Data on nonprofit workforce composition provide nonprofit leaders with indicators of the potential impacts of ongoing and novel trends on staff, and identify the need and opportunities for action, but access to timely wage and employment data is a persistent issue. This complicates efforts of sector leaders and policymakers to respond in real time to economic conditions, natural disasters, and other factors affecting the communities they serve.

This year, in response to widespread concerns about workforce issues among our members and across the sector, Independent Sector announced the creation of its Center of Excellence on the Nonprofit Workforce. The center will engage the sector and its experts to develop research, policy, and practices that address the challenges facing the nonprofit workforce, mobilize nonprofit and philanthropic leaders to implement these solutions, and measure the change in the health of the workforce over time.

Nonprofits Are One of the Nation’s Largest Employers, but Tracking Employment and Job Losses in the Sector Is Difficult

Data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages show that in 2022 nonprofits were the third-largest employer in the private workforce; more people worked for nonprofits than in manufacturing, see Figure 9 (U.S. Bureau of Labor Statistics, 2024). However, these nonprofit statistics — estimating that about 12.8 million people work in the U.S. nonprofit sector — are only updated by the Bureau of Labor Statistics every five years, and the data may exclude the smallest employers. More frequently-released household survey data like that from the U.S. Census Bureau’s American Community Survey have found that over 14 million people worked for nonprofits in 2023 (Independent Sector & United for ALICE, 2025).

Different data sources have different strengths and weaknesses, but all available data show that nonprofits are a major employer. In nine states and the District of Columbia, nonprofits employ more than 15% of the private workforce, see Figure 10 (Newhouse & Abramson, 2025).

This year, many nonprofit organizations — as well as other employers — have been directly impacted by government spending freezes and disruptions and in response have laid off workers or prepared to do so. However, comprehensive data on layoffs in the nonprofit sector are unavailable. The Chronicle of Philanthropy has tracked over 22,000 layoffs at nonprofit organizations between January and June of 2025, but believes this to be a significant underestimate due to limited data (Straus et al., 2025). The Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics provides estimates of layoffs and discharges monthly by industry but not by nonprofit status (U.S. Bureau of Labor Statistics, 2025). JOLTS data suggest that layoffs across all private industry in the U.S. in the first eight months of 2025 were about 5% greater than in the first eight months of 2024, while job openings during the same period were about 5% lower.

Nonprofit Workers Are Disproportionately Women and More Educated Than Average

Workers at nonprofit organizations can have the same jobs as workers at for-profit employers: administrative assistants, janitors, cashiers (e.g., at Goodwill stores), or bank tellers (e.g., at credit unions). The nonprofit workforce includes many workers in the health care and education industries, as well as in social assistance, religious organizations, civic organizations, and others. The nonprofit sector employs more women (66% of the nonprofit workforce) than are employed in the workforce as a whole (47%), and 72% of nonprofit workers hold a college degree, compared to 52% of all workers (IPUMS Current Population Survey, 2025). Hispanic workers are underrepresented in the nonprofit sector (11%) relative to the economy overall (17%).

One in Five Nonprofit Workers Live in Households Experiencing Financial Hardship

As part of our ongoing partnership, Independent Sector and United For ALICE updated our analysis of economic hardship within the nonprofit workforce and shared the data as an interactive dashboard. We also entered a new partnership with the Black Wealth Data Center that highlights the need for race-disaggregated data and a framework for financial health for nonprofit workers that goes beyond making ends meet to focus on how workers create wealth and savings for long-term financial security.

We encourage you to explore the data on financial insecurity in the nonprofit workforce on our dashboard and we also highlight some findings here.

In 2023, more than 3 million nonprofit workers (22% of the workforce) did not have incomes high enough to afford household expenses (Independent Sector and United for ALICE, 2025). Black, Hispanic, and American Indian workers in the sector were significantly more likely to struggle to make ends meet, as were workers with disabilities.

Across the major industries within the nonprofit sector, workers in the education and medical industries had the lowest rates of financial insecurity while workers in the arts, recreation, and social assistance industries had the highest rates. More than one-quarter (27%) of nonprofit workers outside the education and medical industries did not have incomes high enough to afford household expenses (Independent Sector & United for ALICE, 2025).

In a survey, just 41% of nonprofit organizations said they believe they pay all staff members a living wage. Most organizations identified inflation and other rising costs as a key challenge to paying staff a living wage (Nonprofit Finance Fund, 2025).

Many Nonprofits Struggle to Employ Enough Staff, Provide Comprehensive Benefits

When asked about management challenges, most nonprofit organizations identified employing enough staff to do programmatic and administrative work and finding staff with the right skill sets as obstacles, and frequently mentioned burnout.

These survey data align with anecdotes and input provided to Independent Sector leadership and staff at 2024 listening sessions and in 2025 focus groups on the nonprofit workforce: Resource limitations make it difficult to employ enough staff, leading to higher workloads and proportionally higher levels of stress and burnout.

Though most nonprofit organizations (68%) expect demand for their services to increase in the next year, and few (5%) expect demand to decrease, more than one-quarter (28%) of organizations say they expect to decrease staff capacity in some way over the next year (Urban Institute, 2025d). Many organizations also report current vacancies: more than one in ten (11%) of organizations surveyed say they have at least 21% of their staff positions vacant, and nearly half (44%) say that staff vacancies had a negative impact on their operations this year (Urban Institute, 2025d).

One area of both difficulty and opportunity for nonprofit organizations is job benefits. Some organizations, especially small organizations, struggle to provide benefits: According to Nonprofit Finance Fund’s survey data, two-thirds of nonprofits say they provide health insurance, but that number was much lower (12%) at organizations with budgets of less than $250,000 (Nonprofit Finance Fund, 2025). At the same time, some larger nonprofits enjoy a reputation for generous benefits relative to the for-profit sector, making this issue one where there is substantial variability across the sector.

When asked about whether the benefits they provide impact staff recruitment, 25% of nonprofit organizations say their recruitment is negatively impacted and 40% report a positive impact. Unsurprisingly, the benefits offered by organizations who say their benefits package helps them recruit staff are more generous than for the sector as a whole, and much more generous than at organizations that report their benefits package harms recruitment.

Paid vacation and sick time are common throughout the sector, but health benefits show some of the widest variation: 76% of nonprofit organizations who say their benefits help their recruitment offer health insurance, compared to just 18% of those who say the benefits they offer harm recruitment (Urban Institute, 2025d).

Volunteers Are a Critical Part of Many Nonprofits’ Strategies

Though volunteers usually cannot replace professional staff, many organizations rely on them to fill various important roles. Three in four (75%) nonprofit organizations say that volunteers are important to their operations — they rely on volunteers for several key tasks (23%), a wide range of tasks are done by volunteers (29%), or they depend entirely on volunteers (23%; Urban Institute, 2025c) (See Figure 18.) A nationally representative survey by Independent Sector found that about half of Americans say they’ve volunteered in the past year (Independent Sector & Edelman DXI, 2024). Independent Sector and the Do Good Institute estimate that the average value of an hour of volunteer time was $34.79 in 2024 (Independent Sector & Do Good Institute, 2025). AmeriCorps estimates that nearly 5 billion hours were volunteered in 2023, suggesting a total value of volunteer time in the U.S. of over $167 billion (Schlachter & Marshall, 2024).

However, formal volunteering for organizations has decreased in recent years. The beginning of the COVID-19 pandemic disrupted volunteering, creating a significant reduction early in the pandemic. Although volunteering rebounded afterward, fewer people reported formal volunteering in 2023 (28%) than in 2017 or 2019 (30%), and those people also volunteered fewer hours (Schlachter & Marshall, 2024). Organizational memberships also decreased, though informal helping increased. These findings suggest a decrease in involvement with organizations and associations.

Because volunteerism is closely tied to other forms of involvement with nonprofit organizations, it is important for organizations that work with volunteers to do so strategically, building capacity and structures to engage volunteers meaningfully.

Independent Sector has built a program on strategic volunteer engagement and is working to develop practical insights and tools that can help both operating nonprofits and their funders better harness the power of volunteers.

Take Action

Nonprofit employers can support their workers with benefits that build long-term financial security. Independent Sector is urging legislators to provide nonprofit employers with access to the same tax incentives that for-profit businesses receive to provide child care, retirement plans, paid family and medical leave, and more. Bipartisan legislation has been introduced in both chambers of Congress that would give small nonprofits the same tax incentives to start a retirement plan that for-profit businesses currently receive. Workers shouldn’t have to choose between pursuing mission-driven work and knowing they can retire securely. Urge your legislators to cosponsor the Small Nonprofit Retirement Security Act today.

The Department of Education recently published a final rule making significant changes to the Public Service Loan Forgiveness (PSLF) program, potentially reshaping how nonprofit employers are treated under the law (U.S. Department of Education, 2025). Independent Sector submitted detailed comments opposing the rule and is tracking the latest legal challenges to the rule’s implementation.