Strengthening communities by supporting the nonprofit workforce
Many nonprofit organizations devote their time, talent, funding, and mission to helping people who live in financial hardship. We nonprofit workers focus our attention on families who have trouble affording safe housing, enough food, quality child care and health care, reliable transportation, and technology. We know how hard it is for many people to make ends meet, even when they work hard every day.
But hardship doesn’t just exist among the communities we serve; it’s present within our own workforce as well. A new report from Independent Sector (IS) and United For ALICE, a national research organization studying hardship, shows that in 2022, more than one in five nonprofit employees nationwide could not make ends meet.
One in five nonprofit workers struggle to afford the basics
Of the 13.9 million nonprofit workers in the United States, three million had income below the ALICE Threshold of Financial Survival in 2022. “Below the ALICE Threshold” includes workers who live in poverty and those we call ALICE®—Asset Limited, Income Constrained, Employed—who earn above the federal poverty level but still can’t afford the basics.
For many nonprofit workers—especially those who work in social assistance, the arts, or the religious sector—wages just can’t keep up with rising costs. For example, in 2010, rehabilitation counselors earned a median hourly wage of $15.55—just enough to cover the bare-minimum costs for one adult and one school-age child. By 2022, their median wage had increased by 24% to $19.23. But the costs to survive had grown by 46%, leaving these workers almost $7,000 short of being able to afford the basics.
Nonprofit workers living paycheck to paycheck struggle to save just for emergencies, let alone for the future. In 2022, 48% owned their homes, only 4% had any investment income, 25% were covered by public health insurance, and 10% had no coverage at all.
Compounding the issue is the fact that ALICE nonprofit workers often earn too much to qualify for the public assistance they help community members obtain every day—like the Supplemental Nutrition Assistance Program or disability benefits through Supplemental Security Income.
Systemic disparities affect nonprofit workers’ financial stability
While many nonprofits focus on equity in our communities, there are discrepancies within our own organizations. Hardship often hits certain demographic groups harder than others.
- Black (35%) and Hispanic (34%) workers were twice as likely to live paycheck to paycheck as white workers (17%) in 2022. The voices and experiences of workers of color are critical to achieving nonprofit missions and are needed at all levels, from non-management to the C-suite and boards. We in the nonprofit sector need to ask ourselves: Are current wage levels driving away talent? Is there a realistic pathway from non-management to management, to executive-level positions for all employees, regardless of race?
- Of the 7% of the nonprofit workforce who had a cognitive, hearing, vision, or ambulatory disability or one that makes self-care or independent living difficult, one-third couldn’t afford the basics. Many types of disability are invisible, and the report highlights an overlooked fact of our workforce: the relationship between ableism and wage disparity. What conversations do we need to have internally about the hardship employees with disabilities are experiencing? How can we close this gap and attract and retain these valuable workers?
Where are the best outcomes in the nonprofit workforce?
The new ALICE data also offers glimmers of hope and raises questions for further research.
In a workforce that is almost two-thirds female (65%), women nonprofit workers have higher median wages, lower rates of financial hardship, and higher representation at the CEO level than women at for-profits.
However, gaps persist: Men, who made up 35% of manager and non-manager positions, accounted for 48% of chief executive positions and earned more than female CEOs. What has to change to allow more women access to executive-level positions, at equal rates of pay?
Nonprofits working in the areas of health care as well as finance and insurance (e.g., credit unions) had the lowest rates of financial hardship (16%) and 73% offered private health insurance. By comparison, the rate of financial hardship at retail trade nonprofits (e.g., thrift and resale stores) was 42%, and only 51% had private health insurance. What resources and policies do hospitals and credit unions employ that can also be applied to retail trade and social assistance organizations?
Data-informed solutions are key to an equitable nonprofit workforce
Struggling nonprofit employees have been hidden in plain sight for far too long. To address this crisis, nonprofits need to be able to pay employees enough to live. We need broader investment in our organizations and missions to enable nonprofits to attract and retain talent—and do the vital work of strengthening communities.
We also need consistent data and policy solutions. That’s why IS is asking for the inclusion of nonprofit workforce data in the Bureau of Labor Statistics’ quarterly reports, to help us make better informed decisions. IS is also working to have federal tax credits extended to nonprofits to support benefits like paid family leave, child care, and retirement plans.
If we want to create a just and equitable future for the communities we serve, we must start by investing in our own workforce. Nonprofit workers are at the heart of civil society, and the same compassion and care we bring to our mission must extend to our people. Let’s ensure the work we do not only uplifts our communities but also provides a pathway to prosperity for our workers.
Photo credit: FG Trade via Getty Images
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Susan Stewart says:
Here is my story—one that I believe reflects the experiences of many small nonprofits striving to address critical needs in their communities, our country, and the world.
We founded our nonprofit in the fall of 2022 in response to the growing mental wellness crisis among youth, especially in the wake of COVID-19. Children are experiencing bullying at alarming rates, deeply impacting their mental health and well-being. Our mission is to create programs that tackle these challenges head-on, transforming schools and communities into environments where bullying cannot thrive. In these spaces, students feel safe, classrooms are more conducive to learning, grades improve, school cultures become more positive, and kids have the chance to flourish.
Our flagship program—a free anti-bullying and peace-building 12-lesson curriculum designed for 4th–7th graders—has grown exponentially, with downloads in 32 states. In our home state, 95 schools and youth programs have signed up for the curriculum. We are currently developing a more mature curriculum to meet the needs of high school students. Additionally, we offer high-energy, motivational assemblies within our state, which have been well-received, though 81% of schools require scholarships to access them.
Our staff is small but deeply talented and dedicated to our mission. However, as a start-up nonprofit, the first two years have been incredibly challenging. Building a donor base takes time, as funders understandably seek sustainability and proven outcomes before committing support. Although we continually hear how vital and impactful our work is for youth, securing funding remains a significant hurdle.
Since January 1, 2023, my husband and I have worked without income to sustain the nonprofit, allowing us to allocate resources to our exceptional team. We remain committed to this approach because we believe in the importance of retaining passionate, skilled staff who can deliver high-quality work. Yet, this path is not sustainable. Like many young nonprofits, we face the reality that achieving our mission and meeting growing needs requires a large, consistent backer or broader understanding from funders about the difficulties young organizations face.
When I read your article, I felt compelled to respond because of the challenges of hiring and retaining talented staff while navigating the unpredictable nature of grant funding. Articles like yours are crucial to helping funders understand how difficult it is for nonprofits—especially start-ups—to secure the resources needed to grow and thrive. With greater awareness, we can move closer to a future where more young nonprofits can secure the support they need to succeed.
Debbie Goodrich says:
Thank you for analysis of the nonprofit workforce. Often, donors are unwilling to pay for services we render or are unwilling to donate because they are paying overhead such as admin to have a nonprofit. How do we combat this for the full time work required to help as it is demanded?
Julie says:
So let's stop rewarding nonprofits (ie. online ratings) who starve their employees to get a high program % rate because that's what donors typically care about. Catch 22.
Idahkarimi says:
Very delighting information.
Maria says:
Spot on article! My daughter leads a team for a non profit and is looking to apply to habitat for humanity. In human! I’m CEO of a non profit and had to fight for a higher salary than my white deputy. Sound familiar?
Tim says:
Towards the end of the article it says "If we want to create a just and equitable future for the communities we serve, we must start by investing in our own workforce. Spot on.
Here's the rub. So much of the funding for non-profits comes from state and federal grants. Those grants provide much of the revenue to pay staff. As a non-profit leader I would love to pay staff more but are so often hamstrung by a lack of funding increases year after year. As it is, we see minimum wage increases but no additional increases in the public sector funding. One of our childcare programs received ONE increase in 15 years. Yes, COVID helped and more funding has been provided but these programs were lagging so far behind to start, it is still not enough.
No lawmaker wants to increase taxes, it is not a great platform to which to run a campaign on if you want to get reelected. So while everyone agrees that more funding is needed to pay folks more, no one wants to pay for it.
JAMES KAMIRI GATUMA says:
This read was very informative and I’m encouraged that steps are being taken to improve the overall financial situation of the nonprofit organizations and their employees. My financial situation was adversely affected by the effects of the pandemic. I’m still attempting to recover and develop the organization. If it wasn’t for help, assistance, and resources provided by nonprofits organizations along the way, I’m not sure how I would have made it this far. A huge thank you to everyone who is involved with nonprofit organizations. Your contributions are greatly appreciated.
Clarice Carolyn Herring Jones says:
Very informative