October 30, 2018; Bangor Daily News
According to the recently released 2018 Report on Nonprofit Wages + Benefits in Northern New England (Maine Edition), nonprofits expect to maintain or increase their staffing levels in the coming year, but those plans will be up against a high rate of employment and stagnant compensation rates.
Wages in the sector can be constrained by many things, including reimbursement rates on public contracts. This creates a serious capacity issue for human services organizations that rely on recruiting and retaining quality staff, who are fundamental to delivering on their missions.
The report is mainly a fact-based presentation of survey data, but the executive summary offers several noteworthy insights:
- There is a labor scarcity, with Maine unemployment hovering near three percent and labor participation approaching 64 percent (both rates are slightly better than the national average).
- Despite the competitive hiring environment, nonprofit employees are worse off than they were two years ago, because salaries did not keep pace with inflation, and healthcare costs increased significantly through rising employee contributions, co-pays, and deductibles (costs borne mostly by the employees themselves).
- Almost 40 percent of Maine nonprofits plan to increase their staffing this year, but believe they will be challenged to find qualified staff for hire, as well as developing new leaders to fill the shoes of retiring senior leaders (succession planning is always a hot NPQ topic).
There is little editorializing throughout the 50-page report, but the authors do offer the following:
Nonprofits employ almost 20 percent of workers in Maine and are critically important to Maine’s economy and quality of life. This report suggests that nonprofits—and the funders and donors that care about their missions—must give higher priority to sustain their most important resource: human capital.
While this might be a somewhat subtle message for those outside of the nonprofit community, even the most casual of NPQ readers will know what this really means: If they’re not already there, many nonprofits are being slowly and inexorably squeezed into a crisis position. There is more work to do, and not enough people to do it.
There is an ongoing pressure to somehow “make it happen” as explained by Jennifer Hutchins, Executive Director of the Maine Association of Nonprofits:
Just like our private-sector colleagues, nonprofits are increasingly under pressure to offer competitive pay and benefits to attract and retain talent while continuing to provide the services people rely on. At the same time, we are expected to justify that compensation to our boards of directors, the Internal Revenue Service and the general public…nonprofit wages may not be benefiting from the strong economy as they don’t appear to be keeping up with inflation.
As we look to 2019, there really isn’t a magical solution, unless Santa comes down the chimney with additional funding. But even then, whether it is individual donors, foundations, government, or other revenue sources, will those funders be willing to contribute to what most nonprofits truly need: qualified and quality staff who will stay long enough to learn, grow, and lead?
As detailed in “About Nonprofit Waste, Overhead, and Financial Subservience” just last month, the pervasively negative narrative about “overhead” continues to do great damage to the nonprofit community, and this report simply adds to the accumulating mound of evidence.
While every sector has its challenges (rising health care costs and labor shortages are impacting just about every type of employer in every part of the country) what is particularly insidious about the continuing pressure on nonprofit salaries is that this is largely a choice that funders (individual or organizational) are imposing on the very causes they are intending to support.
Perhaps it is beyond time that this issue is not relegated to the subtleties of nonprofit surveys and executive summaries. How can we hope to change the hearts and minds of the individual citizen (from whence all funds originate, regardless of how they are ultimately distributed) when our own community continues to perpetuate, through both silence and acquiescence, this ritual of gradual decline?
As we enter into the season of introspection, when the year that has been merges into the year that will be, it’s time for the nonprofit world to adopt a resolution—to find some unified resolve—to stand up for the future of the sector, and to fight for the dedicated (and underpaid) members of the nonprofit workforce who help support the backbone of our communities.—Keenan Wellar