CalNonprofits Articles

A survey of nonprofits conducted last month by the California Association of Nonprofits showed that 77% of those with an opinion support increases in the minimum wage.

The CalNonprofits study obtained responses from 329 nonprofits with a total of 11,600 employees. Of these, 83 reported having one or more employees paid at minimum wage, with these indicating they have an average of 11% of staff at that level. The study uncovered three additional key findings:

• Nonprofits need a phase-in period to allow for funding in government contracts to reflect the increased costs of government-paid positions.

• Many nonprofits have unique positions such as subsidized job training programs.

• Nonprofits are concerned about low-income clients losing needed benefits without appropriate planning: 36% reported concern over clients losing Medi-Cal and 29% over losing SSI.

Mixed feelings

For many nonprofits, an increase in minimum wage is met with mixed -- even agonized -- feelings. On one hand, many nonprofits agree with one respondent who stated, "Increasing the minimum wage can reduce the poverty rate and help poor people do better for themselves."

At the same time, they struggle with increasing costs while funding is frozen:  " We would love to pay our direct care staff more but our [reimbursement] rates (for Adult Residential Facilities for the Developmentally Disabled) from the State haven't changed in decades."

And another voice: "Most community based nonprofits that have federal or state funds for job training programs are not receiving any additional funding to mitigate the increases- as such we are forced to either lay off workers or severely cut back hours."

Nonprofits without government funding also expressed concerns about services: "As a provider of care for children after school, we do not have a 'product' that we can increase prices for as our services are at no cost. So we have to decrease services, lay off workers and work harder to raise more funds. We are the only service provider of our kind in our small town, as well as one of the largest employers."

Unique nonprofit jobs

For many nonprofits, what's at stake differs from the concerns of the business owner who simply doesn't want to increase costs. Many nonprofits have below-minimum-wage jobs that are in summer youth employment, subsidized job training positions, jobs that include support services, and other uniquely nonprofit positions. As one nonprofit with 100 permanent staff and 400 youth training jobs commented, "An increase in minimum wages will increase the cost of providing transitional jobs to youth and interfere with [our] goal of increasing these young people's educational and skills  -- who are currently unemployable."

Concern for inadvertent harm to clients

One nonprofit leader commented, "There is a no-man's-land between qualifying for income assistance and income security/independence that we need to be mindful of. If the minimum wage increases, it may be necessary to also increase the levels at which people no longer qualify for certain types of assistance."

Echoing this respondent, there are currents of concern among nonprofits for their clients and constituents with low incomes.

As another respondent stated, "Be sure to look at the whole system to make sure no one is actually hurt by an increase. Higher limits for SSI, Medicare, and other benefits should be in the same bill as higher minimum wage."

This survey will help inform a statement to be issued in January 2015 by the CalNonprofits Board and staff outlining our position and recommendations on minimum wage increases, phase-in periods for nonprofits and other concerns.


-1 # Patricia Sinay 2014-12-09 07:59
Thank you for conducting this important survey. The community looks forward to your position and recommendations . As we think through this challenge, it would be great to create tools to help consultants, board members, and executives have these important conversations/d iscussions with Boards, funders, and government contractors. Having done so with several clients, I have learned that many are not ready to have the conversation and brush it off as being "political." I have a hard time reconciling how a nonprofit can be mission driven and not pay a living wage or support raising the minimum wage. As a sector we need to be part of the solution and not contribute to the problem by paying working poor wages. Funders, government contractors, and donors all need to invest in organizations so they can achieve their missions within their organizations and in our communities. The responses above remind us why nonprofits can't be run like a private business. Thank you
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