Survey indicates U.S. nonprofit sector to expand in 2016

Charitable giving rebounds from recession

Charitable giving in the U.S. has rebounded from the effects of the recession and the nonprofit sector is expected to grow in 2016, according to the results of a national survey released Thursday.

The 2016 Nonprofit Employment Practices Survey, published by Nonprofit HR in partnership with Guidestar, is an analysis of information collected from 443 nonprofits about staffing, recruitment and retention practices.

“This year’s survey reflects continued growth in the nonprofit sector over the past year and moving forward,” the survey reads. “The percentage of nonprofits that reported increasing staff size rose by 2 percentage points, from 49 percent in 2014 to 51 percent in 2015.”

In 2009, only 19 percent of surveyed nonprofits reported increasing staff size.

In addition, 57 percent of the organizations surveyed said they also intended to create new positions in 2016, an increase of seven points over last year.

Analysts credit the sector’s potential growth to a rebound in charitable giving. Donations in 2014, the most recent data available, exceeded a record set before the recession in 2007 after adjusting for inflation. More than $358 billion was donated in 2014. After adjusting for inflation, the equivalent of $355.16 billion was donated in 2007.

“Fundraising moved from the third-highest area of anticipated growth to the top spot (33 percent in 2015 results vs. 44 percent this year),” the report reads. “This jump indicates that nonprofits are more optimistic about the improving economy and charitable giving climate, and therefore plan to focus on fundraising efforts in the coming year.”

On the downside, survey responses indicated recruiting and retaining talented staff remains a significant challenge for nonprofits.

The top reason: wages.

“Being able to pay a competitive wage has been the number one staffing challenge for the past five years among nonprofit employers,” the survey found. “Though budgeting constraints mean some nonprofits have a hard time competing with the private sector, many organizations can access data on the compensation other nonprofits in a similar geographic area are offering, including salary and benefits information, in order to remain competitive within the nonprofit sector.”

Survey analysts suggested nonprofits create a formal recruitment budget and strategy to find, attract and retain qualified staff.

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Ben Stanley, former BizTimes Milwaukee reporter.

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