Report: Nonprofits generate $62B, support 262,000 jobs
Doing good for families, the arts, the outdoors and public health is also good for Colorado’s bottom line, according to a new report that says nonprofits contributed $62 billion to the state’s annual economy and supported 262,000 jobs.
The total economic impact is up significantly from the $40 billion detailed in the last report on Colorado nonprofits, released in 2019. Jobs directly and indirectly tied to nonprofit organizations employ more people than the agriculture, mining, and information industries combined, according to the analysis released Thursday by the Colorado Nonprofit Association, Philanthropy Colorado, the Community Resource Center and the Denver Office of Nonprofit Engagement.
However, the nonprofit sector has lagged behind other industries in recovering from the recession caused by the COVID-19 pandemic, analysts said.
The 34,251 nonprofits registered in Colorado injected $25 billion into the state’s gross domestic product, the report said. Gov. Jared Polis and other state officials joined members of organizations at the state Capitol to announce the conclusions of the economic study.
While it’s important to highlight nonprofits’ substantial effects on the economy, job development and social issues, House Speaker Julie Mccluskie said, “It’s how we use this report that really matters.” She called on those in the industry to share the report with their lawmakers and to draw the connections between “that true local story” and the legislature’s policies.
Nonprofits were by lawmakers’ side during the pandemic to get the state through a difficult time Mccluskie said. “We don’t say it enough, but the state knows that our partnership with all of you is critical to helping every Coloradan to realize their dreams, to help children grow and thrive, to help our seniors stay in communities where they have lived for years.”
The report on nonprofits is released every five years to raise awareness of their contributions and advocate for policies to strengthen the organizations’ ability to serve communi
ties. it details the impacts in terms of jobs and financial contributions in each of Colorado’s congressional districts.
The study is based on data from 2021, the most recent year for which comprehensive information is available. The Leeds School of Business at the University of Colorado and Bright Fox Analytics wrote the report.
The findings include:
• The nonprofit sector directly and indirectly supports an estimated 9.7% of the state’s jobs: 182,000 jobs through direct employment; 54,000 jobs in business-to-business activities; and an additional 26,000 induced jobs through household spending associated with employee earnings.
• Colorado’s nonprofit industry generated more than $62 billion in total economic output in 2021, including $25 billion to the state GDP and nearly $20 billion in labor income from jobs supported by the industry.
• Nonprofits collected more than $28 billion in revenues and held more than $34 billion in assets in 2021.
• Based on available data, more than 2,000 active Colorado foundations contributed more than $1.4 billion in grants in each of 2020 and 2021.
• Foundation spending reached nearly $2 billion in 2021.
The kinds of nonprofits studied included human and social services; environment and recreation; religious and mutual benefit; health and public safety; arts, education and science; and philanthropy, advocacy and capacity building.
Surveys suggest the nonprofit sector has lagged behind other industries in recovering from the recession caused by the pandemic. Nonprofits faced lower funding, higher expenses and significant disruptions to in-person services because of health and safety concerns.
As a result, the report said many organizations cut their payrolls while demand for such services as health rose dramatically. Nonprofits cited ongoing budget constraints, competition with other industries paying higher wages and employee burnout among the top barriers to recruitment in 2022 and 2023.
“Like a lot of industries in Colorado, the nonprofit sector is no different in having challenges in recruiting and retaining talented individuals,” said Lisa Taylor, leader of the Colorado Nonprofit Association board of directors and senior program manager of The Weld Trust.
Although challenges remain, Taylor said organizations have evolved to figure out how to keep delivering services.
Through the pandemic and beyond, the level of giving has been amazing, said Paul Lhevine, president and CEO of the Colorado Nonprofit Association. “We have incredibly generous supporters all across the state, but it still hasn’t kept up with the need.”
Lhevine said lawmakers can help by keeping nonprofits “front and center” when considering legislation and through strategic funding and grants.