I couldn’t sleep last night. Which feels pretty normal right now for, well… the entire world. In the midst of COVID-19, we’re witnessing a pivotal moment in history. Markets are spiraling down, governments are failing us, and people are dying. This is serious.
I keep asking myself: A year from now, what will nonprofits wish we would have done right now? What mistakes do we need to avoid? What difficult decisions should we make? What opportunities could come from this?
I feel confident in one thing: at this crucial moment in time, it’s the responsibility of everyone with the privilege of organizational leadership to keep our staff on payroll as long as possible. Not cut hours or pay. Not fire them. But instead, to the extent possible, to keep paying our staff just as before, and if possible – give them raises.
Research vs. Popular Opinion
Despite popular opinion that organizations should lay off staff quickly in response to a potential recession, doing the opposite is backed up by vast research showing that organizations which keep their staff on payroll:
- experience significant increases in workplace productivity and morale
- retain their best staff through turbulent times
- are able to recover from the recession more quickly and effectively
This sounds far better than what will otherwise occur: “After a layoff, survivors experienced a 41% decline in job satisfaction, a 36% decline in organizational commitment, and a 20% decline in job performance.” It’s clear that layoffs decrease an organization’s capacity and also reduces the effectiveness of the staff that remain. During such a critical time, nonprofits need to hold on to staff, and invest in them so they can provide high-quality services that are needed now more than ever in our communities.
This approach won’t always work, as there are ways in which the sector may be changing permanently, and some nonprofits may not be the right fit for that new normal. “But the majority of the layoffs that have taken place during this recession […] aren’t the result of a broken business model.[…] They’re cutting jobs to minimize hits to profits, not to ensure their survival.”
What We’re Learning
Before COVID-19 came onto the scene, RVC had been in the middle of an intensive process of raising our wages to market rates, ensuring that no staff were paid under $45,000 per year, the living wage in Seattle. We had just finished that plan when everything turned sideways. Suddenly, it seemed far riskier to add $200,000 in fixed expenses to our annual budget.
We weighed the risks carefully, and came to an unlikely conclusion for an impending recession: we chose instead to invest in our staff and increase staff salaries. We know this decision came from a place of privilege; because we receive generous multi-year unrestricted foundation funding, we have the flexibility to respond from a place of strength. We need this response to be the norm, not the exception, which requires the philanthropic sector to radically change how it operates.
RVC is already benefiting from this decision: our staff are able to provide much-needed income to family members losing their jobs, and are able to donate more to the many nonprofits, artists, and undocumented community members who are in pain right now.
By investing in our staff, we’re sending a clear message that they matter, and that we are committed to doing our part to ensure that they weather the coming recession.
Powerful Voices, one of our partner organizations, also increased their staff members’ wages, ensuring that all staff are now paid a living wage and have salaries comparable to similar organizations in the field. They’ve witnessed the same big increase in morale that we’ve experienced, and they are helping send a message to the sector that we need to do right by our people.
What Will You Do?
Those of us with the power to make these decisions about others’ livelihoods have a choice right now:
Do we react protectively, cutting down our fixed expenses as quickly as possible?
Do we keep on spending the money that we have on our most valuable asset: our staff?
Individually, it seems logical to cut your budget wherever possible when we look at the state of the economy. But when we do that collectively, people lose their livelihoods, creating an even larger economic avalanche. Messy efforts to incentivize keeping staff on payroll were made by Congress, but those efforts are nowhere near enough to stave off the coming recession.
Nonprofits constitute 10% of the U.S. workforce – imagine what a difference it would make if we could ensure that the millions of people with nonprofit jobs could know that their jobs are secure in this uncertain time. Imagine what this could mean for ensuring a continuity of services for those who rely on nonprofits during COVID-19: from food banks to domestic violence centers to community based organizations that translate public health updates.
As a country, the United States has steadily shredded apart its social safety net, with government funding providing nowhere near enough money to address the deep systemic injustices we face. Nonprofits are on the front line of the present COVID-19 disaster, just like they’ve been on the front line of the constant yet more invisible disasters inherent in a country where the gap between the rich and the poor continues to widen.
We have a huge array of racial, social, economic, and environmental justice issues that desperately need our attention, and yet nonprofits continue to struggle. That has to change. And it starts with each of us individually taking a deep breath and risking it: doing the individually scary work of deciding to continue investing in our staff even as our funding prospects seem increasingly unreliable.
And it takes us changing the sector. Nonprofits wouldn’t be freaking out if they were not reliant upon a mutant patchwork of funding sources that rarely stretch beyond a year. In this disastrous time, we need nonprofits now more than ever. As a capacity-builder, RVC has a unique vantage point to bear witness to the challenges facing an array of community-based nonprofits led by and serving people of color. We see nonprofits working harder than ever, starting new programs and services out of nowhere to respond to COVID-19. In particular, community-based nonprofits are often the first responders, since they quickly understand their communities’ evolving needs and are designed to respond to them. At this moment, not only do nonprofits need to avoid firing staff, but we actually need to hire more staff to work towards reversing the terrifying direction we are moving in. We need bigger long-term funding. And we need it now.
A Call to Action
Let’s commit to keeping our staff paid as long as we can, and let’s commit to changing this screwed up system. We need to survive what is to come, yes- but we also need to continue building the world we want, even in the midst of a pandemic. This crisis is showing us that the world can be organized in a completely different way than we have known. This time of disaster capitalism could cement in the growing inequality in our country. Or this moment could turn the tide. What should we build and do differently to usher in the just and equitable society we are yearning for?
If you’re a funder, take this a step further. We need you to give more right now, not less. You can even take out loans in order to continue giving at the same level without having to pull money out of stock investments. It’s time to double that payout from 5% to 10%, or plan on spending down that endowment instead of lasting forever. If this wasn’t the rainy day you were saving up for, what will be?
The time is now. Join us in committing to continuing to keep your staff employed, and in committing to getting nonprofits the funding they need to thrive, not just survive.