Nonprofits need to stop being stingy with wages and benefits.

There. I’ve said it.

I’m not naïve. Every nonprofit I know is scrambling to piece together lost revenue. The Urban Institute reported that 1 out of 3 nonprofits lost government funding last year! In San Diego where I live, 81% of nonprofits saw a decrease in revenue from at least one major source.

At the same time, demand for most nonprofit services is skyrocketing, resulting in a pressure cooker of pain for front line staff who are forced to cut back services or turn away people in need. In my community, 68% of nonprofits saw an increase in demand for services; 55% have waiting lists. Given the enormous cuts to food and medical care included in the “Big, Beautiful Bill,” is there any doubt that things are going to get A LOT worse?

And is it any surprise that 91% of nonprofit staff report worse emotional well-being?

Yes, we are the sector of self-sacrifice, but we have to ask when is it too much?

The irony is nickel and diming nonprofit staff on salary and benefits doesn’t save nonprofits money.  It costs nonprofits money and destabilizes organizations by accelerating the revolving door.

(Nonprofit turnover rates average 19–27%, far higher than other industries).

If we want strong nonprofits, we need a strong nonprofit workforce.

If we want a strong nonprofit workforce, we need wages that meet the cost of living.

And if we want wages that meet the cost of living, we need to start with the truth that ALICE — an initiative that tracks households who are Asset Limited, Income Constrained, Employed — lays bare.

According to ALICE in the Nonprofit Workforce (2024), 22% of nonprofit workers — 3 million people — live below the ALICE Threshold, meaning they earn less than what it costs to survive in their own communities.  And that’s on top of the 5% living in poverty.

And it’s not just wages. It’s also benefits — especially health insurance — which is grossly expensive and climbing fast.

A national analysis of 33,804 nonprofits found that employee benefit costs are rising at a median rate of 12.7% annually, with some organizations seeing increases of more than 40% year‑over‑year.  

But instead of cutting benefits for overburdened staff, nonprofits need to double‑down. We need to ensure people have strong benefits and we need to pay them more because the alternative is organizational collapse.

This isn’t just an economic issue.

It’s a mission issue.

It’s a justice issue.

It’s a leadership issue.

And it’s one that nonprofits can no longer afford to ignore. If we want strong nonprofits, we need a strong nonprofit workforce.

We need to speak up about this critical need to our existing funders and explain it to those waiting to open their wallets to our organizations.

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Pat Libby is a change management consultant working principally with nonprofit corporations. She is author of The Empowered Citizens Guide: 10 Steps to Passing a Law that Matters to You, Oxford University Press, The Lobbying Strategy Handbook, second edition, Oxford University Press, and Cases in Nonprofit Management, SAGE. She has served as an academic, senior executive, board member, and consultant to innumerable nonprofit organizations and foundations for more than three decades.

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