Nonprofit Workforce Shortages: A Crisis That Affects Everyone

Charitable nonprofits around the country are reporting significant difficulties retaining staff and filling vacancies. What was initially considered a challenge has now become a workforce crisis in need of immediate remedy and commitment to overcome longstanding problems exacerbated by the COVID-19 pandemic. While job vacancies in the government and business sectors may cause disappointment and lost profits, the lack of adequate nonprofit staffing?means the public suffers delayed or complete loss of needed services.

Why It Matters

When organizations dedicated to serving the public good can’t secure the workforce to provide vital services, their communities suffer. While staffing shortages in delivery services result in longer times to receive a package, staffing shortages in direct-care services mean that families and individuals cannot access life-saving support. When a nonprofit closes, the ripple effects cannot be ignored: communities lose access to food, shelter, mental health care, and other vital services. Nonprofits are doing their part to raise?awareness?of the challenge to whole communities, to collect and?analyze?data to identify the problem and solutions, and take?action?to protect our communities.

The Scope and Impact of Nonprofit Workforce Shortages

In the fall of 2021, the networks of the National Council of Nonprofits posted an?online survey?to gauge the scope of the workforce shortage problems for charitable organizations and determine the impact on their abilities to advance their missions. The analysis, benefitting from responses from more than 1,000 nonprofits from all 50 states, presents the most up-to-date picture of the adverse consequences of workforce shortages. The analysis utilizes responses and comments from nonprofits nationwide to explain the causes and impacts of the nonprofit workforce shortage and propose solutions to pursue in upcoming legislative sessions.

Report Highlights

Job Vacancy Rate

• A troubling 26.2% responded that they had job openings for 20 percent?to 29 percent?of their positions.
• Another 16.1% percent reported vacancies greater than 30 percent.?

Waiting List and Reduction in Services

• 26% of responding organizations reported having a waiting list that is more than a month long.
• 21% of respondents acknowledged that they do not have a waiting list, but they clarified that it is because they are unable to accept new clients or referrals.

Factors Affecting a Nonprofit's Ability to Recruit and Retain Staff

• An estimated eight out of ten (79%) nonprofits identified?salary competition?as a factor preventing them from filling job openings.
• Nearly a quarter (23%) of respondents stated that the?inability to find child care?affected recruitment and retention.
• Vaccination policies?affect nearly one in five (19.2%) nonprofits.
• Comments from respondents identified?additional causes including stress and burnout.

Read the full updated report.

The Challenges Continue

Organizations without adequate levels of personnel cannot deliver the same volume of services, much less respond to growing demands. The labor market is active: more than 11 million jobs were posted in May 2020 and roughly 4.3 million workers quit or changed jobs that month, according to the Bureau of Labor Statistics. That agency does not specify nonprofit jobs, so nonprofits are forced to rely on anecdotal evidence to determine whether job applicants are taking work in the for-profit or governmental sectors, and which subsectors, if any, are close to their pre-pandemic employment levels.

Solutions Identified by Frontline Nonprofits

So far in 2022, nonprofits are seeing some progress in the exploration of policy solutions, but additional policy changes and wider adoption of proven approaches need to be implemented as quickly as possible to protect the public.

All Governments

• Prioritize Equity from the Outset: Intentionally seek out solutions identified by marginalized and under-resourced communities that would overcome barriers blocking access to services and support for providing services.

Congress

• Reinstate and Extend Expired Tax Provisions: The expiration of the?Employee Retention Tax Credit and the Universal Charitable Deduction deprive charitable nonprofits of the resources they need to overcome the workforce shortages adversely affecting the public. Attention must also be given to additional?disaster-relief giving incentives?that expired on December 31, 2021 - the provision permitting individuals who itemize to deduct charitable donations up to 100% of their adjusted gross income and the measure allowing corporations to deduct charitable donations up to 25% of taxable income.

States

• Promote Affordable Child Care: Another challenge to employee recruitment and retention is the inability of prospective and current employees to find affordable child care.?
• Provide Student Debt Relief: Frontline nonprofits called on policymakers and funders to do more the relieve nonprofit employees from crippling burdens of student loan debt so they can remain in the sector promoting public good in their communities.

State & Local Governments

• Cost of Living Adjustments (COLAs): Just as governments increase their own spending to reflect costs of providing services,?they must also annually adjust their grants and contracts with nonprofit service providers to cover rising costs of living and actual costs that the nonprofits incur doing work for those governments.
• Payment of Indirect Costs:?Reimburse charitable nonprofits their actual indirect cost rates, as required under federal regulations, which state and local governments should adopt when using their own funds to provide efficiencies and consistency across governmental agencies.

Webinars

• Virtual Press Conference: Workforce Crisis Puts Vulnerable Kentuckians at Risk, Kentucky Nonprofit Network, Jan. 5, 2022.
• Regional Forum on Nonprofit Workforce Crisis, hosted by the CT Community Nonprofit Alliance, Providers’ Council (MA), and the Rhode Island Community Provider Network, Dec. 6, 2021.

News Reports

• A food pantry's closure means more than lost meals for hundreds of families, Kyle Swenson,?Washington Post, Apr. 18, 2022.
• Impact of COVID-19 and current restrictions on Ontario's nonprofit sector, Ontario Nonprofit Network, Jan. 5, 2022.
• Nonprofits struggle in the face of COVID-19, Nishesh Chalise, Federal Reserve Bank of St. Louis, Dec. 27, 2021.
• As workers gain pay leverage, nonprofits can’t keep up, Ben Casselman,?New York Times,?Dec. 23, 2021.
• Nonprofits struggling to hire staff amid labor shortage, Maya Rodriquez, Scripps TV, Nov. 10-11, 2021. (The story has been aired in?Baltimore,?Billings,?Denver,?Detroit,?Kansas City,?Lexington,?Omaha,?Phoenix,?Salt Lake City,?San Diego,?Tampa, and?Tulsa.)