Nonprofit Pay: Low Wages Beget High Turnover

Nearly one-fifth of the privately employed workforce in New York is paid by nonprofit organizations, many of which are carrying out vital human services for the state and city governments.

But the quality of that sector is stifled by low wages, according to two executives for The Children’s Village, a large provider of child welfare and juvenile justice services in New York City.

From “The Systematic Starvation of Those Who Do Good,” an article by CEO Jeremy Kohomban and Vice President David Collins that was recently published in the Stanford Social Innovation Review:

Across the United States, nonprofits struggle to pay competitive wages, especially in the human services sector. New York nonprofits have the third-highest prevalence of low wages in the private sector, behind food service and retail. This is in spite of the fact that its human services workforce is highly skilled and highly educated—two-thirds of workers have some college education, and close to half hold bachelor’s degrees or higher.

In New York City, this has led to a twisted scenario where the people paid to administer the social safety net are also dependent on it. A 2016 report by the city’s Human Services Council’s Commission on Nonprofit Closures found that “more than one-third of New York City social service workers were eligible for safety net programs.”

Because there are a lot of young people motivated to do the kind of work that nonprofits are often tapped for, wage issues have not been a major deterrent in terms of supply. The glaring problem is that, eventually, those young workers want some upward mobility.

Youth Services Insider asked Kohomban and Collins, who have made budget cuts elsewhere to keep employee salaries competitive, how much of their turnover is attributable to workers leaving for better pay.

“Our exit interviews do not capture the number of people who leave for salary alone,” Kohomban said, in an exchange of emails. “I think the reason is simple: No one wants to claim that they are leaving for ‘money,’ it goes against the human services/social service and ‘I am a good person doing this to change the world’ ethos.”

Collins said, anecdotally, he thinks wages are the biggest reason Children’s Village loses staff to other industries, or to government jobs.

“I recently had to fill the same director position twice in 18 months because the employees were recruited into management jobs with NYC’s public child welfare agency at higher salaries,” Collins said. “We lose people to higher-paying areas of our sector (public agencies, hospitals, schools) and we also lose them from the sector entirely.”

The free market would dictate that, if wages are good enough to yield a competitive supply of workers, it would be crazy to mess with that much. If you have more people than you need willing to work at a given pay rate, what’s the motivation to compete?

The argument in youth and family services would be that college, grad school or any other pre-training won’t fully prepare you to work directly with clients, be they infants, teens or parents. It takes reps.

A beautiful artistic rendering of this is displayed in the film “Short Term 12,” where a clueless group home worker played by Remi Malek (now of “Mr. Robot” fame), struggles for months to find his voice and strategy for connecting to kids.

Livable wage issues might not be stifling entry into the human services corner of the nonprofit sector, but it does seem to hasten exits. Losing workers as they are getting the hang of it dooms these organizations to an endless cycle of training and less optimal service quality.

So how is this fixed? Collins told YSI that the contract process often starts things off on a bad premise with nonprofits.

“Different states and municipalities procure their human services contracts differently,” Collins said. “Some have vendors compete on price, which places downward pressure on wages for obvious reasons. Others (like NYC) set their price ahead of time and have vendors compete on quality/experience, which can still be an issue if the price the city sets is too low, since there is no room to negotiate.”

Kohomban suggested that a start would be a city-, county- or statewide baseline agreement on wages, something many jurisdictions do for municipal employees, firefighters and police officers. The baseline would come with some “minimum reasonable administrative overhead,” he said, and that baseline could be reviewed every three years or so to account for changes in the consumer price index.

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John Kelly, Editor in Chief, The Chronicle of Social Change
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1 Comment

  1. I am interning at a shelter in phoenix, and going through the client files, I rarely see repeating names where the case managers sign off. Most of the workers at our shelter qualify for government programs. The morale is very low. A position that requires a masters in social work with a salary of 27k isn’t very appetizing. Its a broken system.

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