Got a Question About Low Nonprofit Pay? Nonprofit CEO Rusty Stahl Has Answers.

Welcome to our chat with
with nonprofit CEO Rusty Stahl.

Following up on Jim Rendon’s September cover article about the challenges nonprofit workers face because of low wages, the Chronicle has asked an expert to take your questions. Stahl, CEO of Fund the People, an organization that seeks to persuade foundations and other donors to find ways to help nonprofits cover competitive wages for workers and advance professional development, will talk about the ways nonprofits and grant makers can address the problems caused by meager compensation and too few opportunities for professional development and advancement.

He previously served as founding executive director of Emerging Practitioners in Philanthropy, a national association of young and new foundation professionals.

Thanks for all of your questions about what nonprofits can do to retain their young workers. Here are Stahl’s answers:

Q: When a nonprofit offers other great benefits outside of just direct monetary compensation (gracious PTO, flexible hours, remote work opportunities) how can the organization tell that story effectively for ‘total’ compensation?

A: That’s a good question! And you highlight a great practice. There are so many important “benefits” and developmental opportunities that cost few or no dollars. It starts with intention. That leads to managerial practices, and how managers use their time and the time of employees. I think employers could package this for prospective employees as part of how they strive to create a supportive, healthy, and equitable workplace. This may or may not be included as part of compensation. I don’t think prospective employees care whether it is called “compensation” or not. Calling it part of total compensation may backfire — it may read to some employees as a bogus argument meant to cover up below-market wages or skimpy benefits.

Q: How are foundations working to keep the federal Public Service Loan Forgiveness program alive and to actually function as intended?

A: Great question! There’s a coalition of over 90 organizations working to save and strengthen the Public Service Loan Forgiveness program. Here’s the coalition’s website and here’s the list of participating orgs. @CalNonprofits – the association of California organizations – seems to have taken a lead on advocacy around this issue. You can find their Nonprofit Student Debt Project here. For those who want to know more, here is some background from the National Council of Nonprofits @NatlCouncilNPs: “If you are employed by a nonprofit or government and have student loan debt, you may be eligible for loan forgiveness, cancellation, and/or consolidation of Federal student loans under the Public Service Loan Forgiveness program (PSLF).” But, based on my reading of the situation, the government has set a very high bar to get your debt canceled, and seem to have canceled very few people’s loans! It seems like a weakened program that is not particularly well-designed and not well-communicated to the nonprofit employers and nonprofit workers who could use it. And now the Trump Administration’s proposed budget would kill the program. See this from Council of Nonprofits.

Q: Does anyone know of how this can be changed or examples of organizations trying new models?

A: By “this”, I assume you mean this whole under-paying thing? This whole deficit of investment in the nonprofit workforce? Yes, there are folks trying – not enough, and too often in isolation, but there are efforts. My organization, @FundThePeople, has spent 5 years reframing the issue from a discourse about a deficit of nonprofit leaders, to a deficit of investment in nonprofit leaders. Our framework encourages grantmakers to bake-in talent investments into their grant funding, so that the margin of $ for staff compensation and development increases within the existing capital that flows from organized philanthropy into nonprofits. Funders like Haas Jr. Fund, Kresge Foundation, Pierce Family Foundation, Durfee Foundation, and Holland/Zeeland Community Foundation are all doing interesting work as they seek to make strategic investments to support and develop the staff of grantee organizations or other nonprofits in their areas of interest. I invite you to take a look at Fund the People’s six “field stories” highlighting promising practices at six diverse foundations and profiling some of the nonprofits they support. You can find them here.

There are important other groups acting on these issues. The folks at Bridgespan and California Philanthropy’s Full Costs Project are doing related work on ending the starvation cycle in nonprofits by helping funders to pay the real cost of running programs/organizations. In particular, five major national foundations have publicly committed to loosening their restrictions on support for non-program-specific line items (i.e., what they call “indirect costs”, and some call overhead). This work is featured in a Bridgespan-sponsored section of the current Chronicle issue. You can find an article on it here. Leading Edge has created an array of interventions to address challenges in the workplaces of Jewish nonprofit institutions. Groups like the Ballot Initiative Strategy Center, Red Hook Initiative, Hillel, Dress for Success and others are trying new models for recruitment, compensation, training, and equity in their workplaces.

Q: What recommendations or resources do you have for young professionals who want to advocate for change in salary transparency and equity across the sector?

A: Good question. Young nonprofit professionals have a critical role to play in changing attitudes and practices in the sector. They should advocate for themselves, and also think about the collective power they can build with their colleagues. They should think about specific changes that need to be made today with a sense of urgency. And they should also about the changes that need to happen in the mid-term and way over the horizon – cultivating their own sense of vision, steady endurance, and gritty persistence to bring about the future we need. It’s important to link our advocacy for own self-interest with our personal and organizational missions. Don’t get trapped in stereotypes about young people or Millennials. And don’t stereotype older people or Gen Xers or Baby Boomers.

Joining the Young Nonprofit Professionals Network and paying dues or donations to their chapter and the national organization is a crucial step. Of course there are other associations for specific fields of work within the sector, and engagement those are generally worthwhile as well. I know salary transparency is a big item folks are advocating for these days. As someone who has been a nonprofit employer in the position of hiring great folks, I think it is worthwhile to share a salary range, but leave room for negotiation as much as possible. Young professionals who are not in positions of authority may be able to help their executive directors or HR managers to understand the realities of today’s labor market, and the appeal of salary transparency to prospective new colleagues.

Advocating for equity more broadly is obviously a more complicated matter. I believe it is crucial for young nonprofit leaders to understand how investing in the nonprofit workforce can advance both effectiveness and equity, and how these two are deeply linked. This summer, my organization, Fund the People, published the Talent Justice study and toolkit to help funders and nonprofit leaders advocate for increased equity in access, advancement, and ascension in nonprofit careers. I would recommend using the research and tools to ground your advocacy. Other great resources include Building Movement Project’s Race to Lead research, and Equity in the Center’s “Awake to Woke to Work” resources.

Q: What do you see as the biggest roadblock to increasing human capital investment in the nonprofit sector?

A: There is enough capital out there to fund the salary and benefits we need, the professional development, and the support systems for staff in our organizations. It is a matter of how philanthropy and government deploy their resources. And this is shaped by their core beliefs and attitudes about how to fund the work they wish to support. This is a significant roadblock. But it is a mental roadblock, not a physical one. It is composed of myths and attitudes that nonprofit professionals, boards, donors, foundation staff and trustees, government funders, and others carry around in our heads. Myths like the made-up and harmful notion of “overhead,” which has no basis in law or reality. It is up to nonprofit professionals — executive directors, development professionals, HR folks, emerging leaders, everyone — to decide that we cannot and will not build our “business models” upon the exploitation of nonprofit labor. We have to make talent-investing part of our theories of change, strategic plans, budget, fundraising plans. They must be baked-in explicitly or implicitly to every ask of donors, every proposal to funders, every bid to governments. We must stop silencing the demand for talent-focused capital. Why? Because if nonprofits don’t start talking about it with their supporters, then foundations and donors will never understand the real need, and they will not have the motivation, rationale, or ammunition to make the case internally with their superiors.

Q: This is a recruiting question actually (and applies to all ages.) What are nonprofits doing (or could be doing) to fix HR recruiting? During the recession companies (and now nonprofits) moved increasingly to online hiring systems. They buy these proprietary (non-open) software systems largely off the shelf, and studies are starting to show they are rampant with questionable screening and AI algorithms. Plus they take far more time for job seekers to use. Given many nonprofits deal with related issues of discrimination and unemployment, what should the sector do to address its own use of these technologies? And how can we lead the rest of the sectors in raising awareness of this emerging social problem?

A: I don’t know much about this. I’ve asked some of Fund the People’s Advisory Council members who work in recruitment and HR, and I hope to get some thoughts from them to share. I will say along similar lines, as a grantee of numerous foundations, as funders have shifted from accepting proposals in hard copy or as email attachments to online application portals, the entire process of putting together a proposal has been disrupted – and often not in a particularly good way for the applicant. It has shifted from a cohesive proposal narrative to responding to character-counted application question forms. Some of these out of the box portals are extremely clunky and unhelpful. I am sure the same is true for job application online portals. I would encourage those who develop these systems, and those who purchase them to think about the user experience on both ends of the system – the paying client (the employer or funder) AND the job or grant applicant. It’s got to work for both. There could be great benefits for both sets of users, but if only the needs of the recipient is considered and not the applicant, then neither party is well served by the software. In terms of the dangers of AI and algorithms and how they bake-in discrimination, I have not doubt that this is true. I am not well versed in the issue, so I can’t offer much more. You have raised my interest, and I plan to do some research…

Q: From your perspective, what changes have there been in nonprofit talent investment trends over the last several years? What has surprised (or frustrated!) you as you’ve gone deeper into this change work?

A: Hmm. I’ve been working on this issue full-time at Fund the People for just over five years now. I don’t think there’s been significant change – yet. If we try to create something too trendy, it will be trendy for a minute, and then go away when the next trend hits. I anticipate a ‘slow burn’, where we build momentum slowly across time and space, so that when the change actually builds to a critical mass, it just seems normal and common sense. Having said that, here are three trend lines I continue to track.

1. Deficit mentality: We’ve been working hard to shift the underlying narrative and assumptions from a deficit mentality (a deficit of qualified leaders for the nonprofit sector – a narrative that was codified by a 2006 Bridgespan report oddly enough entitled “The Nonprofit Sector’s Leadership Deficit”) to an asset-based approach (lots of great nonprofit leaders, but a deficit of investment in them). I think that is very slowly starting to shift. The 2013 TED Talk by Dan Pallota was an important moment. An unspoken mia culpa by Bridgespan itself was the 2015 research article “The Nonprofit Leadership Development Deficit.” The cover story article by Jim Rendon in the Chronicle that prompted this twitter chat I hope will help continue to shift that narrative.

1. Scarcity mentality: There’s also a scarcity mentality (there’s never enough money to invest in nonprofit people) we’ve been trying to shift to a mentality of plenty (there’s plenty of money for talent-investing, it’s just a matter of changing how funders deploy the resources they already have to grant out). I don’t think this change has taken hold yet. This is a big thing I am pushing at Fund the People.

1. Strains of the Trump Era: Without getting political or partisan, the crises in social policy brought on by the Trump Administration (on issues like the Muslim ban, immigration, reproductive health, white nationalism and domestic terrorism, healthcare insurance, etc.) — as well as the fights for the sanctity of philanthropic giving and the nonprofit sector itself — have created significant challenges and opportunities for many nonprofits. The tide of new donors, activists, and volunteers is a good problem to have, but also creates real organizational challenges. All this is causing strain and burnout in large swaths of the nonprofit workforce. While many funders offer rapid response grantmaking for organizing and programmatic response, there has been very little specific funding deployed to address burnout, build-up leaders, and sustain nonprofit workers’ wellness during this time.