Will You Still Feed Me When I’m 64?

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Offering full benefits to employees that work in small organizations or for community leaders that work on a project-by-project basis has long been a challenge. Often the lack of benefits force well-intended individuals to leave community work as a paid career. The groundbreaking effort by the National Organizers Alliance proves it is possible for small nonprofits to create a system of insurance and pension that is affordable and in line with their progressive mission. Leaders of small organizations or networks—take note. Such a design might work for your group.

A group of 26 folks working in the progressive movement came together in November 1992 to form the National Organizers Alliance (NOA). Ranging across race, generation, sexual orientation, geography and organizing focus, they launched a membership association to foster the survival, encourage the vocation and bolster the effectiveness of those who work for social, economic and environmental justice.

They quickly realized that sometimes the struggle for justice and dignity begins at home, in our own organizations and workplaces. While NOA was under construction, James Forman, a well-known veteran of the civil rights movement, found himself battling cancer. Having spent his entire life working for justice, he was struggling to cope with a life-threatening illness without the economic and emotional benefits of medical insurance or retirement savings.

Forman’s friends launched a nationwide fundraiser to help defray his medical costs and living expenses. Without a second thought, NOA’s founders dutifully pulled out their checkbooks, filled out checks and sent them off.
But sending money was clearly not enough. The point was obvious: We had to take care of our own—no one else was going to do it.

“We were stunned, and outraged, that someone of Jim’s stature and dedication had no safety net, even after a lifetime of service to our community,” explains NOA executive director Kim Fellner. “We wanted to make sure that coming generations of activists would not be in the same boat, but have viable benefits enabling them to make a long-haul commitment to work in this nonprofit sector. What we needed was not charity, but systemic change.”

And that’s exactly what NOA set out to do.

First, the NOA Benefits Committee conducted a survey to see what was most needed by their co-workers in the field. The results were clear. While 75 percent of all the respondents had some form of medical insurance—albeit too expensive and often inadequate—only 25 percent had any kind of pension and most of those with coverage worked for unions.

The committee also quickly realized the importance of designing a program that encouraged a diverse population to work in the sector. Traditionally, many of the people doing this work already had a de facto safety net: they were white, young, male, middle and upper class college graduates who could afford to do the work until something else came along. However, a large percentage of NOA’s membership was female, of color and worked in poor communities—people historically less likely to have pension coverage or other benefits. NOA pledged to do better.

NOA began the daunting task of designing and implementing a retirement pension plan to meet the needs of its very diverse, very mobile, membership—a group of highly dedicated and poorly paid practitioners.

NOA, itself a dedicated but struggling new organization, clearly needed help if it was to take on such a task. The committee quickly identified a small cadre of progressive foundations, including Jessie Smith Noyes, New World, Surdna, the John D. and Catherine T. MacArthur Foundation, the Alfred List Foundation, the Wieboldt Foundation and the Unitarian Universalist Veatch Fund, that all helped underwrite the initial planning work. NOA continues to raise roughly $110,000 every year from progressive foundations to underwrite Plan administration.

The group was also lucky to find a small team of dedicated union-side pension experts—Randy Barber, Paul Green, and Michael Holland—who provided legal and technical support during the planning process and continue to do so as Pension

“The beauty of the NOA Pension Plan is that it’s really the first of its kind to tackle a critical need—supporting community organizers and their colleagues in their ongoing work to improve the human condition,” says Michael Holland. “NOA and the Plan were perfect ideas nine years ago and still are.”

The result is the NOA Retirement Pension Plan, a multiple-employer 401(k). That’s not mysterious or unusual—basically it means that employers join the NOA Pension Plan and participants each have a 401(k) account to which contributions are made. When the employee retires, she either buys an annuity or takes the contributions plus earnings out in one lump sum.

The NOA Pension Plan architects included some nuances to the Plan to reflect the needs of people who work in the private nonprofit sector, particularly those who work for change in their communities.

Affordability: Since the folks who work in this sector do it as a labor of love rather than profit, many are striving just to make a living wage. The NOA Plan had to be more than a pre-tax savings device for employees to invest part of their salaries before paying Uncle Sam.

It also had to be better than a match program. A match means that an employer will contribute, for example, one dollar for every dollar an employee invests, up to six percent of the employee’s salary. It’s better than nothing, but the problem is that match programs discriminate against those with the least disposable income. If you’re constantly trying to make ends meet, it’s unlikely you’ll have extra money to invest even if your employer is matching.

To ensure that those who most need the safety net actually get one, the NOA Plan requires that the employer make a contribution on the employees’ behalf. The level of that contribution was decided after a great deal of discussion, polling and plenty of angst. The goal was to pick an amount that was reasonable for strapped and under-funded organizations, but significant enough for the accounts to grow in a meaningful way. The Plan’s architects settled on five percent. Once an employee is enrolled her employer is required to contribute at least five percent of her gross salary to her 401(k) account, and she can make additional voluntary contributions.

Portability and Eligibility: The people who do this work are very mobile. They move around within their community as important issues arise that need their attention, or their focus is issue-based and they move from one community to another. In either case, we had to design a pension that was portable. A 401(k) allows that flexibility. When a participant moves from one participating organization to another, all we do is change the contract number. Or the account can be held in abeyance until the person joins another participating organization.

We also knew that many people in our sector, like James Forman, had been working for years without benefits. One of the breakthroughs of the NOA Plan is to get participating organizations within the sector to agree that service at any progressive justice organization counts toward both eligibility and vesting. Vesting is the number of years you must have been employed before the money contributed by your employer is absolutely yours and can never be taken away (the money employees themselves contribute is theirs from day one). To make sure that old-timers and those who move from job to job within the sector are fully included, participants accrue time toward eligibility and vesting for the work they have done in the progressive movement from 1985 forward.

Social Conscience: Finally, we knew that our participants would want the opportunity to put their money where their politics were. When we requested proposals from investment carriers, it included a requirement that the NOA Pension Plan enrollees would have access to socially screened funds. Today nearly 30 percent of all the money invested in the NOA Retirement Pension Plan is in our socially screened funds.

Knowing what you want and getting there is not always easy. The design and implementation of the NOA Retirement Pension Plan took four and half years of hard work. On September 26, 1997, the Plan was unveiled at the third biannual NOA Gathering and three organizations, including NOA, joined the Plan.

“We were incredibly fortunate,” comments Mark Toney, founding NOA member and Pension Trustee who is the executive director of the Center for Third World Organizing (CTWO) in Oakland, CA. “Our attorneys put in hundreds of pro bono hours to help structure a unique Plan that dealt with the realities of our sector—and CTWO was excited to be the first signatory. The folks who work at CTWO are mostly young and of color and it felt great to join a social justice pension plan that had us in mind, and honored our contribution to the field.”

But constructing the Plan was only the beginning. Then we had to make it work.

Running a pension plan is not for sissies. The first couple years were pretty rough. NOA faced many hurdles. But today the Plan includes 75 groups, 500 participants and $2 million in assets. It’s growing at a pretty steady pace and there are systems in place to ensure that things run smoothly.

There are three primary players that make this work. MetLife Insurance Company has been with the Plan from the beginning and offers participating groups a wide array of funding options. More importantly, MetLife provides a nationwide network of licensed professionals who meet one-on-one with new enrollees. In April 1999, NOA contracted with Carday Associates, a third party administrator. Carday is responsible for tracking the contributions, overseeing the audit and IRS reports and keeping NOA from making costly mistakes.

In January 2000 NOA hired a pension coordinator to be a liaison between MetLife, Carday and the participants as well as to increase enrollment. It’s very difficult for many small organizations to make the financial commitment necessary to join and stay in the Plan. NOA’s Pension Coordinator works closely with groups interested in joining. The groups are encouraged to see the commitment as a fixed cost, to recognize the tremendous cost of attrition in their organizations and the movement at large; and to talk to the funders. Since its inception, only one organization has left the Plan because it could not afford the required employer contribution.

In many respects, this was an experiment—an experiment that is working. The Plan is now in 22 states including the District of Columbia. The groups have as few as one employee and as many as 20. Their budgets can be as high as $1 million and as low as $70,000. The participants work for immigrants’ rights, environmental justice, reproductive rights, gay rights and civil rights, in neighborhood groups and unions, even in a few progressive foundations! Their passion has drawn them to the work. NOA offers a pension plan that will help keep them there.

And there’s still more to do. We want to build an endowment that will support the administrative costs of the Plan, to underwrite the $110,000 we must now raise each year from our foundation allies. We want to see 5,000 not 500 people enrolled in the Plan. Above all, we want to see a time when foundations not only enable the groups they support to pay living wages and good benefits, but when the organizations within the sector take the provision of these working conditions for granted.

Due to lack of space, we could not list all the participants in the NOA pension plan—here is a selection to give you an idea of the range of organizations.
Asian Immigrant Women Advocates
Asian Pacific Environmental Network
Brighton Park Neighborhood Council
Californians for Justice
Cambridge Eviction Free Zone
Carolina Alliance for Fair Employment
Chicago Coalition for the Homeless
Chicago Video Project
Dyke TV
Grassroots Institute for Fundraising Training
Hope Street Youth Development
Metro Seniors in Action
MoveOn.org
National Writers Union
Newtown Florist Club
Progressive Technology Project
Rural Organizing Project
SW Network for Environmental & Economic Justice
Tax Equity Alliance for Massachusetts
Tennessee Industrial Renewal Network
Welfare Rights Organizing Coalition
Young Women United
Youth Action, Inc.

Denise Hanna is the national benefits coordinator for the National Organizers Alliance.