An interview with Vu Le of Nonprofit AF
The issue of employee pay in the nonprofit world has been been written about in Forbes, The Atlantic, The New York Times, and other top level media outlets. It's no surprise that the topic is on so many radar screens. With roughly 10% of U.S. workers employed in the nonprofit sector, their compensation affects not only that industry and the important work it does, but the wider economy. Low pay depresses the life prospects of nonprofit workers, nonprofits short of cash pressure their staff to work unpaid hours, financial pressures make remaining in the sector impossible for some, and still more problems combine, all in a dizzying downward spiral.
At GrantStation we were reminded of just how difficult and important these issues are thanks to some strong reactions to our recent webinar, “Motivating Underpaid Staff.” The webinar dealt with inflexible budget constraints for nonprofit executive directors and managers, but there's another side to the story—that of underpaid and overworked staff performing crucial duties at the front ranks of nonprofits. These staffers are the most important resource at any nonprofit, so I decided to turn to someone who's been their advocate for many years.
Vu Le is a former director of the Seattle based social justice nonprofit RVC, but these days is better known as a nationally recognized nonprofit blogger, speaker, and thought leader. On his blog, Nonprofit AF, he often discusses nonprofit salaries and related matters, always informatively, often irreverently. He's also one of the world's foremost advocates of unicorns. He was kind enough to take time out of his packed schedule to discuss some of these issues with us, and offer some of his considerable insight. We chatted via email.
Sid: Over the course of your career, and online with your blog NonprofitAF, you've become a respected voice within the nonprofit world. A GrantStation webinar, and some reactions to it, got us thinking about facilitating a wider conversation about nonprofit employees, how they're underpaid, and how to approach increasing their salaries. What are some of your general thoughts around the issue?
Vu: This is an important conversation we should be having. Nonprofit workers are often underpaid and overworked, especially people of color, women, and disabled people. Everyone is getting fed up with doing more with less, with putting up with the status quo and learning to adapt to an inequitable system. It's time for the system to change.
Sid: How have you dealt with salary situations as a nonprofit executive? I assume there have been times you've been unable to pay your staff what they deserved and what you wanted. What did you take away from those episodes?
Vu: Yes, many times. I know how challenging and stressful and guilt-inducing it is to not be able to pay your team fairly. Several times cashflow was so bad, I had no idea if I could pay staff on time. I learned a few critical lessons, namely that I was a part of the problem. I thought I was doing the org a favor by taking a salary way below market rate. What that did, though, was depressed everyone's wages. I also could have been more transparent with funders about the challenges we were having, and been bolder in advocating for more funding. We all need to be more courageous in telling funders we need them to give more money so we can pay staff fairly, provide benefits, retirement, professional development, sabbaticals, paid family leave, etc.
Sid: I recently read a description that went: “The passion for social change can become a weapon against the people who want that change.” Do nonprofit workers who are underpaid tend to think they're being taken advantage of precisely because of their desire to do meaningful work?
Vu: We are definitely seeing more workers moving away from this martyrdom mindset that if you work in nonprofit, you are going to be underpaid. Unfortunately, a lot of donors and funders are still stuck there, still expecting that nonprofit professionals will accept being underpaid because it's our passion to help people. It's frustrating to recognize that you're being taken advantage of, but the people with the resources to change things are still mired in archaic philosophies and because they hold so much power, it's challenging to get them to budge.
Sid: A friend of mine once worked at an education company that brought in a new manager who was told to sweat the assets—i.e. pressure the teachers for more work. Turning to this as a money saving strategy is common in every industry. But is it more acute in the nonprofit sector?
Vu: Yes, because of a combination of multiple factors. Society's complete ignorance about how nonprofits are run, for one thing, which leads to underinvestment in stuff they consider wasteful, such as staff salaries. Meanwhile, funders continue to release only 5% of their assets each year—3.5% in Canada—and have a suspicion-based funding allocation model, which means nonprofits rarely have sufficient funding to do their work the way they want to do it. But societal needs continue to increase, and we care about people, so even if there were no external pressure, we would still try our best to respond. Add in the scarcity mindset and the martyrdom complex, and we have a field ripe for "asset sweating."
Sid: Low pay contributes to turnover, then nonprofits lose ground level experience and institutional knowledge and have to constantly scramble to make up for what they lose. Is it a case of a step forward to save salary, but two steps back in lost effectiveness?
Vu: It's a pervasive problem. I've seen it happen with colleagues, and also with me personally. One colleague, a woman of color, was underpaid, so she asked for a reasonable increase. The org said she was amazing but they couldn't afford the raise. She left the organization, and they scrambled to fill her position. No one would work for the salary they had been paying. They had to increase it significantly, and they lost several months hiring someone, and then another year for that person to get their bearings. This happens so often. We need to understand that failing to invest in our people often costs us more in the long run, in terms of both time and money.
Sid: Part of the salary gap, as you mentioned, is that workers in the nonprofit realm who are ethnic minorities—and women particularly—are often underpaid compared to their white male peers. What sort of approach do you think should be taken toward thorny problems like that?
Vu: Every organization needs to do an analysis of what the gaps are and be honest. It is often painful, so we don't do it. We need to do the analysis, then make plans to address it in a time-bound manner. And honestly, people who have privilege, especially white men but men in general, need to start being OK with giving up stuff. Those who are overpaid need to consider accepting having their salaries lowered so that people who are underpaid can be paid more. We often only talk about raising salaries for the underpaid; it has been blasphemy to suggest that senior leadership and other privileged people need to be OK getting a pay cut if they're serious about equity.
Sid: There are papers and articles all over the map on the subject of pay. Nonprofit workers are generally understood to be underpaid, but some sources say that isn't true. For example, Sophie Turner of the John Glenn College of Public Affairs at Ohio State University, published a paper that opens: “Despite public opinion, the nonprofit sector pays sufficient salaries on par with the private sector.” Why the divergence of opinion?
Vu: Often we don't disaggregate data. When we do, it often reveals clearer pictures. The biggest nonprofits in our sector are universities and hospitals. Lumping them in with everyone else skews things. For instance, according to this article by the National Center for Charitable Statistics, "66.6 percent [of nonprofits] had less than $500,000 in expenses (211,782 organizations); they composed less than 2 percent of total public charity expenditures ($32.8 billion). Though organizations with $10 million or more included just 5.4 percent of total public charities (17,063 organizations), they accounted for 88.1 percent of public charity expenditures ($1.7 trillion)." Large nonprofits tend to dominate these statistics. But again, two-thirds of nonprofits have budgets under half a million, and it's unlikely their salaries are on par with for-profits.
Sid: You anticipated my next question, which was going to be about the inclusion of all types of nonprofits in salary statistics. For instance, there are nonprofits that feed the hungry or work toward increasing women's rights, and there are nonprofits that advocate for lower taxes on corporations or more restrictive access to the voting booth. The latter tend to be well funded. That muddies the water a bit.
Vu: Yes, absolutely. There has been tons of research that shows that conservative organizations and movements are better supported by conservative funders. This is why they've been so effective over the past several decades. Progressive funders need to learn from conservative funders, as I wrote here. One of those lessons is that we need to invest more in our people, organizations, and movements.
Sid: What do you think about the nonprofit unionization push? It's been incredibly interesting because it's caused some otherwise progressive nonprofits to react repressively. How do you see that movement playing out? Do you see a positive conclusion in unionization for nonprofit workers and the people they help?
Vu: I do not have enough information at this point to really comment on this, except to say that I support unions, and I find it ironic that many nonprofits claim to be aligned with equity and yet are allergic to unions. I know it is more complicated than that, but our sector is heading this way, with more unions forming, so all of us need to start learning and engaging in this conversation.
Sid: As I said earlier, this is the beginning of a larger discussion at GrantStation about this pay issue. We've been in this field for a long time trying to help nonprofits find funding. This last week we were reminded that we should also look at helping nonprofit workers with funding for their lives, so your time and thoughts are appreciated.
Vu: I would encourage GrantStation and other entities with resources and connections to help push for change, not just help nonprofits navigate a crappy system. We need to collectively push foundations to significantly increase their payouts, not just help nonprofits fight in the hunger games for crumbs. This sort of "there's only so much money to go around" mindset should be seen for the bullshit that it is, when trillions of dollars are sitting in endowments. We've tried asking nicely. It may be time for bolder actions, including legislation such as the ACE Act that will prevent foundations from counting money they transfer to Donor Advised Funds or money they pay family members as part of the pathetic 5% payout rate. The world is burning; foundations need to stop hoarding money and underpaying the people trying to put out the fires.
ABOUT VU LE
Vu Le is a writer, speaker, vegan, Pisces, and the former Executive Director of RVC, a nonprofit in Seattle that promotes social justice by developing leaders of color, strengthening organizations led by communities of color, and fostering collaboration between diverse communities.