Unequal Expectations: The Living Wage Challenge

This Women's History Month, we shine a spotlight on "Women Who Advocate for Equity, Diversity, and Inclusion"—a theme that echoes the valorous strides taken by women throughout history. We have been relentless in the pursuit of equality, and many of you—our dedicated nonprofit leaders—carry this torch with unwavering tenacity.

Envisioning a world where every girl and woman can carve her own path, we acknowledge the present reality where women represent a staggering 73% of the nonprofit workforce. We are intimately familiar with the shadow of burnout, high turnover rates, and the quest for recognition and fair compensation. Such adversities underscore our collective experience and our immense contributions, not just within our organizations, but to society at large.

This moment is ours to seize—to confront these issues directly and advocate for a living wage. Our shared commitment strengthens our voice, and together, we can break barriers and reshape the future. Read on to learn more about how the living wage challenge is impacting our industry, and what we can do about it.

Connecting the admiration often attributed to nonprofit leaders with the compensation they deserve for their valuable work is a frequent struggle in our industry. When faced with the additional challenge of lower salaries and fewer benefits than the for-profit sector, it’s not surprising that we face high turnover and burnout rates. In an industry focused on the care and concern of our clients, it’s time to start showing equal compassion to our staff. 

David Westenberger, CEO of Indiana Youth Services Association (IYSA), said it best: “Within our field, we haven’t done a very good job of taking care of our own people doing the work. In the field of youth work and social services, in particular, people in the field eventually mirror the population they serve.” A 2022 IYSA survey revealed challenges for nonprofit workers, finding that 64% of employees rated their financial wellness as fair, poor, or very poor.

In other words, your agency’s mission may be to bring others out of poverty at the expense of your staff descending into poverty. You may be working to make healthcare more accessible and not be able to provide your staff with benefits or insurance. Your organization may be providing affordable child care to clients, requiring the staff to work hours when childcare is not available, all while paying them a wage where they, themselves, cannot afford childcare. 

Does this sound familiar? If so, and you are looking for ways to combat this in your own organization, consider the following: 

Why Pay a Living Wage?

At a minimum, paying a living wage will help to combat the high turnover and burnout rates.  It benefits the organization by reducing the cost of recruitment and training, and enhancing productivity through reduced workforce disruption. 

Beyond that, a living wage for workers truly recognizes their efforts and empowers their best work. It gives them the freedom to focus on the work without the worries of financial insecurity.

Consider that these are the people spearheading change, helping people during some of their darkest days, fighting for change in our healthcare, childcare and education systems, contributing to the economic growth of our communities and so much more. 

How can we expect our industry to be at the forefront of equity and social justice without our workers earning a living wage? 

What is a Considered Living Wage? 

Let’s take a closer look at the definition of a living wage. A living wage is the minimum income necessary for a person to meet their basic needs. You can find the living wage for your area by using this Massachusett Institute of Technology Calculator. The living wage shown here is the hourly rate that an individual in a household must earn to support his or herself and their family. The assumption is the sole provider is working full-time. 

How does this compare to your agency’s current wages, especially considering exempt status employees and the hours they realistically work? 

Who is Most Impacted?

There seems to be an expectation among nonprofits that pay disparity is justified by the “psychic income” and sense of satisfaction workers get from making a positive impact. You may know it as the “compassion tax.” While doing meaningful work is rewarding, the need for a living wage, competitive benefits, and a work-life balance are equally important. 

Women make up 73% of the nonprofit workforce and nearly 40% of nonprofit workers are people of color. Thus, these inequalities impact women, Black and Hispanic workers the most.

Does your agency have a commitment to Diversity, Equity, Inclusion, Belonging and Justice (DEIB?)  Paying staff a living wage is part of honoring that commitment. 

How Can We Make Incremental Improvements? 

1. Stay Curious 

The first step is to stay curious and informed. Seek valuable information in colleagues’ and competitors’ 990 forms or annual reports. Ask questions and have conversations with fellow Executive Directors and board members. Are they paying a living wage? If not, what is holding them back? 

2. Dig Into the Data 

Research and compare salaries using resources like the MIT living wage calculator and industry salary surveys, such as the Charitable Advisors’s Central Indiana Salary Report.  A step in the right direction, the most reputable nonprofit job boards  disclose salary information on job postings.

Crowdsource your job ads to ensure positive language and dignity when speaking to candidates. We often see job ads like the one below. You’ll notice this exempt position, requiring a degree, advanced certificates, and experience doesn’t pay a living wage at a 40 hour work week. The position is exempt and requires more than 40 hours a week, bringing the wage even lower. 

3. Share Examples and Resources 

Sharing examples is another powerful way to make a difference. Call out what isn't working and highlight what is, just like the example we show above. This example is from an organization with a 90% female staff, serving exclusively women. Their values include “Every individual and family deserves respect and dignity.” But, a living wage isn’t part of that? Or at least not for their staff? There’s significant incongruence here between their stated values and this position description. By staying up-to-date with current research and sharing examples, you’ll keep a pulse on the industry and its challenges. Get started with our 10 Resources that Shed Light on Nonprofit Workforce Challenges. 

4. Work Together

Finally, let's work together for change. It won't happen overnight, but we must start now. It's time to address the inequities in our industry and pay fair wages. By confronting these challenges, we can shape a better future. We can work in an industry that recognizes the value of the people delivering our mission. An industry that empowers individuals, strengthens communities, and creates solutions to social challenges; moving us closer to justice for all.

Where to Go From Here?

The need to combat industry inequalities is urgent and ongoing. When you are determined and ready to implement the changes our industry needs, we are here to empower you. Kristi Howard-Shultz Consulting is your partner in creating sustainable fundraising and strategic plans for establishing a living, thriving mission, wage, and so much more.

Kristi Howard Shultz the founder of Kristi Howard-Shultz Consulting, is a nonprofit executive that leads with head and heart. With 25+ years of experience working for nonprofits including nationally-known, time-tested institutions like The Boy Scouts of America, Big Brothers Big Sisters, and Boys & Girls Clubs, she has worked in nearly every capacity of nonprofit management throughout her career. She has a proven track record of success in board and fund development, campaign management, and capacity building. She has built a strong reputation within the community and is sought after for her industry expertise and thought leadership. Kristi is a natural relationship builder who loves to put plans into action. Championing “firsts'' for organizations is her specialty.