BLOOMINGTON, Ind. – COVID-19 took a toll on nonprofit employment in the nine-county Indianapolis Economic Growth Region (EGR 5), but the years that followed told a story of recovery and resilience according to a new report from the Indiana Nonprofits Project, which analyzed data on paid employment from 2018 through 2023 as well as some preliminary data from 2024.
The report highlights the long-term impact that the COVID-19 pandemic imposed on nonprofit employment, payroll, and wages in the Indianapolis economic region between 2018 and 2023. Total nonprofit employment in the region declined by 5% in 2020 for the first time since 1995, when the project launched its data series. The study focuses on five major nonprofit industries and subindustries in health care, education, social assistance, arts, entertainment, and recreation (AER), and membership associations.
The immediate impact of COVID-19 on paid employment in 2020 was uneven across these key nonprofit industries. With the temporary closure of non-essential services at the height of the pandemic, the AER industry absorbed the most dramatic impact, while health care—where essential services such as hospitals and ambulatory care were indispensable–had virtually no employment losses.
“The arrival of COVID-19 in early 2020 presented major challenges for families, communities, government and service providers everywhere, including Indiana nonprofits,” said Dr. Kirsten Grønbjerg, Director of the Indiana Nonprofits Project. “We know from our previous reports that nonprofits had to change service delivery formats and lost funding while still trying to meet the rising needs of communities.
“Massive federal pandemic relief efforts enacted in 2020-2021 softened the blow, but as nonprofits had to cut costs, our new findings suggest they selectively retained higher paid, skilled staff in their attempts to keep programs operating.”
The post-pandemic recovery for the region’s nonprofits was slow. Total nonprofit employment did not completely recover to 2019 levels until 2022, with preliminary data showing continued growth in 2024. However, the recovery was uneven across the key nonprofit industries, and nonprofits recovered more slowly than did for-profits in most of these industries.
Recent shifts in federal policies away from social safety net programs and support for low-income communities in early 2025 signal an era of new challenges to the region’s nonprofits. However, Grønbjerg cautions that it is too early to determine what the impact of this most recent development will be. New federal policies will likely have a disproportionate impact on low-income communities and families, as did COVID-19. They also appear likely to increase pressures on nonprofit revenues, operations, programs, and services, as was also the case with COVID-19, and they will likely impact some nonprofit industries more than others.
“Nonprofits in the Indianapolis EGR showed considerable resilience during and after COVID-19,” Grønbjerg said. “However, their slow and uneven recovery since suggests they have found it difficult to expand their own revenues, operations, and services to meet existing needs, let alone any increase in needs.”
The report is a joint effort of the Indiana Nonprofits Project, the Indiana Business Research Center, the Paul H. O’Neill School of Public and Environmental Affairs, and the Lilly Family School of Philanthropy all at Indiana University.
About the Indiana Nonprofits Project
The Indiana Nonprofits Project is collaborative project designed to provide solid, baseline information about the Indiana nonprofit sector in order to help community leaders develop effective and collaborative solutions to community needs and to inform public policy decisions. The full report is available at https://nonprofit.indiana.edu/. It is co-authored by the director of the project, Kirsten Grønbjerg, and research assistant Zaw Naing.
About the Indiana Business Research Center
Established in 1925, the Indiana Business Research Center is an integral unit in the Kelley School of Business at Indiana University. The IBRC’s mission is to empower communities and their leadership to build equitable and thriving regions through strategic insights, data and practical research. Our goal is to be a leading resource for user-friendly, practical applications of data, research and policy insights and to be recognized across the state, the nation and the globe for excellence in research and practice by regional science and economic development faculties and institutions.
About the O’Neill school of Public & Environmental Affairs
The O’Neill School is a world leader in public and environmental affairs and is the largest school of public administration and public policy in the United States. In the 2026–27 U.S. News & World Report “Best Graduate School” rankings, the O'Neill School's Master of Public Affairs is ranked No. 1 in the nation out of 266 public and private institutions. In addition, the O’Neill School received No. 1 rankings in four specialty areas—environmental policy and management, health policy and management, nonprofit management, and public finance and budgeting, with nine specialties ranked in the top 10.
About the Lilly Family School of Philanthropy
The Lilly Family School of Philanthropy is dedicated to improving philanthropy and the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The school offers a comprehensive approach to philanthropy through its undergraduate, graduate, Ph.D., PhilD, certificate and professional development programs, its research and international programs, and through The Fund Raising School, Lake Institute on Faith & Giving, Mays Family Institute on Diverse Philanthropy, and the Women’s Philanthropy Institute. Follow us on X (formerly Twitter), LinkedIn, and Facebook.