Nonprofits deserve at least as good working conditions as their funders! (and here’s how to get there)
- An ergonomics assessment for staff work stations
- Catered staff lunch once a week
- Training and development budget for every employee
- 15% retirement contribution from employer
- Liveable wages for all staff!
How do you think your Board or funders would react to see those items in your budget?
A small portion of you may have incredible Board members and donors who understand the critical need for investing in staff, and possibly already offer some of these things. But I’ve worked with many small nonprofits across the globe and can tell you that the most common reaction is that these types of expenses are wasteful or lavish.
Those are all things I got as an employee at a foundation (which is also a nonprofit!). Why is it ok for the funder to provide great benefits and wages but we balk at the idea of the grantee partner providing them?
Retaining and supporting employees are common expenses in many companies because great talent is what makes the organization successful! Research from UC Berkeley’s Center for Social Sector Leadership suggests that businesses spend at least four times more than nonprofits per person on talent development.
Nonprofit workers have some of the hardest jobs solving the world’s toughest societal challenges, so why is it the common mindset that they deserve the least?
People-related costs are not just overhead, they are critical to sustaining the nonprofit workforce so they can focus on making greater impact in the world.
I’m not saying it’s ok for nonprofits, including foundations, to spend more money on themselves than on their programs. But that is so far from the reality of most nonprofits that it’s not what we should be concerned about.
What we should be concerned about is that many nonprofit staff are under-resourced, burned out, and leaving the sector. (74% of nonprofit employees are considering leaving their job according to Social Impact Staff Retention Project)
Changing the public’s mindset starts with changing our own
We need to start changing the public’s mindset about the value of the nonprofit workforce and what it costs to retain high-performing talent in the sector. Changing the public’s mindset starts with changing our own mindsets as a nonprofit community. Nonprofit leaders often feel a sense of guilt in shifting budget toward creating higher wages and better benefits because it can feel like a zero-sum game where programs get less if “overhead” costs go up.
But this distinction does not exist in for-profit companies. Who has ever questioned that the quality of your cup of coffee will suffer if Starbucks starts spending more of their budget on higher wages/benefits and a better work environment for their barista? In fact, it feels like the opposite is true; if your barista loves their job because they are given a great wage, a thriving work environment, and supportive benefits, then they might just have the energy to put extra care into making the perfect cup of coffee for you.
The same logic holds true for nonprofit workers, especially those in community-serving organizations. If you take great care of your team, then that will directly translate into higher quality program delivery and bigger impact.
Once we convince ourselves of that logic, you also need to convince your Board and funders. Check out this link of amazing resources to make the case that investing in nonprofit talent is critical to making impact: Case Making – Fund the People Toolkit. Also, use the nonprofit hive community to spark ideas and conversation around current attitudes and how we can work together to move away from the scarcity mindset.
Sounds great, but also sounds like just more $$$ I have to fundraise
Here is the elephant in the room. Some of you are thinking that even if you and your Board are convinced on the importance of creating a better work environment, the reality is that it would take a herculean effort to raise the amount of funds needed to fully take care of your teams.
This will not be an overnight or one-time action solution. Your organization will need a thoughtful people strategy that lays out how you will attract, retain, and develop staff over time in alignment with your programmatic strategic goals and understand that it will take time to implement. Your people strategy then needs to be built into your organization’s strategic plan, annual budgets, and funding proposals. You don’t have to make all the changes at once, nor will that be possible.
How do you create a people strategy, and what actions do you prioritize with a limited budget?
I created the Thrive Model to have a simple framework for nonprofits to make a strategy for getting to a thriving work environment. You need to have effective HR practices & policies in place to sustain your team, but tackling all these areas is overwhelming. Instead let’s figure out what needs the most attention and build a sensible roadmap that does fit with the realities of your budget. 
Here’s how:
- Stabilize: First, check to see if you’re starting on a stable foundation. These are the fundamentals to make sure you’re both legally compliant and have some organizational basics in place. Are you classifying and paying employees correctly, do you offer basic benefits, do you have required written policies, an org chart, and job descriptions? You start here because you’re going to have a hard time making higher-level changes without the organizational foundation.
- Support: Next is to start developing the processes that will enable the best from your team. This includes a compensation plan with an approach for increases each year, an effective performance review process, and established manager expectations and training. Additionally you want to make sure employees start on the right foot with equity-centered hiring practices and inclusive onboarding. This level is where we start looking at the areas that really affect employees’ ability to do their job well.
- Sustain: Finally, start creating the conditions that will make lasting impact in the organization and affect the culture for the long-run. This level includes longer-term learning & development for all staff, succession planning, employee wellness programs and additional benefits that will increase employee satisfaction and engagement. You cannot have a thriving culture that supports innovation without implementing systems that support a culture of open feedback and continuous improvement. Culture change takes shifts in acceptable behavior over time and needs to be supported by organizational practices and systems that reinforce the culture you’re after. That’s why the entire Thrive Model pyramid is about creating the right systems/processes over time to create a sustainable thriving environment.
This doesn’t have to be only a linear path where you can’t start on employee engagement activities before you have a compensation plan. The point is to understand where you’re at in all the people-focused areas of your organization, and make a plan for when and how you will address these different areas. Start with the basics and work your way up the pyramid.
And most importantly, COMMUNICATE often to your team, board, and funders about your current state, your identified needs, and the action plan. Support each other and get ideas from the nonprofit community by asking how other nonprofit leaders are handling these topics.
If you want more hands-on support,
Click here to learn more about ALL-in 4 Impact’s HR audit service to assess your organization using the Thrive model and develop a recommended roadmap for getting to Thrive no matter your starting point.
Any questions? Please feel free to email me and connect on Linkedin. Check out my website for more information.
I hope to connect with many of you in a future Nonprofit Hive match up!
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Arum Lee Lansel is the founder of ALL-in 4 Impact, a boutique consulting firm that works with small nonprofits to strengthen HR practices and develop a people strategy where everyone can thrive.
Her career spans nonprofit, philanthropy, and venture capital, and she brings this unique mix of experiences toward her personal mission to support mission-driven leaders to achieve more impact by investing in their people. Previously she worked at the David & Lucile Packard Foundation on the organizational effectiveness team where she supported nonprofits across the globe on organizational strengthening.
She was also an HR strategy leader at a leading venture capital firm, General Catalyst, and led HR strategy, change management, and racial equity initiatives. Arum offers one-off HR advisory sessions, project-based support, and ongoing HR leadership. It would be her joy to partner with you to create a joyful and effective workplace where you and your team can thrive. Find out more on her website, reach out at arum@allin4impact.com, or book a discovery call to discuss your needs.