Reprinted from the Dorothy A. Johnson Center for Philanthropy.
The most recent data available show that the nonprofit sector employs 12.4 million workers, 10.2 percent of the U.S. workforce overall, at an average wage of $53,367 (U.S. Bureau of Labor Statistics, 2019). The sector employs more than 15 percent of the workforce in 10 states, including, for example, Pennsylvania, Minnesota, and New York, and is the third largest workforce in the country, behind only “retail trade” and “accommodations and food service,” and equal to “manufacturing” (Salamon & Newhouse, 2019). By any measure, the nonprofit sector is a major force in the U.S. economy.
This year, millennials—born between 1981 and 1996, although interpretations vary—are predicted to make up more than half of the U.S. labor force for the first time, outnumbering baby boomers who are about a quarter of the workforce (Fry, 2018). The U.S. population as a whole is expected to hit majority minority status by 2045 (Frey, 2018). Emerging, more heterogeneous generations are requiring that workplaces of all kinds evolve. Philanthropy is no exception.
Nonprofit leaders are well aware that, despite vocal enthusiasm and mountains of data, we are not making rapid enough progress in diversifying the sector (e.g., BoardSource, 2017; Funders for LGBTQ Issues, 2018). Hiring and retention can mitigate this stagnation. However, larger demographic shifts also require philanthropy to “keep up with the times.” Some organizations are looking to open the doors wider by focusing on entry points. Opportunities include:
- Increasing the availability of paid internships and apprenticeships. People of color especially report “that unpaid internships and low-salaried jobs were significant barriers early on in their careers and [pose] a challenge to their retention and advancement” (Fund the People, 2019, p. 15).
- Expanding the use of competency-backed hiring practices. Competency-based hiring strategies have been shown to result in greater diversity in hiring, increased talent retention, and improved overall performance (Grigoryev, 2006; Talent 2025 and West Michigan Works!, 2018).
This generational changing of the guard presents both great opportunity and some challenges for the nonprofit workforce. On the challenge side, much has been written about the personality traits of millennials—and some of it is supported by research. Well-done research has shown that narcissism and high self-esteem are more prevalent in millennials than in previous generations. (See Ng, Lyons, & Schweitzer, 2012 for a summary of the research.) They want close contact with their managers—in fact, they are looking for coaches rather than bosses, and they change jobs more frequently (Gallup, 2016). As a sector that already struggles with a lack of skilled leaders and high turnover rates, nonprofits will have to re-examine how they think about talent development and retention.
The opportunity for nonprofits is that millennials are looking for more than a paycheck; they want their work to have meaning and see their work as their life—not just a job—while at the same time seeking good work-life balance (Gallup, 2016). They are values-based, and may be willing to trade higher pay and faster advancement for more flexibility (ProInspire, 2015; Finn & Donovan, 2013). These changing attitudes are reflected in their desires for workplace change:
- Work-Life Flexibility. 55 percent of respondents to the 2015 Employee Job Satisfaction and Engagement report from the Society for Human Resource Managers (SHRM), reported that the “flexibility to balance work and life issues” is very important to their job satisfaction—that was up 10 percent from the previous year’s report (SHRM, 2015).
- Learning Organizations. Millennials look for—even require—opportunities to develop their capacities as workers and leaders. They are attracted to workplaces that commit to professional development, ongoing and transparent feedback, and cross-generational mentorship (ProInspire, 2015).
- Quality Over Quantity. Millennials want workplaces that measure productivity in output, rather than hours worked or physically in the office (Finn & Donovan, 2013). Their insistence on flexible—and often remote—work schedules runs up against traditional workplace norms.
Mission-driven nonprofit work would seem to be an ideal match for this generation of the labor force. However, as more for-profit companies emphasize social outcomes, the nonprofit route may actually be less attractive based on salaries and benefits. Meanwhile, evolving technologies and for-profit social enterprises are providing ways outside of traditional work and formal organizations to engage (Millennial Impact Report, 2018).
The millennial generation is the most diverse in the history of the country (56 percent of millennials are white, versus 72 percent of Baby Boomers) (ProInspire, 2015). The increasing diversity of the overall working population will lead to a more diverse pool from which to draw employees. However, nonprofits need to take steps to create better and clearer pathways into leadership positions if they hope to keep this generation of employees engaged.