Supporting Small, Local Nonprofit Leaders and Staff in 2022
Since March 2020, the Catalogue has been surveying Executive Directors in our network of 400+ nonprofits to gain a better understanding of the state of the sector in the Greater Washington region. The goal is to understand how the pandemic is impacting their programming, finances, organizations, and staff.
Over two years into the pandemic, as many of us are re-familiarizing ourselves with gathering in-person, it can feel increasingly easy to forget its cumulative effects, which have weighed more heavily on people with disabilities, people caring for children, and people working jobs with low pay or working multiple jobs. These challenges can be compounded in the nonprofit sector where staff are often on the frontlines of offering urgent and critical services to the community, but who are expected to run on “passion” with little support for overhead and administrative costs.
We have seen this lead to burnout and high turnover within the sector. While the last six months, specifically, have shown overall improvement in staff and leadership engagement, we are also hearing growing worries about forecasts for an economic downturn, challenges with hiring, and resetting funding expectations given a decrease in COVID-19 relief money.
How might we as a sector prioritize the well-being of small nonprofit staff, especially nonprofit leaders, over the next year? Here are three action steps the Catalogue would like to share based on our survey findings.
1. Fund mental health support and coaching for Executive Directors.
“It is impossible to convey how stressful the last two years have been as the leader of a small nonprofit,” an Executive Director shared with us anonymously. “I feel like I have been running a sprint since March 2020.”
37.9% of Executive Directors we surveyed this summer were either feeling burnout or were on the way to burnout. Though this is an improvement over results from our last survey in December 2021, when 42.5% of Executive Directors surveyed this sentiment, it still means that nearly two out of every five small nonprofit leaders in our network are struggling.
Within the same period, the percentage of staff who are feeling burnout or close to feeling burnout (as reported by Executive Directors) decreased from 29% to 19%. This trend, while positive, reflects what we have seen Executive Directors doing — prioritizing their team and the people around them. Staff engagement is a critical component of successful nonprofit management but leaders, too, need to be adequately supported to ensure the overall health, sustainability, and impact of the organization.
Our qualitative results include stories from Executive Directors who have not taken a vacation (or even much parental leave) since the pandemic started and who are seriously considering leaving the nonprofit space due to burnout. Given that strong leadership is a big contributor to building strong teams, we need to collectively attend to the well-being of Executive Directors through providing opportunities for one-to-one and small group consultations and coaching, as well as funding more capacity building support to make the work of Executive Directors more sustainable.
2. Stop thinking of overhead and administrative costs as separate from, or less worthy of funding than, program costs.
As public health guidelines loosen and we ease out of an “emergency” state, our sector is seeing less relief funding being made available. At the same time, the needs of our communities have stayed the same, if not increased. The pandemic impacts people’s health and economic security over the long-term, and its negative impacts will be disproportionately difficult for already underserved communities to mitigate.
Instead of designating funds solely for nonprofit programs that address these issues and more, it is time to rethink the overhead myth altogether. We agree with Curtis Klotz, who wrote in Nonprofit Quarterly that “Strategic financial functions, good governance, and the development of key funding partnerships are vital to strong organizations.” To this, we add equitable salaries with clear professional development and promotion pathways, as well as holistic support that views nonprofit staff as people — because ultimately, programming does not happen without the people who work to implement them.
“The “nonprofit starvation cycle” caused by unrealistic donor expectations of grantees’ administrative and operating costs has been a known problem in the grantmaking world for years,” John Summers and Rodney Christopher recently wrote in PEAK Grantmaking. Analyzing data from nearly 150,000 nonprofits nationwide, they found that “smaller organizations tend to have higher indirect cost rates than larger organizations” because “indirect” functions like accounting and human resource administration “benefit from economies of scale.” Project-based funding that doesn’t cover these costs actually disproportionately burden small organizations and, consequently, nonprofits led by people of color, which often have smaller budgets than white-led organizations.
One immediate way donors and funders can support nonprofit staff and leaders is to ensure their financial contributions are unrestricted, so that nonprofit leaders can decide where best to use that money, be it to hire more staff, pay for interns, upgrade the organization’s technology, or more.
3. Commit to recurring giving.
A report published by the National Council of Nonprofits in December 2021 revealed that 42% of nonprofits had 20% or more of their positions open. A separate survey by the Advisory Board for the Arts showed that more than one-third of respondents were taking three-to-six months to fill jobs. These two results reflect the hiring concerns we have heard from small nonprofit leaders in our own network.
While there are myriad current and systemic challenges that have created such an acute workforce shortage in the nonprofit sector — including inflation and increased volumes of work — one of the biggest reasons is that nonprofits are unable to offer competitive compensation compared to their for-profit and government counterparts. 79% of nonprofits surveyed by the National Council of Nonprofits last fall reported that salary competition impacted their ability to hire, and this can be particularly true for small nonprofits with small budgets and teams. Yet, as the report stated, “While job vacancies in the government and business sectors may cause disappointment and lost profits, the lack of adequate nonprofit staffing means delayed or complete loss of needed services.”
One strong way to help ensure nonprofits can increase salaries for their staff is to fund them on a recurring basis. When donors and funders commit to monthly or multi-year giving, not only do they pledge to continually support an organization, but they also acknowledge that it is through sustaining the organization in the long-term that they can help it create the greatest impact. Being able to make projections for their budgets beyond the year allows nonprofit leaders to develop better plans with less uncertainty, which helps to cultivate a work environment where nonprofit staff feel they can grow with the organization.