The Ugly, the Good and More Ugly

Posted by Laura Otten, Ph.D., Director on April 17th, 2014 in Thoughts & Commentary

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I have to start with the ugly, as it appalls me that here we are in 2014 and white supremacists still use their ignorance to wreak havoc and presidents still need to push equal pay legislation, while some members of Congress mumble about finally passing the ERA.

And although it also continues to baffle me how people can ignore hard data, here are the facts about pay inequality in the nonprofit sector.  It is a sad, yet common pattern that the larger the organization, regardless of whether it is a for-profit or nonprofit, the more likely there will be a male at the top tier of the paid organizational chart.  Call it the pink-collar effect or whatever you want, it is simply scandalous that it continues today and in the nonprofit sector.

Data points vary a bit, but remain fairly constant over the years:  women make up anywhere from 75% to 90% of the nonprofit workforce.  Yes, there is a 15% spread there, but the point is clear, regardless of whether you take the low or high end:  women dominate the nonprofit workforce.  Yet, they don’t dominate in the top position and they don’t dominate in pay.

The 2013 GuideStar Nonprofit Compensation Report shows that women make up only 16% of the CEOs of nonprofits with budgets over $50 million, and those 16% make, on average, 14% less than their male counterparts!   In fact, the differential between what male employees versus female employees in the nonprofit sector—in any position—ranges from 9% (at organizations with budgets under $250,000) to 21% (at organizations with budgets between $5-$10 million).  While wrong for any era, it is patently obscene that in 2014, in the sector that is supposed to be about improving the quality of life for all, has this degree of pay inequality.  And that women are leading any of these organizations with such pay disparities is the worst!

The good?  According to the Nonprofit Finance Fund’s2014 State of the Nonprofit Sector” some things are looking very good.

  • Financially, things are definitely on the uptick.
    • only 28%  nonprofits (of almost 4500, representing all 50 states, Puerto Rico and the District of Columbia) ended fiscal year 2013 with a deficit, while 40% ended with a surplus;
    • 71% predicted that they will end FY14 breaking even,  or with a surplus (27%); and
    • 65% have at least three months of cash reserves, including 21% that have more than six months of reserves.
    • Programmatically, things also seem promising for responding to growing need.
      • 53% added or expanded at least one program in the past 12 months and 54% will add or expand at least one program in the next 12 (compared to only 17% and 11%, respectively, that eliminated or reduced programs).
      • And if you’ve been wondering when, if ever again, it would be a good time to look for a job in the nonprofit sector and be an employee of a nonprofit, the time is still now.
        • 50% of respondents hired a new position and 46% hired a replacement position in the past 12 months;  37% and 32%, respectively, will do the same in the next 12 months;
        • 38% will give raises (as opposed to 7% that will freeze or reduce salaries; and
        • professional development is hot once again:  51% will invest in staff development, 32% will invest in executive leadership development and 11% (okay; not so great!) will improve benefits.
        • Interesting, and I do put this in the good column, is that just over 1/3 say they will engage more with the board by providing more reports (no more deadly reports, please; instead, streamline the reports currently provided and be sure that they convey the truly pertinent information boards need) and having more meetings (where reports should not be read, but the strategic questions raised by the data in those reports discussed).

Returning to the ugly just affirms what those in the trenches already know.

  • 80% of respondents say that demand for their services significantly or very significantly increased in 2013, and 86%  say this trend will continue in 2014;
  • yet despite the progress made with staffing additions and replacement hires, 56% were unable to meet demand in 2013 and 58% say they will be unable to meet demand in 2014; and
  • here is the rub:  most funding  sources—individuals, foundations, corporations and government (federal, state and local)—don’t cover the full cost of the programs/services they fund; in fact, respondents said covering the full cost of what they fund happens only between 5% and 12% of the time.

Despite the struggles still to get funders to cover the true costs of the programs they so want to fund, only 27% plan to collaborate this year to reduce administrative costs and only 4% say they will merge.



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