In early January, I set out to answer what felt like an easy question: How many funders make support for nonprofit workers’ salaries and other basic economic needs like health insurance and paid time off an explicit part of their grantmaking practice?
Granted, my research into this question was far from scientific. The effort amounted to a few LinkedIn posts that were shared by some of my Inside Philanthropy colleagues and conversations with experts in the field. But my posts alone were viewed more than 1,200 times. Additionally, the logic behind the poll felt sound. Surely, in this era of the Great Resignation, with nonprofits losing employees to the retail sector of all places, two things ought to be true:
1. Nonprofits would want to sing the praises of any funders who are supporting their need to offer better wages and benefits in order to attract and keep staff.
2. We’re still in the midst of what most funders will tell you is an awakening to racial equity issues. At the same time, excess wealth, and the individuals and institutions that hold on to that wealth, are being increasingly criticized. Surely, any funders out there putting their grantmaking where their high-minded equity statements are would want to let the world, or at least, Inside Philanthropy readers, know about all it.
All that preamble aside, the results of my research don’t exactly rate a drumroll: We were only able to find a single funder that has moved money to nonprofits specifically to support the basic economic needs of those nonprofit’s workers.
That doesn’t mean there aren’t any funders providing any kind of support for nonprofit staffs, of course. There is a small group of funders interested in staff wellbeing and things like sabbaticals and self-care. Additionally, some large, long-term general operating support can potentially allow grantees the kind of leeway they need to offer generous salary and benefit packages. But experts and nonprofits say that wages and benefits are all too often at the very bottom of a long list of needs that tend to come first, particularly since general operating funds can be so hard to come by. Given the recent attention on the Great Resignation and staffing issues affecting nonprofits, you’d think there would be foundations and donors out there seeing that nonprofit pay is a problem for the sector and stepping up to solve that problem as part of their mission.
As for the experts I consulted? Not one of them had heard of a single such funder. Funders are aware of this issue and are talking about it, I was told — and as a recent IP report explains. But all that talk hasn’t yet added up to a significant boost to nonprofit workers’ paychecks.
To be fair, the funder I did find — the William Stamps Farish Fund — has made recent grants to two nonprofits that will slightly boost the affected workers’ bottom lines. Both are new efforts, and Farish is asking the grantees involved to study the results to see whether or how their grants affect employee retention at the two nonprofits involved.
It’s also important to mention that my poll specifically asked about funders that “are getting it right in terms of supporting living wages and other nonprofit workforce needs.” As this project progressed, I learned about funders providing professional development support and funder efforts to encourage grantees to improve the quality of the jobs nonprofits are offering. I’ll get back to those and other topics as part of IP’s overall coverage of private funders’ part in the nonprofit workforce crisis. But my goal was to learn how many U.S. funders make living wages, health insurance and other essential benefits like paid time off part of their grantmaking practices.
These results are, honestly, depressing. Betsy Leondar-Wright, project director of Staffing the Mission, said that her organization has been doing research and having conversations with funders on the topic. In a review of more than 100 foundation grant applications, she said, “it appears to be almost nonexistent for U.S. foundations to communicate concern for staff job quality or to commit to funding good jobs. No application forms ask about health insurance or pay ratios, as far as we have seen.” Further, she said, “in a preliminary survey of foundations and in conversations with grantmakers, we learned of overhead limits as low as 10%, and formal and informal pressure to keep wages down.”
Rusty Stahl, president and CEO of Fund the People, said that he can’t think of a single funder that moves money solely for wages and benefits.
We’re not talking about high salaries for nonprofit C-suite staff here. For example, back in 2015, when California raised the state’s legally mandated minimum wage, neither the public nor the private sectors stepped up to help nonprofits comply with the law. The state didn’t update existing contracts to support nonprofits facing sudden increases to their budgets of $50,000 and up. On the private funding side, said California Association of Nonprofits CEO Jan Masaoka, to her knowledge, only two foundations brought the issue to their boards in response to the association’s open letter urging funders to help.
“Although both [funders] let me know there was a lot of sympathy for the issue, neither of those acted on it,” she said. “We found this frustrating, not only because foundations weren’t stepping up to help the lowest paid workers in the nonprofit workforce, but because it and their previous formal and informal statements supporting minimum wage increases seem sanctimonious.”
A final call for responses, and a word of advice
Again, to be fair, the initial poll and discussions I have conducted on the issue of funders supporting nonprofit workers’ wages and benefits were definitely limited in their scope. With that in mind, part of the point of this post is to continue my Diogenes-like search for funders that understand that, without people, there won’t be programs — and move their money accordingly.
If you work or make decisions for such a funder, or for a funder that is seriously considering making nonprofit workers’ economic wellbeing a feature of your grantmaking, please contact me at: dawnw@insidephilanthropy.com. If you lead or work for a nonprofit and want to sing the praises of your worker-supporting funders, please likewise reach out either on or off the record.
Worker wellbeing, which starts at bread-and-butter issues like living wages, paid time off and health insurance, isn’t some kind of luxury. It’s essential, not just to the quality of the services nonprofits can offer, but to their ability to serve their missions at all. Or, as William Stamps Farish Fund Executive Director Carolyn Watson said, “We’ve invested considerable resources into nonprofits. And for them to not be able to do their mission for lack of talent really ties one arm behind their back.”