The National Council of Nonprofits released the results of its updated Nonprofit Workforce Survey recently, just in time for Labor Day. The good news is that the nonprofit hiring crisis isn’t quite as bad as it was when the report was first released in 2021. The bad news is summed up in the new report’s subtitle: “Communities Suffer as the Nonprofit Workforce Shortage Crisis Continues.”
It’s impossible to make a direct, apples-to-apples comparison between NCN’s 2021 report and its 2023 iteration because researchers modified, and in some cases, expanded their questions to follow up on information they gleaned from the testimonials that were part of the original report. However, several key facts remain clear: The nonprofit sector still can’t afford to hire and retain essential staff, this hiring crisis is still causing delays and sometimes even the elimination of services, and, last but not least, philanthropic funders have played a key role in creating the crisis and will have to make major reforms in order to solve it.
In a testimonial in this year’s report, Swan Valley Connections in Montana summed up the dire situation facing nonprofits. “We just can’t keep up with the need for fundraising, the increasing demands for our services and classes, the rate of pay that we need to pay people, and the cost of rent.”
Slightly better numbers and a very disturbing fact
When we reported on NCN’s 2021 survey last year, the numbers were frightening. At the time, 76% of responding nonprofits had vacancy rates of 10% or more; 55% reported vacancy rates of 20% or more, and 16% reported that more than 30% of their positions were going unfilled. The respondents’ waiting list situation was equally scary. As I wrote at the time, 26% of the survey’s responding organizations reported that their waiting lists for services were more than a month long. Some groups said that people in need are waiting more than a year for help — if they receive it at all.
While NCN’s questions varied slightly this year, the most recent statistics on vacancies and wait times remain highly concerning. One-third of the respondents (33.8%) reported that 20% or more of their jobs were going unfilled, and nearly another third (32.7%) said their vacancy rates were somewhere from 10% to 19%. Meanwhile, 1 in 4 (24.4%) said they had waiting lists of more than a week; 11.5% said their waiting lists were from one to four weeks; and 12.9% said their waiting lists were more than a month long, “some stretching out longer than a year.”
While the overall numbers have improved somewhat, it’s important to remember that not all nonprofits provide direct services (and thus have waiting lists), and some that do include those services as part of a variety of other programs. This makes it more difficult to get a firm handle on waiting list rates. Waiting list statistics also leave out the impact, like cutting the number or variety of programs, that staffing shortages have on nonprofits that don’t offer direct services. Additionally, the improvement in the job vacancy rate could be explained in part by the fact that some nonprofits are axing positions. According to NCN’s report, “One human services provider in Nebraska acknowledged that they do not have vacancies, but only because they were forced to eliminate staff positions they could not afford to pay.”
This year’s survey makes it clear just how much of a potential impact these staffing shortages are having on the vulnerable people and communities that depend on nonprofit services. Three out of four respondents (74%) reported vacancies in their program and service delivery positions, while two out of five (41.1%) reported vacant entry-level positions. These vacant jobs mean that meals aren’t being served, job-seekers aren’t receiving the training they need, and at-risk children are being left at risk. Wherever nonprofits are providing direct services across the country, chances are that vulnerable people aren’t being served because virtually no one can afford to work at the jobs that would serve them.
Money, money and burnout (but also money)
The nonprofits responding to NCN’s 2023 survey were clear about the reasons for the current nonprofit workforce crisis. Nearly three out of four, or 72.2%, attributed their hiring issues to salary competition; budget constraints and insufficient funds were factors cited by 66.3%; and burnout among nonprofit staff was listed as the third-most prevalent factor at just over 50%. To put it bluntly, Target and Walmart are offering more money, according to survey co-author and NCN Policy Associate Jessica Mendieta, who told me that the surveyed nonprofits were clear about the number of staffers they’re losing to the retail sector.
Substandard wages and nonprofit budget constraints are far from the sole cause of staff burnout, but they are definitely a prime factor. Mendieta cited the increased workload that staff take on when their peers leave for better paychecks: “(The remaining staff) were doing maybe a two-person job before, and now they’re doing the work of three people, which gets overwhelming after a while.”
Nor are the workers who are leaving doing so out of a lack of commitment to the mission. “The very, very disturbing thing to me is the people who went to social work school and got their masters and have student loans that have left,” said David Thompson, vice president of public policy at NCN. “Those are people who committed their lives to careers they believed in. And they left because nonprofits couldn’t pay enough.”
New recommendations, same as the old recommendations
Just as the factors that are contributing to the nonprofit employment crisis are hardly a surprise, it’s also clear who’s mostly responsible for those factors in the first place: funders. And while NCN’s report focuses almost entirely on the government funders that provide the bulk of many nonprofits’ funding in areas like healthcare and direct services, the majority of the recommendations to solve this crisis apply equally to public and private funders alike.
That is, ditch short-term, program-only grants for multi-year, unrestricted funding. Simplify the entire process, from applications through reporting. Government sector funders need to stop using the pay-for-service model, which requires nonprofits to front necessary expenses and then wait (and wait) for repayment. And, as advocates like Fund the People and Staffing the Mission — not to mention our own coverage in Inside Philanthropy — have emphasized time and again, it’s long past time for funders, public and private alike, to pay for nonprofits’ full costs of doing business. Experts in the field are clear: Those costs include paying living wages.
“Put simply, nonprofit people are nonprofit impact,” said Rusty Stahl, founder, president and CEO of Fund the People. “This is not just an issue for government to address as it outsources social services to nonprofits. It is an issue that private philanthropy must address across all funding areas. Every foundation, donor, giving circle and grantmaker should be asking how they will invest in the workforce of the organizations and causes they support.”
The stakes in this crisis are clear: “To put it bluntly, a shortage of workers at a fast food drive-thru or at the Department of Motor Vehicles means an inconvenience,” said NCN’s Thompson in the council’s announcement about the new report. “But a workforce shortage at a nonprofit means people who are not receiving vital, sometimes lifesaving, services like food to eat or a bed to sleep in.”
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