During my brief stint in philanthropy, I was stunned by the variation in the budgets I saw. Many organizations with missions tied to life-and-death issues paid less than a living wage, even before rates were adjusted for actual labor. I took it upon myself to tell agency heads I could not in good conscience support a budget that didn’t pay people appropriately, and I backed that up with funding recommendations to support those budgets.
In deciding which programs to fund, if I had taken their board-approved budgets as presented, I would reinforce an expectation that people working in the nonprofit sector deserve less. I would have co-signed the myth that work in the nonprofit sector feeds the soul, so it doesn’t have to feed or clothe or house the body.
I could not do that.
But the impact of a single program officer is limited. Without an equity agenda in the field and agreement within a local community, it isn’t possible to send a consistent message between boards and donors about the importance of valuing people’s labor. An equity agenda honors the humanity of all the people within a system and respects the expertise of people closest to the social problems being addressed. A key part of this agenda is fairness in pay.
It isn’t in the economic interest of the men making money and giving it away within the local economy to disrupt that economy by focusing on wage equity. This presents a substantial barrier but not an impassable one.
To Boards: Put living wages in your budget.
Nonprofit boards need to start approving budgets with living wages. They need to work with agency heads to determine how they can pursue their mission within the boundaries of their revenue sources. Boards must support agency heads in conversations with funders who ask them to do more with less. Boards must hold the line on doing less with less. It can be a painful choice not to provide critical services, but it must be made. And boards must send their agency heads forth to sell their mission, not their programs.
To Funders: Make missions, not programs, the priority.
When agencies present their budgets with living wages, funders need to determine if they are genuinely interested in supporting organizations’ missions and invest in those missions. Foundations and major donors need to focus on effects and outcomes, and stop focusing on individual programs. Programs can shift according to new knowledge, but the mission of an organization should remain steady.
To Funders: Engage communities with an equity agenda.
Benefactors and foundation boards and executives need to think about whether their missions are served by supporting low wages in the nonprofit sector and the local economy. In my examination of the relationship between foundation missions and the for-profit businesses of foundation benefactors, I have often found a mismatch. There will be no equity agenda in local philanthropy for as long as that mismatch remains.
To Everyone: Understand how money works in nonprofits.
In a city like Memphis, where wages are suppressed, and there is a lack of political will to increase tax revenues in a progressive way, there will also always be a high demand for nonprofit agencies to fill in these unnecessary gaps.
Nonprofits exist to provide a public service government doesn’t provide. Their revenues come primarily from philanthropy — charitable foundations and individual donors. In some instances, they provide services for government through municipal, county, state and federal grants and contracts.
Wages in Memphis’ nonprofit sector are determined by philanthropy and governing boards. Governing boards approve budgets and direct how organizational missions will be pursued, and philanthropy determines whether there will be resources to fund the budgets.
Agency heads — executive directors and presidents — are the go-betweens responsible for developing operational plans and budgets that meet the approval of their boards and sexy-enough ideas to appeal to the moods of charitable foundations and individual donors.
To know whom to hold accountable for wages, it is necessary to understand how the business model works. Nonprofits are businesses. They are driven by mission instead of profit, but the basics are the same. Revenues need to meet or exceed expenses, or the business runs a deficit and may eventually fail.
The most critical difference is revenues. For-profit businesses make money by selling a product or service people need or want. If their products don’t sell, the businesses fail.
The level of government investment in a community sets the level of demand for services. Low investment in social services, low regulation of wages and labor laws, low commitment to the public good creates a high demand for nonprofit agencies to fill the gaps.
Our generosity is powered by our lack of equity.
While serving as program officer, it often occurred to me we would need far less philanthropy in Memphis if we had higher wages. When I hear about how generous we are as a city, I don’t receive it with any degree of pride. The need for generosity is created by our lack of attention to our shared humanity and desire to live with dignity.
I would rather a city with little generosity to speak of in exchange for a city where everyone’s needs are met. Pursuing a vision of that city would be a revolution in local philanthropy with implications across all sectors.
Adriane Johnson-Williams, Ph.D., served as a program officer at the Pyramid Peak Foundation and currently works at LeMoyne-Owen College as special assistant for strategy and planning.
This story is brought to you by MLK50: Justice Through Journalism, a nonprofit reporting project on economic justice in Memphis. Support independent journalism by making a tax-deductible donation today. MLK50 is also supported by the Surdna Foundation and Community Change.