As workers earn pay leverage, nonprofits unable to keep up
In a Northern California school district, the superintendent is taking shifts as a lunchroom monitor. In Louisville, Kentucky, nonprofit groups are losing social workers to better-paying jobs at Walmart and McDonald’s. And in Rhode Island, child welfare organizations are turning away families from early-intervention programs because they are short of personnel.
The nationwide labor shortage in recent months has led to delayed shipments, long waits at restaurants and other frustrations for customers and employers alike. But many for-profit businesses have been able to overcome their staffing difficulties, at least in part, by offering higher wages to attract workers.
For many nonprofit and public-sector employers, however, raising pay isn’t an option, at least without persuading state legislators to approve budget increases or voters to approve higher taxes. That is leading to a wave of departures and rising vacancy rates as their salaries fall further behind their for-profit counterparts.
“We’ve lost our ability to be competitive,” said Carrie Miranda, executive director of Looking Upwards, a nonprofit in Middletown, Rhode Island, that works with adults and children with intellectual and developmental disabilities and other health care needs. “When a new person comes to the door, I can’t say yes to them, and they desperately need the services.”
Looking Upwards, like many similar organizations across the country, receives most of its funding through state contracts that pay a fixed reimbursement rate for the services they provide. In many states, including Rhode Island, funding levels had been failing to keep up with rising costs even before the pandemic.
At Looking Upwards, pay starts at $15.75 an hour for jobs that can be physically taxing and emotionally draining; the Wendy’s down the street is offering $17 an hour for some positions.
“We used to compete with hospitals and other health care entities, and now we’re competing with the convenience stores, the fast-food places, the coffee shops,” Miranda said. “I’ve heard more and more people say, ‘I’d love to stay in this job, I’m passionate about the work, but I need to feed my family, I have to pay my rent.’ ”
When Steffy Molina graduated from college in 2017, she wanted a job where she could make a difference in the lives of people like her, an immigrant who spoke no English when she came to the U.S. at age 17.
She moved to Providence, where she found a job with Family Service of Rhode Island, helping to arrange health care, nutrition support and other services for families with young children.
Molina, now 27, found the work rewarding. But at $16 an hour, it was hard to make ends meet. Even after earning a master’s degree, she saw little path toward a livable wage.
So Molina left Family Service shortly before the pandemic to take a better-paying job at a nonprofit that relied less on government contracts. And this year, she left nonprofit work to join a for-profit health care technology company, where she earns about $75,000 a year.
Molina says she likes her new job, and still feels she is making a difference. But she misses helping families directly.
“I loved the work, just the satisfaction of being able to work with a child or a family,” she said. “Even if they could have paid $18, I would have stayed.”
Wage pressures aren’t hitting all nonprofits equally. Some organizations have endowments or other funding sources that make it easier for them to raise pay. And some states regularly adjust reimbursement rates to reflect prevailing wage levels or have used federal aid money to make ad hoc adjustments.
But government data suggests the nonprofit sector as a whole is struggling to compete. Total nonprofit employment in November was 4.8% below its pre-pandemic level, compared with a 1.5% employment gap in the for-profit sector, according to a New York Times analysis of Current Population Survey data. That is despite a sharp increase in demand for many nonprofit services during the pandemic.
Wages aren’t the only challenge. School superintendents say they are battling burnout after close to two years of remote and hybrid learning, fights over mask and vaccine mandates, and other issues.”