News Release

Johns Hopkins-led Study Finds Nonprofit Sector is a Burgeoning, Economic Force

The results are significant. Worldwide, the nonprofit sector is a massive economic as well as social force that is growing rapidly, partly in response to growing doubts about the ability of the state to respond to social welfare, developmental and environmental problems.

Nearly 19 million people are employed in the nonprofit sector in the 22 countries studied, making it a $1.1 trillion (U.S.) industry. Taken as a separate economy, it would be the 8th largest economy in the world, ranking ahead of Brazil, Russia, Canada and Spain.

And in the countries for which comparative data was available, the nonprofit sector also has shown signs of recent, rapid growth. Between 1990 and 1995, nonprofit employment jumped 23 percent compared to six percent for employment growth in the economy as a whole.

A veritable global associational revolution appears to be underway, a massive upsurge of organized private voluntary activity in literally every corner of the world, said Lester M. Salamon, (pictured at right) director of the study and a professor at The Johns Hopkins University, in Baltimore, Md. in the United States.

Interestingly, the majority of revenues for nonprofits worldwide does not come from private philanthropy, but rather from fees and government funds. Fees alone account for 47 percent of nonprofit revenues compared to 42 percent from government funding and 11 percent from philanthropic giving.

This is Phase 2 of the Johns Hopkins Comparative Nonprofit Sector Project and it brings together data from 22 countries and represents the work of more than 150 researchers, examining the size, scope, financing and role of the nonprofit sector. Phase 1, released four years ago, examined eight countries.

The study examines closely what is called the nonprofit sector in the United States, but what is variously called the voluntary, the civil society, or the independent sector in many other countries. It includes organizations that are voluntary and private but that do not distribute profits, such as hospitals, universities, social clubs, professional organizations, day care centers, environmental groups, family counseling agencies, sports clubs, job training centers, human rights organizations and others.

Among the study s other findings:

Despite a widespread perception that the United States leads the world in terms of nonprofit activity, that is not the case. Measured as a percentage of overall employment, the United States lags behind such countries as the Netherlands, Ireland, Belgium and Israel. The assumption of American superiority in this field is just that, an assumption, a myth, said Salamon.

Spending by nonprofit organizations in these countries amounts, on average, to 4.7 percent of gross domestic product. This little sector turns out to be a mighty economic force around the world, said Salamon.

The scale and character of nonprofit activity varies from country to country and from region to region. In Western Europe, most nonprofit employment is in education, health and social service organizations, while in Central and Eastern Europe it leans more heavily toward recreation and culture, the study found.

Health and social services are the dominant sources of growth in the nonprofit sector. Forty percent of job growth in the nonprofit sector came from the health field, while 31 percent of job growth came from social services.

Rates of employment growth in the nonprofit sector are among the highest of any industry in virtually every country studied. The nonprofit sector has become a major contributor to employment growth, said Salamon.

These findings send a powerful message to countries that are plagued by high unemployment and sluggish job growth, said Helmut Anheier, associate director of the project.

The Johns Hopkins Comparative Nonprofit Sector Project was organized by the Johns Hopkins University Center for Civil Society Studies in cooperation with a network of Local Associates and research centers throughout the world. The project is being supported by over 50 public and private funding sources, including the Fondation de France, the Charities Aid Foundation (United Kingdom), the Banco Bilbao Vizcaya Foundation (Spain), the Sasakawa Peace Foundation (Japan), the Ford Foundation (United States), the W.K. Kellogg Foundation (United States), the Charles Stewart Mott Foundation (United States), Juliana Welziijn Fonds (the Netherlands), the Industry Commission (Australia), and the K”rber Foundation (Germany).

The full study will be released at the Londra Room of the Lingotto Conference Centre in Turin, Italy, at 2:30 p.m. on Sunday, November 8, 1998. For a detailed summary of the study, please contact me at 410-516-6094. Details of the Conference at Turn can be found at: http://www.efc.be/aga1998/.