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Low Compensation Doesn’t Just Impact Employees

Nov 14, 2019

This is the second post of our new guest blog series Knack, highlighting purposeful and powerful, local voices exploring nonprofit ideas, feelings, and know-how. 

Featured Guest Voice | Elizabeth Higgins, Owner of Good Focus LLC

Low Compensation Doesn’t Just Impact Employees

Earlier this year, I had a narrow miss as I interviewed for a position at a nonprofit organization. The interviews went well. I was excited about the mission. There was one huge problem: the pay they were offering was horrifically low. Sure, they offered benefits to try and offset the low pay, but comparing what I would have paid on my own for those benefits, the compensation package was still insultingly low. No, I didn’t end up in that position, thankfully I found a better fit elsewhere. But I still think about the staff at that nonprofit and wonder - are they thriving? Are they even surviving?

As I reflected on my interview experience, I began to wonder if we are creating more future clients to rescue instead of empowering our communities to solve problems. The goal of many nonprofit organizations is to reduce poverty and increase access to basic human services. Yet, too many are putting their own staff in similar vulnerable financial situations as their clients. 

Let me be clear. I am not saying ALL nonprofit organizations operate this way. I’m saying too many still operate this way, and I believe it is having a negative impact on communities. The nonprofit sector is now the third-largest employer in the United States. It is a leader in the wage discussion because it employs a large part of our workforce. However, our culture has conditioned nonprofit workers to believe that they should be paid less for the same or similar responsibilities as a worker in other sectors. Changing this narrative will take a great deal of effort. 

As Claire Dunning noted in her Washington Post piece How the rise of urban nonprofits has exacerbated poverty: READ

“The nonprofit sector employs a growing percentage of Americans who are performing a variety of tasks important to our society. The economic and social benefits ought not, however, come at the cost of replicating, perpetuating, and exacerbating inequality.”

The Colorado Nonprofit Association conducts the Salary & Benefits Survey every two years to collect data on the nonprofit sector trends in the state. They also release an Employment Trends Supplemental Report. The 2018 report identified “compensation and benefits” as the most common reason a nonprofit employee resigned. The majority of these resignations happened within the first three years of employment. Beyond competitive wages within the nonprofit sector, the hurdles nonprofit employees face include surviving in communities where competitive nonprofit wages are significantly lower than other sectors in their communities. Wages cannot be discussed in the vacuum of the nonprofit sector; local economies have a significant impact on an individual employee’s financial future.

When hiring in the third sector, the emphasis is on those who are committed to the mission, have a heart for the work, and are willing to make sacrifices for the cause. Regularly, we place unreasonable workloads on them, refuse to pay them a living wage, challenge them with difficult clients and situations, and push them to the brink of breakdown and burnout. Then we expect these same employees to operate with clear minds, compassionate words, and empathetic hearts. As a community, we set them up to fail. The ones who thrive do so against the odds that were stacked against them.

As the nonprofit sector grows, its ethical responsibility as a significant employer grows. The ways that the sector compensates its employees will continue to have a greater impact on local economies. Nonprofit employees who do not receive living wages rely on other nonprofit organizations, government benefit programs, or family for help filling the gaps.

So what can we do?
If you are a donor: Initiate discussions on social media and in your circle. Help end the belief that nonprofit staff should live in poverty while serving others. Nonprofit employees provide necessary services to their communities. They are also hard workers in your community that need living wages to fully support their families, save for retirement, and re-invest back into the local economy. Be an advocate for change by influencing the people you know. The situation will not change without donor support. 

If you are on the funder-side of the equation: Find out what supports your funded programs might need to offer living wages and benefits. Start the conversations, so they feel free to explore the possibilities with you. Find out what steps your foundation could take to be part of the solution. 

If you are on the executive or administrative side of the equation: Make competitive salaries and benefits a strategic goal. Pull your team together to identify how to make that possible. It might not be a simple change that can be made immediately, but you can begin today to create a plan for the near future. If your biggest fear is how your funders will perceive pay increases, reach out to them to initiate those conversations. Focus on the positive outcomes your organization is producing and let them know what you believe the impact on the community as a whole would be if wages and benefits were increased. Find out what their true beliefs are regarding compensation. Program officers want organizations to succeed. Funders want to be part of solutions that lead to successful outcomes. But you often have to connect the dots for them to help them understand the negative impacts and how the solution you propose will positively impact the organization and community. You might be surprised to find them on your side. If they aren’t supportive, maybe they aren’t the best fit for your future funding needs - build that change into your strategy now.

Effective organizations need effective people. Effective people need living wages. Do you agree? Let’s start the conversation.

 

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ABOUT ELIZABETH HIGGINS

Elizabeth Higgins is the Owner of Good Focus LLC and serves nonprofit organizations by providing virtual bookkeeping, budgeting, strategic planning, and grant services. Her 10+ years working directly for nonprofit organizations or monitoring government grant funds distributed to nonprofit organizations, exposed her to the intimate struggles that organizations face in balancing their mission, staff, clients, donors, and finances. Her goal is to empower individuals and organizations to fulfill their missions while honoring their values. For more information visit her website at Good-Focus.com.

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