A sector under threat: Safeguarding civil society starts with data

The nonprofit sector is the beating heart of our nation. It plays a vital role in delivering social services, while serving as a major job creator in local economies across the United States. The sector is thought to comprise more than 10% of the U.S. workforce, surpassing manufacturing, construction, finance and insurance in size. In 2022 alone, nonprofits made up 5.6% of GDP and contributed $1.4 trillion to the U.S. economy.

In spite of its impact, the nonprofit sector is under threat.

Nonprofits are experiencing high labor turnover at a time of increased demand for services, while also facing new government regulations, legal harassment and vilification campaigns. Congressional committee hearings and oversight activities are being used to inaccurately paint nonprofit organizations as threats to democracy and tax evaders whose assets need to be seized.

These legal, regulatory and narrative attacks come from both the far left and far right, and they seek to restrict nonprofits’ ability to say or do anything that does not fit an extreme ideology. The former accuses the sector of creating the very problems it seeks to solve, while the latter blames it for sponsoring a “woke” revolution. Altogether, the rhetoric has the effect of making charitable activity appear illicit or untrustworthy.

And that’s how civil society comes under threat — and civic space narrows.

Labelled as questionable, nonprofits’ work is reined in by policymakers through cumbersome laws and restrictions, which result in more paperwork and bureaucracy for organizations serving those most in need. Simultaneously, nonprofit leaders encounter intimidation and threats of physical violence, while confronting lawsuits and investigations. In this fraught environment, it’s difficult for civil society actors to do their work, which only hurts the public they serve.

This worries me, because restrictions impact not just a few organizations, but an entire sector — which, by and large, is made up of small nonprofits providing food and shelter, support for churches, afterschool and summer learning programs for kids, funding for arts and culture, and more.

With civil society becoming more and more restricted in the U.S., we need to do all we can to safeguard it.

Rachel Kleinfeld, senior fellow at the Carnegie Endowment for International Peace, makes this point in her recent report, Closing Civic Space in the United States. She paints a clear picture of the challenges facing the nonprofit sector and offers ways to address them based on lessons learned from the backlash against civil society in other parts of the world.

I would like to add one more recommendation.

In the 30 years that the Charles Stewart Mott Foundation has supported global civil society, including in places where restrictive laws were put into place, we’ve recognized the profound power of information — information that’s current, credible and accessible to all, including a free press, the public, policymakers and the nonprofit sector.

Specifically in the U.S., the Mott Foundation has long believed in the importance of collecting and sharing employment data for the nonprofit sector. It’s a way to understand the health status of a field that serves the public good. In the current environment of shrinking civic space, it’s also a way to help the public and policymakers understand the contributions of the sector, and what’s at stake when the work of nonprofits is restricted.

The more regular, consistent data we have on the nonprofit sector in the U.S., the more clear-eyed we will be about the impact restrictive laws targeting it could have on our economy and society.

The U.S. Bureau of Labor Statistics currently releases employment data for the nonprofit sector only once every five years — while it provides data on employment and wages for other industries on a quarterly basis. The lack of timeliness in reporting nonprofit employment data leads to information gaps in measuring the true size and magnitude of the sector in the U.S. economy. It leaves the sector undercounted and underestimated by policymakers and the public, which makes it that much harder to defend the sector when it’s under attack.

That’s why the Mott Foundation first made a grant related to nonprofit employment data to the Johns Hopkins University Center for Civil Society Studies in 1999. And we have consistently funded what’s called the Nonprofit Employment Data Project since 2010.

Our grants initially made it possible for the Johns Hopkins center, under the leadership of the late Lester Salamon, to receive data on the nonprofit sector from the Bureau of Labor Statistics. This data, in turn, allowed the center to produce cutting-edge reports on the size, composition, distribution and growth of nonprofit employment all across the country.

The current process for getting this valuable nonprofit data is far from straightforward. After waiting five years for BLS data to come out, researchers then need to clean, refine and combine the information with other data sources to produce reports that can be useful to policymakers, media, scholars and the nonprofit sector itself.

Knowing these needs, Mott continues to support the Nonprofit Employment Data Project, now under the leadership of Dr. Alan Abramson at George Mason University. To date, Mott’s total grant support for the project is nearly $1 million.

I want to encourage U.S. policymakers and fellow sector leaders to think about how we can sustain and improve the way this country collects and shares employment data for a field that is so critical to our nation’s economy and to a well-functioning society.

As useful as the Nonprofit Employment Data Project has been — and continues to be — there is more to do.

If we could have regular, consistent, current and accessible data on nonprofit employment, then we could have more and better research and reporting on the sector. And that information could help foster more constructive narratives about the sector’s contributions to the economy and society. The information also could help us better protect the field against the regulations and restrictions currently threatening to curtail its work — at a time when our country needs the work of nonprofits more than ever.