There are over 1.4 million non-profit social service organizations in the US. This sector employs over 9 million Americans and generates more than 6% of US GDP. The sector has also seen employment grow almost twice as fast as the overall US workforce since 1990.
This growth has been driven in part by the growing popularity of social entrepreneurship, which is defined by the Skoll Foundation as:
"seizing opportunities others miss and improving systems, inventing new approaches and creating sustainable solutions to change society for the better. However, unlike business entrepreneurs who are motivated by profits, social entrepreneurs are motivated to improve society."
The long term trends driving the growth of the non-profit sector and social entrepreneurship remain in place. Global interest in social causes, sustainability and improving the environment are growing. Technology and new Internet applications continue to improve and make it easier to start and operate a social service firm. And data driven, results oriented social entrepreneurs - many of which are former traditional entrepreneurs - are improving the sector's focus on clear and measurable social impact.
In the short term the recession is going to reduce social entrepreneurship activity. Foundation and individual donor assets have taken a substantial hit. This will reduce non-profit funding and the pool of social entrepreneurs.
But we expect the downturn to be relatively mild for the non-profit and social service sector. This was the case in earlier recessions and today's non-profit business models, management methods, cost structures and talent pool have improved.
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