Scope of the Arizona Nonprofit Sector

Title

Nonprofit employment

6.4%

of Arizona workers are employed in the nonprofit sector

The nonprofit sector is a major employer in Arizona. Nonprofits employ six percent of the workers in the state, a total of 197,702 workers, as shown on the chart below.

Chart 2 shows the number of employees in the nonprofit sector as compared to major industries in Arizona. Hiring nearly as many workers as the manufacturing industry, nonprofit organizations combined represent the seventh largest job engine in Arizona.

Within major industries in Arizona, nonprofit organizations also provide a relevant share of total employment. Chart 3 shows that nearly 24 percent of organizations in the Health Care and Social Assistance industries belong to the nonprofit sectors. In the case of Education and Art and Recreation, 11 percent and 6.9 percent, respectively, of organizations in the industry are nonprofits.

Note that nonprofit institutions are not an industry, but a group of organizations making up a sector. The charts below highlights the importance of the nonprofit sector vs. major industries (e.g., retail trade, manufacturing). For Chart 2, employment data in nonprofits has been removed from the selected industries and has been grouped together under a category named 'nonprofit'. On the other hand, Chart 3 shows the share of nonprofits in top selected industries, in this case not removing nonprofits from the corresponding industries, for illustration purposes.

A growing sector

The nonprofit sector continues to demonstrate its contribution to the economy in Arizona.

As shown on the chart below, the number of workers employed by nonprofits increased by 13 percent from 2008 to 2017. On the other hand, the number of workers in the public sector declined by 5 percent while the private sector held even in the same period.

During the recession years between 2008 and 2009, employment in the private and government sectors decreased, whereas employment in nonprofits increased by five percent.

Employment by gender

The majority of workers in nonprofit organizations based in Arizona are women (65 percent), different from the for-profit sector where 44 percent of employees are female; in the case of government positions, 53 percent of employment was occupied by women in 2017.

The fact that the nonprofit sector is dominated by women spans across the country; however it is relevant to highlight that numbers look very different at leadership positions, particularly for larger organizations. The 2019 Nonprofit Compensation and Benefits Report released by the ASU Lodestar Center found that women lead 65% of responding organizations and far outnumber men as leaders of small-to-medium nonprofits. At the largest budget categories, men and women were equally represented, however.

Pay levels also show a significantly different behavior in Arizona nonprofit organizations as compared to for-profit or government entities. While the pay gap between male and female employees is over 20 percent in for-profit and government positions in Arizona, in the case of nonprofit organizations the gap is reduced to 12 percent: that is, median earnings of female nonprofit workers in 2017 were 88 percent of median earnings of male nonprofit workers. That is a small step backwards from our last Scope update, when the gap was 8 percent in 2012.

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