Salary / Evan Jackson

October 23, 2016; Star Tribune (Minneapolis, MN)

More nonprofit organizations are putting their money where their mouths are for living wages for their employees. Minnesota’s Star Tribune ran a story earlier this week about several nonprofits bumping up their employees’ wages.

Nonprofit landlord and developer Aeon raised the minimum pay for its workers to $15 this year, $5.50 more than the state’s minimum—ensuring a raise for 34 of its 119 employees. People Serving People, which helps homeless families, has set a minimum wage of $14.50.

Jon Pratt is the executive director of the Minnesota Council of Nonprofits, and he says that the stance needs to move beyond individual nonprofits and into nonprofit culture and practice. “The goal is to get nonprofits out of the church basement. We don’t want to be second-class employers…Do we want our employees to be eligible for our services? Are you actually creating more of the problem than you’re solving?”

The state association recently rejected the offer of a Minnesota legislator to make an exception for nonprofits in the state’s new minimum-wage standards. Pratt said such an exception would have sent the wrong message. “We are in a competition for talent,” he said.

At People Serving People, the change affected 20 of 70 staff members. “A budget is an expression of your values and where you want to go in the future,” said Gwen Campbell, the organization’s development director. Joc’Quil Crawford, who works in the kitchen and computer lab, says that it is a relief that she can now pay the rent with one check. This may allow her enough to buy her eleven-year-old daughter the computer that she needs for her schoolwork

Neighbors, a South St. Paul nonprofit, pays all 13 of its full-time workers who see to the basic human needs of others at least $14 an hour. “We try very hard to make sure we are paying a wage that hopefully they are able to live on,” said Executive Director John Kemp. “I would rather we be light on people than have people we are not paying a decent wage.”

Not all nonprofits are there yet, however, which places Pratt’s group in one of those leadership positions where it can at times be uncomfortable. For instance:

Arnie Anderson, executive director of Minnesota Community Action Partnership, says, “All community action agencies philosophically would love to be able to pay living wage. The resources just aren’t there to do it. Each one deals with that locally.”

“The tension is, do you use the resources available to serve low-income people to meet basic needs or do you use the resources for staffing?”

Nonprofit Quarterly has covered this issue extensively over the last year. NPQ newswires and editorials point to arguments like this one: It’s simply hard to fill jobs at lower wages with qualified people because nonprofits’ revenue stream is largely dependent on outside funding (government and foundation grants, corporate and individual donations, etc.). And outside funding often frowns upon “administrative” costs.

Enter #passiondoesntpaythebills—a hashtag that nonprofit professional Jennifer Laurie launched in May on various nonprofit social media circuits after a fundraising blogger’s article about the new overtime rules.

Granted, some nonprofits are apparently not able to pay living wages because they lack the resources. These organizations need to realign their programs to meet their financial capacity to deliver them. But for some nonprofits, the decision to pay their employees poorly is strategic. As NPQ recently discussed, excessive executive pay can deprive employees of the income their work generates. But by and large, nonprofits, like other sectors, are realizing that to attract and retain competent employees, they must make sure they are able to pay their employees at least a living wage. Otherwise, at least for a social service organization, a troubling scenario arises in which impoverished employees become recipients of the nonprofit’s services.—Angie Wierzbicki and Ruth McCambridge