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What does it mean when the organizations tasked with reducing poverty end up perpetuating it from within? How can the nonprofit sector – a sector dedicated to the common good – succeed when its own workforce cannot afford rent, groceries, or childcare? 

As a nation, we currently face increasing inequality. This is characterized by a K-shaped economy, in which the wealthiest Americans continue to prosper while more and more everyday people struggle to meet their basic needs. 

While much is being said in the current moment about the affordability crisis, at its roots is really a job quality crisis. A quality job is one that meets a worker’s needs, offering a living wage, adequate benefits, opportunities to build skills and advance, and a safe and supportive work environment. But for many, wages are not sufficient to afford basic necessities, childcare is out of reach, and healthcare premiums are unattainable. Plus, parental leave is still not protected by law. Even companies once known for their perks and benefits are now rolling back what they once offered. Workers are dissatisfied, and many are disengaged. For the first time since Gallup began tracking, more workers report struggling in their lives (49%) than thriving (46%). 

Quality jobs are desperately needed, and this is especially true within the nonprofit sector, which employs approximately 12.8 million workers, or 10% of private-sector employment.

Nonprofits historically and currently rely on both low-pay and unpaid (i.e. volunteer) work. Many of these jobs, from domestic violence shelter staff to community health clinic workers to employment and education case managers, are low-quality. They are typically characterized by insufficient pay, a lack of benefits and training, and little to no opportunities for advancement or autonomy. New research by the Social Impact Staff Retention Project shows that 70% of nonprofit staff are looking for or considering a new job and only 35% plan to definitively stay working in the nonprofit sector. And, nearly 90% of nonprofit leaders are worried about staff burnout. Forbes recently called this growing loss of talent at nonprofits an “invisible crisis” – the organizations that provide critical services to our communities are weakening. 

Low-quality jobs damage organizations’ ability to execute their goals effectively. High turnover is associated with the loss of company knowledge, time-consuming search and hiring processes, and reduced staff morale. Gallup has even estimated the cost of turnover to be 50-200% of an employee’s salary. Ultimately, for nonprofits, these impacts can mean communities do not receive the vital services they need. Especially at a time of increasing inequality, this sector provides essential services to those most vulnerable. Government funding cuts are rapidly impacting the sector, simultaneously increasing the need for services while putting nonprofits themselves at risk financially. For some, this has meant reducing services and/or staff. 

Take, for example, a food pantry in my community in Michigan whose mission is to reduce food insecurity. They provide critical services to the surrounding area, redistributing food and ensuring access to those who otherwise wouldn’t be able to buy needed, nutritious groceries. I recently saw a posting for a full-time job that offered a $40,000 salary, far below a living wage for the area (estimated to be at the very least $52,621 for a single adult with no kids). Would this potential employee have to rely on the organization’s own services to afford groceries?

Research by the Harvard Business School suggests that workers concerned about being able to meet their own basic needs are less likely to be engaged in their work, less able to show up to work consistently, and less likely to stay in a job long-term. For organizations, this can lead to poor customer/client service, increased workplace injuries, lost products or unnecessary waste, unplanned closures, and even the inability to execute funded work and meet grant requirements. For communities, this can mean fewer families being able to meet their children’ s needs, reduced trust in organizations and institutions, and increased instability. 

Nonprofits can – and should – lead the way in creating better jobs. Job quality is directly linked to nonprofit organizations’ values and missions to serve their communities. While they may never be able to offer the wages of some for-profit companies, it’s important to remember that good jobs are not solely defined by wages. Living wages are imperative, but workers also need benefits like health insurance and retirement savings, stable and predictable scheduling, opportunities for training and advancement, and policies and procedures that support a sense of autonomy and purpose.  As a researcher at the Aspen Institute Economic Opportunities Program I’ve seen firsthand the impact when organizations prioritize job quality: increased staff engagement, improved employee retention, and greater organizational success. 

Funders also have an important role to play providing guidance and funding that can actually support good jobs. Some foundations have started to push for greater job quality internally, such as the Ford Foundation who has committed to ensuring that no employee makes less than a thriving living wage. While more foundations should consider this approach, it is equally important that all funders ensure their grantmaking aligns with these values. Public funders also play a key role. It is all too common for the public sector to contract services to nonprofits as a way to minimize costs, relying on workers who are often eligible for fewer benefits. Ultimately, sufficient funding and unrestricted, multi-year grants that support both services and staff are essential. 

Some critics will argue that nonprofits should continue to do more with less, operating with lean staff and little to no overhead so funds can go directly to the communities they serve. This line of thinking, however, ultimately undermines both nonprofits’ missions and their effectiveness. Further, this logic does not recognize that staff themselves, often with personal experiences relating to the issues the organization addresses, are a part of the very community nonprofits are meant to serve. 

Job quality is a way to invest in people, ensure organizations can execute their missions, and ultimately create a thriving society. It is a solution much needed, especially at a time when people are struggling to afford healthcare, gas, and groceries. Nonprofits and their funders must move away from the old logic of “do more with less” and instead start investing in their people. Simply put, we cannot build a thriving society on the backs of underpaid, undervalued workers. Our communities, our workers, and our organizations need better.