Dear Veritas,

I am in a leadership role at an organisation that has been struggling to get fully staffed for months, thanks to the overall competition for labour where we are located. We do our best with pay and benefits, but we can’t offer more than what we currently do – and candidates are demanding more. Having more employees on staff would make it easier to commit more time to funding applications to pay them better (and run better programmes!), but we can’t bring them on because they’re not willing to work for what we offer. You understand the terrible loop we are in! What can I do?

Sincerely,
Alone in the Cycle

Dear Alone in the Cycle,

I sympathize. I’ve worked in nonprofits that are forced to do a lot with a little and then expected to have the wherewithal to secure the funding they need to just survive, let alone function optimally.

Unfortunately, the hamster wheel you describe is still much too commonplace, but due to the ravages of the pandemic, it’s become a full-blown crisis. Today, nonprofits are responding to escalating demands for their services while struggling to retain staff and fill vacancies — all in the face of funding that has slowed to a trickle.

Businesses have also faced a labour shortage, but they’re able to provide higher wages to attract workers. As you note, most nonprofits, especially younger organizations operating on shoestring budgets, don’t have this option. As Rick Cohen of the National Council of Nonprofits, which recently issued a major report about this crisis, says, ‘Nonprofits are really boxed in because we want to raise wages, but the funding just isn’t there…. A lot of nonprofits operate with government contracts that pay a certain amount, and those contracts aren’t being renegotiated to allow nonprofits to pay their workers more, and so [they] can’t really compete when Amazon or Target or Walmart raise their wages.’

No, Target and Walmart aren’t nonprofits, but companies like them are becoming more attractive options for people who want to work in the nonprofit sector but simply can’t afford to. Data, in fact, indicate that there are tens of thousands of nonprofit sector openings, but they’re going unfilled not because workers are dropping out of the workforce but because they’re being successfully lured away by better jobs.

Nonprofits are really boxed in because we want to raise wages, but the funding just isn’t there.

So what’s a nonprofit to do? This may sound obvious but take a minute to assess how competitive your salaries really are. Do some research to figure out exactly what other organizations with similar budgets, location, and/or missions are offering. Are salaries really as high as they’re purported to be? Talk to these organizations to see what they’re doing to retain and attract top talent. Scan ‘best places to work’ reports to get a sense of why they’re seen as such.

If you are 100 per cent sure that what you’re offering isn’t sufficient to attract and retain workers, consider non-financial incentives such as unlimited flexible vacation time, remote or hybrid work arrangements, flexible hours, or subsidized childcare — things that are particularly important to working parents and younger employees who prioritize work-life balance.

It’s also important to actively cultivate a positive workplace culture. High salaries are nice, but if the organisation has an unpleasant work environment, those won’t be enough to attract and retain even the most financially-driven workers. Offering support, mentoring, flexibility, training, professional development, and collaborative opportunities go a long way in retaining workers who are feeling strained.

Today, nonprofits are responding to escalating demands for their services while struggling to retain staff and fill vacancies — all in the face of funding that has slowed to a trickle.

If your organisation isn’t providing front-line, urgent services, think about taking a step back and assessing whether your operations, programmes, and/or budget could be recalibrated in ways that are more cost-saving or less labour intensive for staff. During the pandemic, many nonprofits found that some of their assumptions about what they thought needed to be done onsite/in-person were blown out of the water.

This may sound counterintuitive, but it’s important to allocate resources to bringing in people who can help you raise the funds you need so you’re not having to constantly play catch up. Smaller nonprofits, in particular, tend to see marketing, fundraising, and communications as tangential to core programme services, but when they do hire people with these skills, they often discover a huge return on their investments in the form of increased funding, visibility, and long-term financial sustainability. And it’s not necessary to pay exorbitant salaries. I often advise organizations seeking development help to consider hiring a less senior person who has the strategic and communications skills to start and can then be ‘trained up.’

Finally, don’t lose hope. Some people do still want to work for a nonprofit because they’re committed to its mission. According to a survey by the Harvard Business Review and the Energy Project, ‘employees who derive meaning and significance from their work were more than three times as likely to stay with their organisations.’ Keeping your eyes on the prize – your mission and your goals – is in itself a strategy that can retain staff or attract employees from other sectors, even if it means taking a pay cut.

Sincerely,
Veritas

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