The Massachusetts Nonprofit Sector: An Economic Overview

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The Massachusetts Nonprofit SectorAn Economic
Overview
2005 Associated Grant Makers Nonprofit Partners
Meeting
Ian Bowles,MassINC
John Hancock Conference Center September 16, 2005
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Todays Presentation

• The changing demographics of Massachusetts
• Domestic migration
• An aging workforce
• Growing ranks of immigrants
• The Massachusetts Labor Force Overview
• Nonprofits in Massachusetts
• Employment characteristics
• Financial resources
• Size and program area
• Geographic distribution
• Implications

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Domestic Migration

• Between 1990 and 2002, leaving aside
  international immigration, Massachusetts lost
  213,000 more residents than it gained from the
  other U.S. states.
• The trend has accelerated from 2002 to 2004, net
  domestic migration out of the Bay State exceeded
  100,000 residents.

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Domestic Migration
Migrants are younger, better educated, and less
likely to have been born in Massachusetts than
non-migrants.
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The Aging Workforce

• In 2000, Massachusetts was the 12th oldest state
  in the nation, with 13.5 of residents older than
  65. That number will jump to more than 18 by
  2025.
• The Commonwealths two oldest counties
  Barnstable and Berkshire both have a larger
  share of seniors than Florida.
  
• The 1.87 million baby boomers in Massachusetts
  those born between 1946 and 1964 will begin
  retiring in less than 5 years.

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The Aging Workforce

• A decline of prime-age workers means that all of
  the growth in the Massachusetts labor force will
  come from older workers. This leaves open the
  potential for labor shortages in the future.

Massachusetts Population, 1980-2025, by selected
age group
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The Changing Face of Massachusetts

• As of 2004, 14.3 of Massachusetts residents
  (906,866) were born in another country, a large
  increase from 1980 when 9.4 of the population
  was foreign-born.
• From 2000 to 2004, 172,054 new immigrants entered
  the Bay State. Without these immigrants, the
  population of Massachusetts would have shrunk.
  
• Since 2000, the states labor force is estimated
  to have grown by less than 1. Without
  immigrants, it would have shrunk.
  
• Between 1980 and 2004, the share of immigrants in
  our labor force nearly doubled from 8.8 to 17.0.

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The Changing Face of Massachusetts

• On average, an immigrant who primarily speaks
  English earned 2.5 times as much as an immigrant
  who did not speak English well.

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Demographic Implications
Massachusetts labor markets could face labor
shortages as the number of people under 55 is
projected to decline in absolute terms between
2010 and 2025. Native-born, middle-class famil
ies are migrating in increasing numbers to other
New England States, most notably to New
Hampshire. The availability of high-quality job
s does not guarantee that there will be enough
skilled workers to fill them. Even at our
economys peak, Massachusetts, on net, was not
able to attract workers to our state.
Between 1980 and 2004, the share of immigrants i
n our labor force nearly doubled from 8.8 to
17.0. Without immigrants the states labor force
would have shrunk. Seventy-one percent of adult
immigrants in Massachusetts are not prepared for
the knowledge economy.
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The Massachusetts Labor Force Overview
During the last ten years the working age
population in Massachusetts has grown from 4.7
million to 5.0 million and the labor force from
3.2 million to 3.3 million. At the same time em
ployment has increased from 3.0 million to 3.2
million. The Massachusetts unemployment rate ha
s consistently been below the national rate
during this period.
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The Massachusetts Labor Force
In 2003, the nonprofit sector employed 420,671
workers more than federal, state, and local
government combined. Private firms, both nonprof
it and for-profit, employed 2,739,687 people in
2003. Nonprofits accounted for 15 of all private
employment.
Distribution of Employment in MA by Ownership
Sector, 2003
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The Massachusetts Labor Force
Between 2000 and 2003, the states total
workforce fell by 4.1 (3,275,104 to 3,142,281).
Apart from nonprofits, the only other sector to
see any rise in employment was local government,
where employment rose by 0.4 - less than 1,000
people. The number of workers employed by state
government fell by 1.7, federal government by
9.3, and total private employment fell by 4.4.
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Nonprofits in the Massachusetts Economy
Massachusetts nonprofits employ 420,671 workers
or 13.4 of the state workforce, nearly twice the
national rate of 6.9. Massachusetts ranks first
among large industrial states and fourth among
all states on this measure. The states nonprofit
sector is larger than most industries and
employs more people than the entire public
sector.
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Nonprofits in the Massachusetts Economy

• Nonprofit employment grew by 8.6 from 2000 to
  2003, while the states overall employment
  declined by 4.1.
  
• Nonprofit jobs are concentrated in our signature
  industries of health care and education.

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Nonprofits in the Massachusetts Economy

• Boston and a handful of surrounding
  municipalities Cambridge, Newton, Somerville,
  and Brookline account for over one-quarter of
  the states nonprofit workforce, but only 15 of
  the states population.
• As a share of the local population, the nonprofit
  workforce is extremely important in both the
  Pioneer Valley and the Berkshires.

Below 10.5
10.5 to 15
More than 15
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Nonprofits in the Massachusetts Economy

• Compared with the overall workforce, nonprofit
  workers are more likely to
  
• Hold a bachelors degree (57 vs. 37).
• Hold a professional or managerial job (67 vs.
  41).
  
• Be female (66 vs. 48).
• Be older (median age of 41 years vs. 39 years).
• Hail from out of state (48 vs. 39).

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Nonprofits in the Massachusetts Economy

• Age
• Young organizations outnumber old.
• Nearly three-fourths of organizations are 25
  years old or younger, and over half were founded
  since 1990.
  
• Size
• The vast majority of nonprofits operate with
  modest resources.
  
• 61 report annual income under 250,000.
• Program Area
• A broad mix of programs.
• All program areas are
• growing, especially
• religious and spiritual
• organizations.

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Nonprofits in the Massachusetts Economy

• Financial resources of nonprofits are highly
  concentrated by organization size and program
  area.
  
• The resources of education and health care
  nonprofits outpace other program areas.

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Conclusion An Economic Engine for the Bay State

• The nonprofit sector is a critical contributor to
  the Bay States quality of life. Its size, its
  growth, and its highly skilled workers underscore
  its contributions to the economic health and
  competitiveness of the Commonwealth.
• From 2000 to 2003 nonprofit employment grew by 9
  while all other employment fell by 4.
  
• Nonprofit employment is heavily concentrated in
  areas of key competitive advantage for
  Massachusetts and as a major employer in key
  fields like health care, education, and the
  knowledge sector, the sector is an important
  source of middle-class jobs.
• Our nonprofit workforce is highly skilled, with
  an abundance of college graduates in professional
  and managerial occupations. Nonprofits also
  appear to be more successful than other types of
  businesses at attracting these talented workers
  from other states.