I fear this will be one of the rare times where my age shows as I grapple with sounding very like a “get off the lawn type.” However, in recent weeks, I have found myself realizing that our world is really shifting and while some of the not-so-great shifts we are seeing are the result of lackluster leadership globally, denial of reality, and the rampant capitalism that seeks to choke the life out of us by making it impossible to keep our heads above water—some of it is generational change. And, for myriad reasons, the younger generation largely doesn’t seem to realize that we as individuals can do something to effect greater change, despite the stream of gloom-and-doom messaging that is fed to us 24/7 via our smartphones. More on that after I go into a bit more backstory.
I have spent almost the entirety of my career working in the nonprofit sector. I have not worked at a for-profit entity since I was 22, and I have never worked for the government. It wasn’t fully intentional, but I knew that out of the three sectors, I probably wasn’t a match for the government and—well, I wanted my work to have meaning beyond earning money. In hindsight, I still question my judgment at times, but for the last almost 30 years, I have done work that is meaningful. It was meaningful enough that because I wanted to have a greater impact, I was inspired to actually go back to school after dropping out of high school, eventually earning both a bachelor’s degree and a master’s degree—and seriously having considered a Ph.D. at one point.
After a career spent in the nonprofit sector, I am aware of the various critiques about the so-called “nonprofit-industrial complex.” To be fair, some of the critiques are valid, but the problem is people see nonprofits as a one-sized endeavor and assume they are the same across the board, when that is absolutely not true.
A hospital, an Ivy League university, an art museum, a grassroots anti-racism organization, a homeless shelter, a food pantry, and the local VFW. What do they all have in common? They are all examples of nonprofit organizations, and we are all required to file a form 990 (nonprofit tax return) assuming we have revenue over $25,000 annually. But, as you can see, they are all vastly different types of organizations.
When we speak of nonprofits with a broad brush, we fail to see the diversity of types of nonprofits. Some are multimillion-dollar, if not billion-dollar, organizations. Some are volunteer-led and -run with barely any revenue. And many nonprofits fall into the small- to mid-sized range.
About 21% of nonprofits have an annual budget of less than $50,000 and another 18% have a budget between $50,000 and $100,000. Obviously, these two categories of nonprofits are operating on tattered shoestrings and lots of hope, often without any paid staff. And if they do have paid staff, they are most likely not full-time. My first two executive director gigs were at tiny organizations. In fact, I took a part-time position running an entire organization for $14 an hour in 2008. Realistically speaking, though, the job was really full time and offered no benefits, and the only reason I could take it and stay there was because my actual living was underwritten by my then-husband. Most people who work or volunteer at organizations in this size range care little for money; they are truly committed to the mission or desperately trying to get experience.
Next up is small- to mid-sized organizations, with budgets between $100,000 and $250,000 annually. Still small but more stable, and organizations of this size make up 21% of all nonprofits. This would describe my current organization. When I was hired in 2014, our annual budget ran between $140,000 to $180,000, typically on the lower end of that spectrum. When I was hired, we had one full-time employee, the executive director (which is what I was hired to be) and several very part-time employees along with a slew of interns and volunteers to meet our mission.
Next up, we have organizations with budgets between $250,000 and $500,000. These organizations represent 11% of all nonprofit organizations. At this point, you can afford to have one or two full-time employees and maybe even offer them some benefits, but no one is getting rich here.
The two large categories of nonprofits are orgs with budgets between $500,000 and $1 million, which account for 9% of all nonprofits, and the really big players with budgets of $1 million and over which account for 20% of all nonprofits.
As you can see, most nonprofit organizations have annual budgets under $500,000 a year, an amount that must pay salaries, health insurance, program costs, rent for a space, utilities, etc.
Oh, and taxes. Far too many people mistakenly think nonprofits pay no taxes. But if we have employees we pay the employer portion of payroll taxes, which can add up to a tidy little sum—and it is a cost of doing business that you can’t exactly write a grant to get reimbursement for. Just one of the many invisible costs people don’t see and don’t think exist when they talk trash about nonprofits and how they spend their money. These kinds of costs are yet another reason that nonprofit salaries at the vast majority of such organizations are not competitive. The only time nonprofits are exempt from taxes is if they own land—see churches, for example—and even they may have payroll taxes to deal with if they have staff.
Speaking of money, how do most nonprofits get their revenue? Fees for services, donations, special events, federal/state funding, and foundation grants. Depending on the type of operations and what they offer, they may be completely funded by state/federal funds and grants. They are the lucky ducks because in their case, their funding may be “stable.” That was somewhat the case when I ran a youth development agency. We were tiny, but we had a small amount of federal and state funds that covered our food costs for the kids and teens, and we were exempt from paying taxes on our supplies. We also had annual United Way funding and a few small grants that kept us in operation.
Again, most organizations have a mix of funding streams and rely on members of their community for support whether by direct giving, supporting events that bring in revenue, or fee-for-service. This is deeply applicable to most organizations in the under $500,000 range.
The big boy organizations have the same mix but because they are bigger, well, they get better access to funding. It’s hard for a $200,000-a-year organization to get large grants, for a lot of reasons. But if you are raking in that $1 million plus, you have access to far more stable and diverse revenue streams and yeah, it’s unfair.
So why am I telling you all this? Well, because in recent years, the expectations that have been placed on all nonprofits are not in line with reality. Most are operating on shoestring budgets and in dire need of volunteers and funding at a time when older generations, namely Boomers, are stepping back from giving as much of their time and money as they once did. And, to be honest, younger generations are not stepping up. I am not shaming folks; I understand the reasons and many of them are valid. But it’s an uncomfortable truth.
I have been living this reality since late 2020, when all my old-timers stepped off our board after years and, in some cases, decades of service.
Seriously, my board chair at that time had been with us for almost 20 years. She had raised her kids while working full time and serving on our board. Many of the board members who voted to hire me in 2020 had been in the same position. All wanting to see younger people join the board and hoping that because we had financially stabilized under the first six years of my leadership and actually reached that golden space of over $500,000 a year that we might be able to attract younger board members if there was less emphasis on fundraising.
Oh, did I mention that nonprofit boards, which are required by law, are all-volunteer and those volunteers assume legal and fiduciary responsibility for the organization and oversight of the chief executive, commonly called the executive director? Though for tiny organizations, the board itself may carry out the mission along with volunteers. To be certain, board membership is a serious commitment but depending on the mission of the organization, it can be rewarding. But it’s a lot of responsibility and it’s not paid.
I won’t bore you even further but in the three years since all my old-timers left, finding stable and committed board members who are committed has been even harder than a perimenopausal woman in her 50s trying to lose weight. Granted, my current board is excellent, but they also are an interim board, only committed for a year to help stabilize things programmatically and work on our vision. They are also not a fundraising-focused board.
Lest you think this is just a problem I am seeing, I will say that nonprofits of all stripes are seeing a seismic shift as we face a generational shift in attitudes. Free labor is considered exploitation by many younger folks and yet for nonprofits, we are constrained by miniscule budgets and often the only way to get things done is with volunteers and unpaid interns.
In an ideal world, we could pay everyone but in the world we currently live in—for most of us—that is not reality. We can barely pay the actual staff and we’re lucky if we can keep up with the actual cost of living.
In a four-year span, I raised certain salaries by almost 50% and still have been told the salary is too low. Personally, my own salary is about 30% to 40% below market and if I lived in Boston, where we are located, I doubt I could afford to stay. Yet in a racist world, the work we provide is still very much needed. So, the common refrain of “don’t be in business if you can’t afford to pay” isn’t reasonable or applicable. Nor is it applicable to the many organizations across the country that provide vital services, community centers for youth, food pantries, etc.
No, capitalism run amok and a change in generational attitudes threatens the sector that had historically plugged the gaps left by government and the for-profit sector. The uncomfortable truth is that these services and groups only exist if there is an altruistic spirit—and we also have to work to shift the thinking of those that fund our work. Hello, foundations! Give us more with less strings attached.
What prompted this post was a local situation. Last weekend was the annual Pride Parade in Portland, Maine. The local organizers dropped the ball, and there was no ASL interpretation for the parade, which made the event inaccessible to the deaf and hard of hearing LGBTQ community. Unfortunately, this was not announced until mere hours before the festivities were to kick off. In fact, the board chair for the group announced it at 1:30 a.m. and the parade was scheduled to start at 1 p.m. To say it was bad look is an understatement, and many people made their feelings known—which they absolutely should have, as this event has always prided itself on being accessible and no ASL interpretation is definitely not living their values.
I was curious about how such a group could drop the ball; I mean this is huge. So, I pulled their 990 (nonprofit tax return) and read it. A 990 is more than the figures; it actually gives you a snapshot of the stability of an organization—or instability. I was struck by the fact that they had no paid staff and while their budget was a little over $100,000, most of that does go toward putting on the event.
My initial thought was: Did they have enough volunteers? Was it possible that they didn’t have enough volunteers, and someone dropped the ball, and it wasn’t discovered until it was too late? According to reports, it seems that is exactly what happened and while I understand the anger and frustration, I would say that this unfortunate situation is increasingly becoming common in nonprofits as we see a shift away from organizational volunteering. Balls dropped and things missed. Big things are missed and events not flowing as they should. People harmed.
I can’t speak to Portland Pride’s internal workings of how this mistake happened. But having put on an event in the last year with CCI, I can say that there is a shift with people showing up less and committing less, and it impacts our communities. It impacts our mission and work. Whether it is the annual Pride celebration, anti-racism leadership celebration, or fundraisers for needed services.
If people no longer commit with time or money, the sector of our society that works for the common good without regard to money will come to a standstill. The nonprofit sector is not some behemoth of fat cats getting paid out the ass. Most of us are in it because we feel we can do something. Yes, there are some fat cats, but most nonprofit leaders are not making six- and seven-figure salaries. Hell, some of us don’t even have retirement plans and we are inching closer to retirement age. Please don’t erase us in this narrative of an unfeeling “nonprofit-industrial complex” machine that isn’t the reality for the vast majority.
Online, people speak of feeling helpless in the face of great societal change and destruction, but the truth is that it is possible to do something. Volunteer. Attend program and fundraising events. If you can afford an extra few bucks, donate. Join boards and committees of the groups and causes that matter to you. Just as an aside, there are still organizations and groups offering COVID-cautious ways to get involved—a number, including my own, no longer do board meetings in person. Don’t assume things are not accessible or worth it; see how you can create change in your own way in your community, whether it is your geographic community or a community of causes you are passionate about.
Be the change you wish to see and extend grace when mistakes happen.
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