Monday, April 11, 2011

Nonprofits Kept Michigan Afloat During Great Recession writer Rick Haglund just put up an informative article about Michigan nonprofits helped keep the state functioning during the Great Recession.  While the entire country was affected by the economic downturn of the past few years, Michigan might have been hit the hardest.  As has been well documented, the state lost some 850,000 jobs when the auto industry collapsed as a result of the recession.  As this happened, however, the nonprofit sector in Michigan experienced a huge growth spurt.

As a matter of fact, employment at nonprofits grew almost 23% over the past decade, while jobs in the for-profit sector fell about 21% (this according to a study at Johns Hopkins University’s Center for Civil Society Studies).  And today, almost 375,000 people in Michigan are employed at a nonprofit organization.  As Haglund says, during a time when budget cuts were tearing "a hole in the social safety net, nonprofits kept it from shredding."

According to Lester Salamon, author of the John Hopkins study, "Michigan is fortunate to be home to such an inventive, entrepreneurial nonprofit sector — one that is making a difference in a state under economic siege."

Despite all of this good news, questions do remain about whether the growth of nonprofits in Michigan is a good thing.  Because these organizations are tax-exempt, there are concerns that the tax base of state and local governments could shrink, which would put more pressure on their already strained budgets.  In addition, many nonprofits are having difficulty finding funding for their social services programs.

So while there is optimism about the impact non-profits are having on Michigan, it remains to be seen whether or not their overall effect will be positive.  Read the full article on this subject at Mlive.

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