5 Cascading Consequences Are Hurting Your Nonprofit

Here’s the thing.

A couple years ago I talked with a representative of an economic development program here in Portland. He focused on the big industries, Intel, Nike, Adidas. I asked him why they didn’t focus more on nonprofits. He said, “because they bring the median income of the region down.”

And that was like a thunderbolt to me: the government gets this basic point that we don’t get.

The government understands that if you want to improve a region, you need to pay people not just a living wage, but a wage that allows them to save, buy a house, invest in their education, or simply put money into a retirement. So of course they invest in STEAM education, and put great attention on programming and manufacturing. These jobs pay better! And when people have better paying jobs, they can afford to go out to eat! Buy clothes! And generally even buy luxury goods that can keep a region going.

If nonprofit incomes bring the median income of the region down, then economic development offices around the country are not going to invest in our sector. They are not going to spend time working to help us grow.

They are going to ignore us. And I think that is too bad. Because we do bring money into the region! We get grants! We get donations! We get earned income! Not to mention the social good that we do for people, for animals, for the environment, for beautifying the world! How can you possibly quantify all of the good that we do into a dollar amount?

According to our research from last fall, what would make our nonprofit employees more happy is paid time off, paid family leave, a higher salary, paid overtime, and paid sick days off. Those are the top five things people want.

They also want to save for retirement, a pension plan, better health insurance, access to disability insurance, and not having to pay as much for health insurance.

1. A CASCADE OF CONSEQUENCES: Lower OVERHEAD!

Our donors are demanding lower overhead! Our feedback is stop paying the CEO so much! Or … why is your staff such a drain on your resources! OK, so nonprofits might hear this, and think okay, we have to pay people less. OR, we got less in fundraising last year so we need to lower salaries. Which leads to…

2. RESENTMENT-CITY

When we underpay people at an organization, and don’t give them enough vacation, or sick leave, or time with their families, we are creating a legion of wage slaves. We are making a group of people tired and cranky. But it doesn’t stop there. Then it goes into…

3. LONG-TERM DECLINE OF INCOME AND HEALTH FOR NONPROFIT WORKERS

It trickles down into the kinds of jobs we can get after this job. The wages we can command. The retirement we can’t save for. The degree we can’t afford. The education for our children we can’t pay for. It affects our health. The stress and worry caused by not having enough time off or wages can lead to a host of diseases. And that leads to…

4. PROGRAMS SHOWING FEWER RESULTS

Why? Because if we’re tired, sick, resentful, we’re not going to be doing our best work. We’re gonna be resenting our jobs, and we’re going to do the bare minimum and go home. What impetus do people have to do a better job if they are not getting paid well? If there’s a fight to get paid better each year? No annual review increase, or no way to get better benefits? This trickles to…

5. LESS FUNDING-BOTTOM LINE:

For many of our nonprofits, we are losing fundraisers consistently. That means worse donor and funder relationships. Aside from actively hurting the people who are performing our missions. Which means our programs are not as good as they could be. This means funders see less results, or less grant proposals or enthusiasm from staff, and they find another organization to give to. They will give where people are excited to come to work, treated well, and it shows.

Bottom line: our missions are hurt, our funding is hurt and our nonprofits are in jeopardy, all because we could not stop the cascading consequences juggernaut.

Keeping Your Good People PAYS! Our research shows what people want. Are you giving it to them?

If not, what’s one thing you could do, this week, to help your staff feel more supported?