Arizona Nonprofits: Economic Power, Positive Impact

A recent statewide study examined the economic impact of Arizona’s nonprofit sector, the results of which were published in a report titled “Arizona Nonprofits: Economic Power, Positive Impact”. In the May 2016 issue of In Business Magazine, we reported on the direct financial impact of more than $22 billion the nonprofit sector has on the state economy.

So how many people are actually employed in and because of the nonprofit sector? It turns out that when you exclude state and local government jobs, nonprofits are Arizona’s 5th largest employer, responsible for 325,000 jobs. They directly employ 167,000 paid staff and are also responsible for an additional 158,000 indirect/induced jobs through their presence and operations in Arizona. Those jobs represent 7.7% of total direct non-government employment in Arizona.

This research confirms that the nonprofit sector makes a valuable contribution to Arizona wages. Arizona’s nonprofit sector as a whole paid $7.7 billion in direct wages in 2014, representing 6.1% of Arizona’s total wages and salaries. When the direct, indirect, and induced labor income impacts are added, nonprofits are responsible for an estimated 11% of Arizona’s total wages and salaries.

And those nonprofit wages are increasing too, as the sector continues to grow. Arizona nonprofit employment grew by 12% during the 2009-2014 five-year time horizon, and total nonprofit wages in Arizona grew by 12.7% during the same period. The largest five-year nonprofit employment growth rates are in the educational, environment and animal welfare, and other health sectors.

The research was conducted by ASU’s Seidman Research Institute in partnership with the Alliance of Arizona Nonprofits, ASU Lodestar Center for Philanthropy & Nonprofit Innovation and The Phoenix Philanthropy Group. Funding was provided by the Arizona Community Foundation, APS and the Industrial Development Authority of Maricopa County. To download a free copy of the report.

Comparison of Nonprofit Employment to Select Arizona Non-Government Sectors, 2014

Numbers of jobs, rounded to thousands.

1. Retail Trade 312,000
2. Accommodation & Food Services 248,000
3. Healthcare & Social Assistance* 237,000
4. Administrative & Waste Management Services 224,000
5. Nonprofits** 167,000
6. Manufacturing 156,000
7. Finance & Insurance 135,000
8. Construction 125,000
9. Wholesale Trade 93,000
10. Transportation, Warehousing, & Utilities 84,000
11. Education* 49,000
12. Real Estate, Rental & Leasing 48,000
13. Management of Companies & Enterprises 30,000
14. Agriculture, Forestry, Fishing, & Hunting 25,000
15. Mining, Quarrying, Oil & Gas Extraction 13,000

* Excludes Nonprofits
** Includes Healthcare and Education Nonprofits
Source: QCEW, 2014 annual average employment for private industries

Carl Jimenez is the Communications Manager of Alliance of Arizona Nonprofits