Nonprofits: A Closer Look

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Texas Border Business

THE ECONOMIST

M. Ray Perryman

Dr. M. Ray Perryman
Dr. M. Ray Perryman

In a recent column, I talked about the enormous economic benefits of Texas nonprofit entities. We estimate that when multiplier effects are considered, ongoing operations of Texas nonprofits include $110.0 billion in annual gross product and nearly 1.4 million jobs (about one-eighth of all private-sector jobs in the state). In response to several requests, let’s take a closer look at the types of organizations and their positive impacts.

Nonprofit entities have a wide variety of missions. Many provide health care, while others serve educational or social service needs and still others enhance our cultural opportunities in a variety of ways. By fulfilling their primary purposes, they also provide jobs and purchase needed input goods and services. As a result, they create substantial activity in communities across Texas.

When we looked at the categories of nonprofit organizations, we found that the largest by far in terms of economic impact is health care, with education also a major contributor. (We measured the economic benefits of nonprofits by type of entity including multiplier effects; the full report includes results by local area and industry. It is available for free download at www.perrymangroup.com.)

Nonprofit hospitals lead to gains in business activity across Texas of $43.5 billion in gross product per year and 526,800 jobs, not to mention the lifesaving and quality-of-life improving care these hospitals offer, which is obviously beyond price. Other types of nonprofit health care providers are also large contributors to the economy, including ambulatory care, with $10.8 billion in annual gross product and 134,300 jobs, and nursing and residential care facilities with $6.4 billion in annual gross product and over 77,700 jobs. 

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Educational institutions are another large group of nonprofit entities. Nonprofit elementary and secondary schools generate $9.2 billion in annual gross product and 125,400 jobs. Colleges, universities, and professional schools contribute another $6.8 billion in annual gross product and nearly 97,500 jobs.

Social assistance nonprofits generate an estimated $10.5 billion in annual gross product and almost 147,000 jobs. There are a variety of other types of nonprofits such as religious organizations, research and management firms, philanthropic organizations providing billions of dollars to myriad causes, and those related to the arts, entertainment, cultural, and recreational activity. These entities also support tens of thousands of jobs across the state and enrich our daily experience in countless ways. 

Texas nonprofit entities improve lives, communities, and society and are crucial to the wellbeing of Texas families, businesses, communities, and the economy as a whole. They also relieve some of the pressure on governmental entities that provide similar services, thus benefitting taxpayers. In short, nonprofits are vital to the economic and social fabric of Texas.


Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.

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