Nonprofit organizations remain a cornerstone of New York’s economy, contributing over 1.3 million jobs and $96.8 billion in total wages, according to a recent report from State Comptroller Thomas P. DiNapoli. However, despite their economic significance, the state’s nonprofit sector has been shrinking since 2017, with declines in both the number of establishments and jobs, while the rest of the nation’s nonprofit sector has experienced growth.
The report highlights that nonprofits account for 5% of New York’s private sector establishments but provide more than 20% of private-sector jobs in several regions, with concentrations as high as one in four private-sector jobs in areas like the Southern Tier. Yet, employment in the sector has not rebounded since the pandemic, recovering only 7.4% of jobs lost between 2020 and 2022, compared to a fuller recovery in other states.
“Nonprofits provide essential services, from healthcare and education to social assistance and cultural programming,” said Comptroller DiNapoli. “However, persistent challenges, including delayed state contracts and lower wages compared to other sectors, are hampering their ability to fully recover and thrive.”
The report also reveals a wage disparity. While nonprofit wages in New York grew faster than those in other sectors between 2017 and 2022, they still lag behind private and public sector earnings. On average, nonprofit employees earned nearly 24% less than private-sector workers and 14% less than public-sector employees.
Health care and social assistance remain the largest nonprofit employment sector, representing 61.4% of nonprofit jobs in the state. Educational services follow closely behind, with private colleges and universities playing a significant role in employment and wage contributions.
Another critical issue highlighted is the persistent delay in processing state contracts with nonprofit organizations. In 2023, more than half of state contracts with nonprofits were executed late, causing delays in essential funding. These delays force nonprofits to rely on loans or cut back on services and staffing while waiting for state payments.
“Late contracts create financial instability and undermine the ability of nonprofits to deliver critical services to vulnerable populations,” the report states.
While New York’s nonprofit sector continues to play a vital role in supporting communities and driving economic growth, the report concludes that without improved funding mechanisms and greater wage parity, the sector may struggle to meet increasing demand for services in the years ahead.
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