A Too-Sad Truth about the Nonprofit Sector

“Is there something in society’s subconscious that expects nonprofits to operate in ‘poverty-like ways’?” That question was a showstopper in the Cohort 20 classroom of the summer 2010 master’s program in philanthropy and development at Saint Mary’s University of Minnesota. We were talking about the starvation mentality in so many nonprofits—you know, things like really old, rather dysfunctional computers and such poor wages that employees cannot afford a reasonable mortgage and may have to visit the soup kitchen for a meal.

We talked about the chronic underfunding of necessary infrastructure and overhead. We ranted against GuideStar, Charity Navigator, and their ilk, which rate nonprofits based on spurious ratios. We recognized that inadequate infrastructure causes employees to work excessively long hours with poor tools and insufficient professional development. And . . . we realized how hard it is to explain this to boards that make decisions.

There, in that university classroom, members of Cohort 20 explored why this happens. Who decided that 90 percent of the charitable gift must go to direct service . . . thus starving the organization and its employees of necessary resources? Who decided it was okay to pay a less-than-living-wage to people who work in nonprofits?

One student asked, “Does society think nonprofit employees should be paid low wages because then the employees will relate better to the clients?” Another cohort member wondered, “Why does a willingness to accept lower wages (much lower wages than for-profits) seem to be an indicator or qualification for one’s job in the nonprofit sector?”

This is terrible. And unjust.

Is this a holdover from religion? (Although why should religious orders take a vow of poverty?) Is this an implied mandate from government—somehow indicating that because the nonprofit sector gets certain benefits, the working conditions and wages can be lousy? What’s going on?

I believe in a living wage for everyone, including employees in the nonprofit sector. I believe that adequate infrastructure is necessary to support the programs and services provided to fulfill mission. And, by the way, I believe that competent people work in the nonprofit sector, just like competent people work in the for-profit sector. There are, certainly, stars working in the nonprofit sector—and they would be stars if they were working in the for-profit sector, too. I also believe that there are incompetent performers in every sector: nonprofit, for-profit, and government.

Also, I do not expect wages in the nonprofit sector to be outrageous. I think it’s a violation of the integrity and ethics of the nonprofit sector to pay the excessive salaries, benefits, and bonuses found in some for-profit jobs. That said, I have no problem with a decent wage—a darn decent wage—for nonprofit staff.

It’s time for the sector to fight this. It’s time for nonprofits to invest in infrastructure and demand fair wages for their employees. It’s time to stop honoring the unrealistic expectations of government contractors and scared boards. I believe we can explain this to our donors. Let’s get it together and make change.

By the way, what kinds of wages does your organization pay? Does your organization regularly conduct compensation surveys? Does your board talk about the morality of compensation and what kind of morality your organization embraces? I hope that your organization doesn’t claim poverty wages because it “just cannot raise enough money.” If you couldn’t carry out your mission well, I suspect you’d choose to go out of business. Because it’s unethical and immoral to provide poor-quality programs and services. I think it’s unethical and immoral to provide poor-quality infrastructure, too. If you can’t provide decent working conditions and adequate support resources, that, too, is unethical and immoral. So go out of business. Close.

I’m tired of whiny nonprofits that think it’s okay to put all the money into programs and treat staff poorly. I’m tired of nonprofits that won’t fight against this silliness. I’m tired of organizations (nonprofits and watchdogs) that promote inadequate support for infrastructure by promoting inappropriate ratios.

This is important work. It deserves serious people. And serious people don’t work like this.