BLOOMINGTON, Ind. – According to a new report from the Indiana Nonprofits Project, Indiana nonprofits recovered slowly following the shock of the COVID-19 pandemic, and there are still signs of vulnerability. The report focuses on paid employment data across the entire state from 2018 to 2023, with preliminary data from 2024.
This report examines how COVID-19 impacted Indiana nonprofit employment, payroll, establishment size, and wages. Total employment across the nonprofit sector declined by 5 percent from 2019-2020, the first time Indiana nonprofits lost jobs from one year to the next since 1995. However, these losses were not equal across the key industries where nonprofits provide important safety net and quality of life services.
The report highlights five major nonprofit industries: health care, education, social assistance, membership associations, and arts, entertainment, and recreation (AER). Among these, nonprofit health care was – not surprisingly – almost fully insulated from the impact of the pandemic with job losses of less than 1 percent, while nonprofit workers in social assistance and education lost about 10 percent of jobs compared to 2019. Those working for membership associations lost 14 percent, while nonprofit workers in AER were most impacted – they experienced job losses of almost 20 percent.
By 2023, total nonprofit employment in Indiana had recovered to pre-pandemic levels, but the recovery was uneven across major nonprofit industries. Nonprofit health care had recovered all job losses by 2022. By 2023, membership and AER were near parity with 2019 levels, while nonprofit education and social assistance still had not surpassed the number of employees in 2019.
The recovery of the nonprofit sector was greatly aided by intervention by the federal government through six pandemic relief laws that provided $5.4 trillion in funding to alleviate the impacts of the pandemic. The Coronavirus Aid, Relief and Economic Security (CARES) Act was particularly important in helping nonprofits and businesses minimize layoffs and supplement lost income.
“We see evidence that Indiana nonprofits responded to COVID-19 by laying off workers in 2020 rather than closing their doors” said Dr. Kirsten Grønbjerg, director of the Indiana Nonprofits Project. “We also find a notable increase in average annual wages in 2020 compared to 2019, suggesting that nonprofits let lower-wage workers go while retaining higher-wage skilled or professional workers.
“Nevertheless, the slow and uneven recovery of nonprofit employment across important services fields points to some lingering vulnerabilities. Although Indiana nonprofits generally pay higher average annual wages than for-profits in the same industries, they appear to be losing ground to for-profit providers in most of the key industries examined.”
Grønbjerg added that current major shifts in federal policies are likely to reduce public funding for key service industries, which would create new challenges for Indiana nonprofits and the communities they serve.
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 the Indiana Nonprofits Project website. It is co-authored by the director of the project, Kirsten Grønbjerg, and research assistant Zaw Naing.
About the Indiana Business Research Center
The Indiana Business Research Center (IBRC), an established research division within Indiana University’s Kelley School of Business since 1925, serves as a primary source of empirical economic, demographic, and workforce data. The center conducts rigorous quantitative analysis to support evidence-based policy, corporate strategy, and regional development initiatives led by public, private, and non-profit stakeholders.
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 "Best Graduate Public Affairs Programs" by U.S. News & World Report, the O'Neill School ranks first in the country. Four of its specialty programs are ranked first, including nonprofit management, while the other five are in the top ten.
About the Lilly Family School of Philanthropy
The Indiana University Lilly Family School of Philanthropy at IU Indianapolis is dedicated to improving philanthropy to improve 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 — voluntary action for the public good — through its academic, 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.