There’s a widespread assumption that it’s OK for nonprofit employees to earn less than their for-profit peers. We actually don’t think it’s OK – that’s what this podcast is about – but it’s certainly common. Which is really too bad; paying nonprofit staff low wages is neither wise nor good, and could even undermine the organization’s ability to achieve its mission. If anything related to fundraising demands rethinking, then surely raising enough money to compensate employees appropriately is it.
Ruth McCambridge, the managing editor of The Nonprofit Quarterly, has done some research on this issue. Her findings provide a deep and serious challenge to the assumption that low nonprofit wages are acceptable. In fact, Ruth suggests in some sectors, low wages are producing an “industry of poverty.” Ruth and I discuss this subject at length in this podcast. You can also read more about this in her article “The Nonprofit Wage Ghetto” in the September 2016 issue of the magazine.
While most nonprofit leaders may earn less than their counterparts in established for-profits, those at the lower end of the hierarchy are most likely to suffer – badly – from the Nonprofit Wage Ghetto. Her studies show a majority of front-line caregivers, especially those in childcare, elder care and care for the disabled, are so poorly compensated they often need assistance programs themselves. These jobs require difficult hours, as well as high physical and emotional demands. Happily, Ruth suggests some innovative trends, plus a call to action on the part of governments at all levels, to address this inequity.