The voices of Urban Institute's researchers and staff
November 10, 2016

Why good nonprofit jobs matter

November 9, 2016

In pursuit of a better return for their investment, philanthropic and government actors have been moving toward performance-based funding, budgeting, and policymaking to solve some of our nation’s most intractable social problems. At the same time, the work of human services is increasingly outsourced to nonprofits with missions that align with funders’ goals.

In recent years, pilots of tiered evidence have rolled out across federal agencies, pay for success initiatives have proliferated, and Congress formed an Evidence-Based Policymaking Commission, all with an eye to building an evidence base for social programs and implementing programs that work.

Most of the conversation around performance-based policymaking centers on the efficacy of a particular program model: what is the intervention, how much do people receive, for how long, to achieve what result, at what cost?

These are valid considerations, but there’s an elephant in the room: the people we’re depending on to implement these sophisticated program models often aren’t positioned for success.

Studies show that many human services nonprofits have great difficulty paying competitively, reining in overtime hours, providing adequate resources to support the work, and ensuring career ladders. These organizations often have high turnover rates and particular difficulty retaining the kind of entry- and mid-level staff who run our evidence-based programs.

In my own work evaluating social programs, I have frequently witnessed how this churn affects staff morale, derails planned program models, and exposes nonprofits to risk in an ever more competitive and evidence-based funding environment.

Ironically, most grant applications don’t even ask about retention of the staff who will actually do the work on the front lines. Organizational capacity is mostly judged by the qualifications and skill sets of nonprofit leadership and the track record of the development team.

Moreover, many funders of human services restrict dollars to cover overhead costs that nonprofits need to adequately support their workers and provide nonprofits little discretion over how they use programmatic funding. It’s a blind spot that—coupled with nonprofits’ increasing dependence on government grants and contracts—makes it difficult for nonprofits to address organizational challenges.

New Office of Management and Budget Uniform Guidelines affirm the right of recipients of federal dollars to negotiate indirect rates that cover their costs, but we’re still waiting for actors in philanthropy and state and local government to follow suit. Further, we need to change an underlying culture that sees money budgeted for nonprofit staff as a cost rather than an investment in better outcomes.

In addition, nonprofits could benefit from pro bono or low-cost business consulting to support their efforts in developing and retaining their workforce. Many have relatively small human resources departments and may not have the capacity or expertise to think strategically about job descriptions, career ladders, compensation, benefits, training and mentoring, and succession planning. In tandem, some nonprofits could benefit from additional operational and organizational expertise to help them redesign work processes in ways that allow them to invest more in their people and improve overall performance.

If we want our social programs to achieve great results for people in need, government and philanthropy should empower nonprofits to invest in the people doing the work. Their success will be ours too. 

Photo by Agence Photographique BSIP/Getty Images

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