Indiana’s social assistance industry has more than doubled in size since 1995 to reach almost 60,000 paid employees in 2018. However, less than half of those now work for nonprofit organizations, down from about 70% prior to 2005, according to a new Indiana University report.
The report, Nonprofit Paid Employment in Social Assistance: Update Report, Indiana 1995-2018, uses data from the Quarterly Census of Employment and Wages (QCEW) prepared by the Indiana Business Research Center (IBRC) and analyzed by the Indiana Nonprofits Project.
Social assistance employees provide key services that support Indiana families and help them meet their life challenges. They provide child day care, employment training, counseling, disaster response, and other relief services.
The report’s findings show that nonprofit paid employment in social assistance has grown during the 24-year period – up by almost 50%, especially prior to 2003. However, for-profit employment in the social assistance industry has grown much more rapidly and almost quadrupled over that period, with most of the growth occurring after 2005.
Nonprofit paid employment shows distinctly different profiles in four social assistance subindustries over the 1995-2018 period. Nonprofits have:
- lost market share relative to for-profits in the rapidly growing individual and family services subindustry,
- maintained their relatively small share in the slowly growing child day care services,
- lost some of their dominance in the overall stable vocational rehabilitation services, and
- increased their strong dominance in the growing community food, housing and emergency services subindustries.
“While our data do not allow us to document with certainty why these shifts have occurred, it is likely that nonprofit social assistance providers target their services more explicitly to low-income Hoosiers than do their for-profit counterparts, so the shifts we are seeing raise concerns about the continued availability of affordable social assistance services in lower-income communities,” said Kirsten Grønbjerg, Distinguished Professor of Public Affairs at the IU O’Neill School of Public and Environmental Affairs and Efroymson Chair in Philanthropy at the IU Lilly Family School of Philanthropy at IUPUI. Grønbjerg directs the Indiana Nonprofits Project.
At the same time, the Tax Cuts and Jobs Act of 2017 has reduced tax incentives for middle- and lower-income families to make charitable contributions, and research has shown that wealthy donors give disproportionately to causes other than human services. “It is too early to know how this policy change will affect nonprofit social assistance providers in Indiana,” Grønbjerg noted, “but they depend on charitable contributions to help keep their services affordable.”
About the briefing
This briefing is the twelfth report in the Indiana Nonprofit Employment series produced by the Indiana Nonprofit Sector: Scope and Community Dimensions project. The project is designed to inform local community leaders and policymakers. The analysis is a joint effort of the O’Neill School of Public and Environmental Affairs, the Lilly Family School of Philanthropy and the Indiana Business Research Center. The briefing's co-authors are the director of the project, Kirsten Grønbjerg, and research assistant and IU undergraduate student Anjali Bhatt.
About the O’Neill School of Public and Environmental Affairs
The O’Neill School is a world leader in public and environmental affairs and is the largest school of public administration and public policy in the United States. In the 2019 "Best Graduate Public Affairs Programs" by U.S. News & World Report, the O'Neill School ranks first in the country. Four of its specialty programs are ranked in the top-five listings, including nonprofit management, ranked first.
About the Lilly Family School of Philanthropy
The Indiana University Lilly Family School of Philanthropy at IUPUI is dedicated to improving philanthropy to improve the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The school offers a comprehensive approach to philanthropy through its academic, research and international programs and through The Fund Raising School, Lake Institute on Faith & Giving, Mays Family Institute on Diverse Philanthropy and the Women's Philanthropy Institute.
About the Indiana Business Research Center
The Indiana Business Research Center is an integral unit in the Kelley School of Business at Indiana University. Established in 1925, the IBRC provides and interprets the economic information needed by the state’s business, government and nonprofit organizations, as well as users of such information throughout the nation. The IBRC powers its research (and others) with its vast databases on numerous topics including income, employment, taxes, and a host of other economic indicators for the nation, the state and local areas. In addition, the Center conducts original research to generate needed information when existing data are not available or sufficient.