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April 2008
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Funding nonprofit work: wages matter

An increase in state funding for childcare is the topic of an article in today’s Oregonian, “Little-known fact: money for day care” [link]. Some interesting details emerge, and this section in particular seemed relevant to the nonprofit scene in general:

The YMCA centers in Portland offered nearly $300,000 in child-care scholarships last year to low-income families, including Fackler’s.

Deborah Murray, executive director at the Peninsula Children’s Center in North Portland, said the difference between what the state reimbursed and her center’s costs ranged from $160 to $300 per child each month.

How did the nonprofit stay in business?

“We got a bunch of grants. Hired a full-time development director and spent our time fundraising like crazy,” Murray says.

But the low state subsidy also meant some of the center’s staff earned little more than minimum wage.

Now that the state has increased its subsidy, Murray says the reimbursement is much closer to the actual cost of care.

She’s able to give staff raises. And more of the low-income parents who bring their children to the center have been able to qualify for help. (emphasis mine)

One of the things that doesn’t make sense to me about the way funding for nonprofit works, whether the source be government grants or private donors and foundations, is that there is a bias against covering the costs of wages for the people who actually do the work. A number of the grants I managed previously had funds only for “direct services,” and required that the cost of staffing necessary to provide those “direct” services be raised elsewhere. This ongoing funding crunch makes it hard to develop new programs or take on projects, as staff are already maxed out on responsibilities–and are not being paid a living wage or close to it.

One of the most annoying things I have experienced is looking at income guidelines for some of the federally-funded housing programs and realizing that a lot of the people who provide those services earn so little that they themselves are eligible for the subsidies.


Comment from Leah
Time: April 8, 2008, 8:17 am

I agree that non-profit wages are a widely ignored issue. Granted, I work for a totally different non-profit realm (theatre), but the majority of theatrical non-profits in the city of Chicago have no-paid employees, or if they do it is rarely over part time.
Across the board in all non-profits, money for staffing is the final thought – are no staffing grants at all – only project-based ones – so despite the fact that I spend two to three times the amount of effort and time at my non-profit adminsitrative job over my “day job” (and I consider it a job and not a hobby) I have no prospect of being paid for my work. It’s frustrating to say the least.

Comment from Amy Sample Ward
Time: April 9, 2008, 2:20 pm

Many foundations are re-evaluating the role of general operating support in their grantmaking and as a need of nonprofits. General operating support can even be viewed as an opportunity for foundations to support advocacy as it isn’t lobbying but is really helping effect change.

Also on the topic of salaries, Holly posted on the NTEN blog a great discussion piece about the difference in comparable positions in for and nonprofits. You can see that post and comments here.

Thanks for sharing with us!