communities. These organizations make our communities better places to live, which makes it easier to attract new businesses and new people to the state and to keep what we already have."

Koontz said the INRC report did not attempt to place an economic value on the number of hours that Iowans volunteer, though he said that impact is significant. He cited a study released last year by the Corporation for National and Community Service that found 39 percent of Iowans volunteer more than 99 million hours of service, estimating that work to have an economic value of $1.8 billion.

However, while Iowans are generous with their time, they tend to be less so with their financial resources. Koontz said studies have shown that while Iowa is one of the top states for volunteer hours, it's one of the lowest states for financial contributions. One of the INRC's goals in the coming years, he said, is to find out why and to develop ways to encourage Iowans to provide more financial help to their nonprofit organizations.

The report is part of a larger effort by the Iowa Governor's Task Force on The Role of Charitable Nonprofit Organizations in Iowa to "assess the present and potential role of Iowa's Nonprofit Sector in advancing the vitality of communities throughout the state."

Principal authors of the study were Smith, and Catherine Bierling and Michael Miller at the IDED. The report utilizes information obtained from Iowa Workforce Development and the Urban Institute's National Center for Charitable Statistics. "The Impact of Charitable Nonprofit Organizations on Iowa's Economy and Quality of Life" is available on the Larned A. Waterman Iowa Nonprofit Resource Center Web site at http://nonprofit.law.uiowa.edu and the Iowa Department of Economic Development Web site at http://www.iowalifechanging.com/nonprofit.

The UI is committed to helping to strengthen the nonprofit and charitable sector in the state of Iowa. The UI's Larned A. Waterman Iowa Nonprofit Resource Center provides management consulting services to the state's nonprofit organizations and also worked with the Governor's Task Force on Charitable Nonprofit Organizations to create the Iowa Principles and Practices of Charitable Nonprofit Excellence.

STORY SOURCE: University of Iowa News Service, 300 Plaza Centre One, Suite 371, Iowa City, Iowa 52242-2500.

MEDIA CONTACT: Tom Snee, 319-384-0010, tom-snee@uiowa.edu.