December 31, 2016; Crain’s Chicago Business

The 2016 Nonprofit Employment Practices Survey published last year by GuideStar and Nonprofit HR revealed that turnover rates have generally increased among nonprofits, with the average rate growing from 16 to 19 percent between 2013 and 2015. They also reported—no surprise here—that the hardest positions for staff retention are in direct service, which includes some of the lowest-paid positions in an organization. As we wrote last year, whole fields of nonprofits offer less than a living wage to frontline workers.

This, not the never-ending discussion on nonprofit executive salaries, is where our collective attention should be riveted right now.

In Chicago, Lawrence Hall, a social services agency with sites in Albany Park, South Shore, and Greater Grand Crossing, has a staff turnover rate around 37 percent. The executive director says she is trying to remedy that with an overhaul of the agency culture. “There are a lot of stigmas around nonprofits paying market-rate salaries, or having a surplus,” according to Kirstin Chernawsky, executive director at Erie Neighborhood House, which helps families out of locations in West Town, Little Village and Humboldt Park.

Others cite issues with funders. But maybe it’s not “them” at fault here, but us. Lisa Brown Alexander, the CEO of Nonprofit HR, thinks the problem has more to do with the top priorities of nonprofit managers, which too often do not include the pay rates, development potential, or financial sustainability of frontline staff.

The article cites a number of cases where nonprofit lowering their turnover rates, but the “after” picture in each of them hovers between 20 percent and 25 percent.

Annual turnover at Thresholds, a Chicago nonprofit that helps people with mental illness, has averaged 25 percent over the past five years, mostly due to exits among community-support staffers, who account for 32 percent of the 1,441 employees. Turnover from the level of assistant program director and up is around 7 percent, says CEO Mark Ishaug.

In 2013, Thresholds adjusted pay rates for more than half its staff so that salaries better reflect the market. Even so, people leave, for school or a higher-paying job at an insurance company or managed care organization. When they do, Thresholds encourages them to return.

Jasmine Watkins, 30, spent two years as a case aide at Thresholds, then left to get a master’s degree in counseling at the Family Institute at Northwestern University. She returned to Thresholds, expecting to stay two years to earn her clinical license. Five years later, she’s still there.

“They have deliberately tried to make sure I am constantly challenged,” which included a promotion that gives Watkins 20 direct reports.

At some nonprofits, especially those that are government funded, there is no way to address the problem without collective multi-agency action of a decisive kind, and even then, the larger budget environment may make that slow going. At Metropolitan Family Services, for instance, the turnover rate in FY 2016 was 30 percent. CEO Ric Estrada said he made the mistake of being fairly open in discussing the possibility of staff cuts in the context of the state’s budget problems, and a wave of resignations followed relatively quickly. He says he has since stopped talking about the potential of staff cuts and created more ways to engage employees. Fortunately, one of those ways is having employees get involved in an internal committee concerned with state policy issues. It is at least a good first step.—Ruth McCambridge