10 Resources that Shed Light on NonProfit Workforce Challenges
Updated: Jan 10
The nonprofit industry faces a number of workforce challenges. This includes high turnover and burnout rates, salary and benefit competition from the public sector, and the struggle to maintain a living - and thriving - wage. Despite showing compassion to our clients, this same level of concern is not often reflected in the compensation employees receive for their valuable work.
As you consider the needs within your own organization, the following resources offer a closer look at nonprofit inequalities and the need for a living wage:
The Association of Fundraising Professionals requires salary ranges for all positions posted on the AFP Global Job Board, leading the way in reducing the equity gap and establishing salary transparency:
Research shows that jobs with salary ranges get 30% more attention. Salary ranges set expectations from the beginning and ensure there is no surprise about salaries.
Studies show that women and people of color often have huge disadvantages during salary negotiations. Requiring salary ranges promotes equity in the fundraising profession.
Some donors believe that charities should be run by volunteers. And of those who support paying a staff to run things, the amount should be relatively low.
Charities need to have paid staff to carry out their operations and to deliver services and activities.
Compensation information of the charity’s officers and key employees is routinely included as part of the IRS Form 990.
Factors considered in pay compensation include: information gathered from nonprofit salary surveys, the geographic location of the charity’s offices, and the size of the organization finances and staff.
Charitable Advisors surveyed Central Indiana nonprofit employees on “How are you doing?” and compiled the results. Key takeaways:
With the rising costs of living, nonprofit organizations have been struggling with fundraising while, at the same time, facing an increased need for services from people who need assistance.
There’s a real feeling of having to be “on” all the time, including knowing the pulse of the community, understanding the needs of every nonprofit, connecting with various sectors in the community, attending evening and weekend events, and being available for emails and phone calls throughout the day.
One of the biggest worries among nonprofit directors is the hiring, retaining and engaging of staff.
Leaders can’t keep up with inflation for salaries and overhead, especially at small nonprofits that continue to see heightened demand for basic services in their communities.
We must combat the expectation that nonprofit workers run on passion for their work. Just as they care about the communities they serve, so too should they be appreciated and supported as people. Intentionally funding and planning for staff well-being is a tangible way to start aligning our daily practices with our values.
The 2023 survey found that communities suffer as the nonprofit workforce shortage crisis continues. Key takeaways:
More than half of nonprofits reported they have more vacancies now compared to before the COVID-19 pandemic, and nearly three out of ten have longer waiting lists for services.
Nonprofits were clear on the causes for the job vacancies: salary competition from the for-profit and governmental sectors, the inability of potential job applicants to find child care, challenges caused by problems related to government grants and contracts, and stress and burnout.
72.2 % of respondents cited salary competition as the most frequently cited. 50.2% pointed to stress and burnout.
6: NonProfit Policy Forum “Beyond ‘Psychic Income’: An Exploration of Interventions to Address Work-Life Imbalances, Burnout, and Precarity in Contemporary Nonprofit Work” by Robbie Waters Robichau, Billie Sandberg and Andrew Russo
While many nonprofit workers find their work meaningful, pay, flexibility, and work/life balance are increasingly important to them. Additional takeaways:
Workers motivated by prosocial values won’t stay with nonprofit work because they are satisfied with the “psychic income” that comes from doing good work. Financial compensation now occupies a critical space in nonprofit work.
Organizational and public policy initiatives around pay equity and flexible work is needed.
Nonprofit workers are often excluded from the social and economic prosperity that their own organizations aim to create. They are physically exhausted and financially stressed, leading to high turnover rates. Highlights:
Employees of nonprofits do life-changing work, from helping people at the hardest moments in their lives, to breaking down barriers in healthcare and education, to fighting for the environment. They give of themselves, but this doesn’t mean they should sacrifice financial well-being to do a job they love.
Change requires: working with grant makers and other funders to make sure that annual financial plans support a thriving wage; soliciting donors specifically to support a financial campaign; using data to adjust compensation and benefits to align with current housing and living costs in different cities.
Nonprofits face mixed feelings from the public and funders about whether their employees deserve to earn wages comparable to business or government workers.
A turning point for recognition of nonprofit employees as full-fledged members of the US workforce: The 2020 Paycheck Protection Program (PPP) made nonprofit employers eligible for billions of dollars in forgivable loans on the same terms as businesses through the US Small Business Administration. For the first time, a significant federal economic measure included nonprofit employers on a par with for-profit employers.
Nonprofit executive directors or board members, can help create a more equitable system by:
Setting a wage floor. Every Step made a strategic decision to set a wage floor of $15.00, more than twice the Federal minimum wage. This immediately impacted 44 staff members, some of whom received as much as a $4 per hour increase. Since Every Step implemented a $15.00/hour wage floor, regional and national organizations have recognized it as an employer of choice.
Establishing a wage ratio: A wage ratio is the ratio of the highest paid employee’s salary to that of the lowest paid employee. If an organization had a wage ratio of 3:1, then the chief executive couldn’t make more than $90,000 if the lowest paid employee made $30,000. A few brave charities have already established a wage ratio, and Mary’s Meals may be best known for that.
When it comes to fighting for equalities, and a living wage for workers, proving the value of your organization and its employees can help. The United Way does just that with their report that measures the “economic effects of the United Way’s collaboration with funded organizations in Central Indiana.” The report focuses on the secondary benefits by analyzing and summarizing the economic impacts of United Way’s investments in the Central Indiana region.