Rising health costs plague nonprofits

September 16, 2009

The rising cost of providing health-care benefits to employees is a growing problem for U.S. nonprofits and their 13 million staffers, a new survey says.

Virtually all nonprofits that offer health benefits say costs are a problem, and almost six in 10 say it's one of their top concerns, says the survey by the Johns Hopkins Nonprofit Listening Post Project.

Given that nonprofits generally do not pay as much as for-profit companies, quality health benefits often are a critical lure for top-notch employees.

But increasingly, nonprofits are being forced to cut such expenses.

While eight in 10 nonprofits provide insurance coverage, the share that do not has increased 62 percent since 2004.

And while almost all large nonprofits provide health insurance, almost half of smaller organizations do not.

For those continuing to offer coverage, almost three in four report direct health-insurance costs have increased over the past year, and one in three say the increase topped 10 percent, double the national average of five percent.

Eight in 10 nonprofits expect those increases to continue in the future.

"Escalating health-insurance costs are taking a dramatic toll on our nation's nonprofits and the devoted employees who work for them," Lester Salamon, director of the Johns Hopkins Center for Civil Society Studies, says in a statement.

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