By Stefan Yablonski
Nonprofits are essential to the health and stability of Central New York.
Every day, they respond to the needs of children, seniors, veterans and families with programs that make a measurable impact — reaching those who might otherwise be overlooked in times of their greatest need; their work remains vital to the strength and resilience of the region, according to Chena Tucker, director of the Richard S. Shineman Foundation.
Nonprofits are “extremely important” to the entire state as well, agreed Bruce Kingma.
Kingma is a leading educator and researcher in entrepreneurship, business communications, economic development and online education. He has been at Syracuse University for 25 years now — since 2000.
“I don’t know the exact number as to the percentage of the economy, but they have grown more and more important in New York state, for obvious reasons,” he said. “The way we think of organizations is that they are either government, nonprofit or they are commercial. Hospitals are great examples of something that can be all three.”
In Syracuse there is University Hospital which is a New York state government-run hospital. Crouse is nonprofit. But you can also have for-profit hospitals, too, he explained.
“The largest employer in Syracuse back in the day used to be Carrier and before that it was somebody else. But now it is Upstate Hospital complex. The No. 2 is Syracuse University, which is nonprofit. When Micron gets finished off, they will be a for-profit organization. They will certainly be in the top three of employers if not No. 1,” he said.
Earlier this year, state comptroller Thomas DiNapoli released a report that showed nonprofit organizations in 2022 provided 1.3 million jobs to New Yorkers — just over 1 in 6 private sector jobs in the state. While the number of nonprofits increased nationally between 2017-22, they declined in New York and the number of jobs also fell by 4.1%.
“Nonprofits play an important role in our state and local economies and are an essential part of the fabric of the communities they serve, but their numbers are shrinking,” DiNapoli said. “Many nonprofits rely on government funding to support their services and contract delays and slow payments have contributed to some of the challenges they face. Policymakers need to ensure state agencies process contracts and payments for nonprofits on time, so they can carry out the work on which so many New Yorkers rely.”
Nonprofits Role in State Economy
In 2022, there were more than 344,000 nonprofit organizations in the U.S., 3.1% of all private sector establishments. With 33,536, nearly 1 in 10 of these nonprofits were located in New York, comprising 5% of the private sector statewide, according to the state comptroller.
Nonprofits provided 12.8 million jobs nationwide in 2022, with the greatest number (10.6%) in New York. In some regions of the state, they supported more than 1 in 5 private sector jobs. Nonprofits in New York paid $96.8 billion in wages in 2022 (11.1% of the nationwide total). Average annual wages paid by nonprofits in the state were lower than in the public and private sectors, in contrast to nonprofits in the rest of the country, where average wages were more in line with public and private sectors.
Statewide, three industry sectors accounted for 78.9% of nonprofits and 89.3% of nonprofit jobs in 2022. The health care and social assistance sector had the largest share of nonprofit establishments (41.3%) and jobs (61.4%). Other sectors with significant employment in New York include educational services, other services, professional and business services and leisure and hospitality.
In New York state nonprofits have become such an important part of local economies.
There are more nonprofits listed than there are in existence.
“What happens is when you register a company, you have to file quarterly reports. But when you register a nonprofit in New York state I don’t think there are those quarterly reports,” Kingma explained. “Nonprofits really don’t die. So, the number of registered nonprofits is much larger than the actual number of nonprofits.
“New York tries so hard to be a business-friendly state, but it’s not,” Kingma said. “And as a result, we see this growth of great nonprofit organizations. A healthy state has a healthy mix of all three. Nonprofits can be more efficient; they are not accountable to government. It’s a more independent environment, so they end up doing a better job.”
Operating a nonprofit is not easy these days. Several challenges exist. Some are internal to each organization. Others are external and larger than any one organization can address alone.
“It’s not hard to start one at all,” Kingma said. “You just fill out a bunch of forms and you want to get a lawyer to get yourself started. And you need a nonprofit board. It’s not that difficult to start a nonprofit. But to ensure that it has funding and keeps going is more difficult.”
“Almost all nonprofits take donations. You hope you make a compelling argument to individuals or the generous benefactors that are interested in giving to your organization. A lot of nonprofits go after government funding or state or city funding.”
But funding has not been strong — all universities, for example, are under financial duress right now, he added.
It depends on what the mission of the nonprofit is. Most churches and synagogues etc. are in the nonprofit sector. But they typically don’t get federal or state funding. But they do qualify for tax advantages.
Very few nonprofits lobby for their cause, he said.
“They have got to be careful of how they do it. If they politicized what they are doing they run the risk of losing their nonprofit status,” he explained.
Numbers dip
Although New York ranks among the highest for nonprofit establishments and employment, both numbers declined between 2017 and 2022, according to DiNapoli. The state experienced a loss of 626 nonprofits between 2017-19 and recovered 453 over the following three years, a net loss of 173 establishments through 2022.
Prior to 2020, employment in nonprofits was growing in nearly every state and New York had the fourth highest increase with 32,348 additional jobs. During the pandemic, the number of jobs at nonprofits plummeted nationwide, with a loss of 580,426. Approximately 1 in 5 nonprofit jobs lost was in New York. By 2022, employment at other private sector establishments nationally had fully recovered, but nonprofits were still struggling. New York had the lowest nonprofit job recovery, regaining just 7.4% of the jobs lost and fewer jobs than in 2017.
In addition to lagging other states, job growth for nonprofits in New York was also lower than that for other private sector establishments and the public sector from 2017 to 2022. During the five-year period, nonprofit employment declined by 4.1% in comparison to a 1.5% decrease for the public sector and a 1% increase in all other private sector establishments.
There were some tax advantages in the One Big Beautiful Bill Act passed a few months ago — an incentive for increasing donations to nonprofit organizations.
“The hope is this increases small donors and large donors — because in 2026 there is a reduction in the incentive for large donors. So this is the year — we only have a few months left to take advantage of that,” Kingma said.
Regional Impact
DiNapoli’s report found that in 2022, almost 60% of the state’s nonprofits and two-thirds of their employment were in the downstate regions, with nearly half of all nonprofit jobs located in New York City. However, nonprofits jobs are a higher share of private sector employment in Upstate regions. For example, in the Southern Tier, 1 in 4 private sector jobs are at a nonprofit.
In 2022, nonprofit employment in all regions remained below 2017 levels, with the largest declines in the Mohawk Valley (-12.3%), Western New York (-10.3%), and the Capital Region (-9.5%).
Broad impact
Nonprofits have a broad impact by creating economic activity and jobs that ripple through the community.
For example: arts programming. By attending a play at a local nonprofit community theater, you didn’t just support the cast, crew and administrative staff. You likely also provided a boost to local businesses. Paying for parking, going to dinner before the show, meeting friends afterwards — that extends the economic impact of that theater. It helps create and retain jobs in the local economy and generates tax revenue for the local government also.
“Yes, there is an impact locally. That’s absolutely correct. You look at a nonprofit like a local theater in a different way than if you look at community mission or the Salvation Army. Every one of those organizations has an economic impact locally,” he said. “But it is important to calculate those correctly. Going to a play run by a nonprofit organization and having an economic impact which is slightly different impact if I were to go to Broadway and see a play. That calculation is also different if I were to go to a local museum or a local library.”
United Way is a pass-through nonprofit in that resources pass through them to other nonprofits.
“When you look at the nonprofit sector in places like the United Way, you trust them to, vet you might say, where your dollars are going. That is the tricky part about nonprofit organizations. Giving them your money and knowing it is going to an intended purpose. United way also serves as a way to vet those other organizations,” he said.
The nonprofit sector is large and complex. It is extremely important in the United States as an important part of the economy, he added.
However, nonprofit missions are vulnerable to actions by policymakers — such as government shutdowns.
“It does impact universities, no question about that. Grants have been frozen, pre government shutdown. They have had a negative impact,” he said. “And many nonprofits just from the shutdown are likely to have an impact. But you’d have to look at it piece by piece. If you are a nonprofit that is facilitating something that is directly affected by the government shutdown you’re likely to be impacted. If they get federal funding, they may see that funding may get frozen for a while.”
How government, whether intentionally or not, could impact nonprofits:
• Take away needed resources, such as by levying taxes on tax-exempt nonprofits and limiting or eliminating charitable giving incentives;
• Impose unfunded mandates by cutting government budgets and expecting nonprofits and foundations to fill the voids;
• Establish unwieldy regulatory burdens;
• Interfere with nonprofits’ legal independence; and
• Otherwise change laws in ways that disrupt the work of nonprofits.
