Myths about Nonprofit Employment: Why We Should Stop Spreading Them


By Ruth McCambridge

An article posted on Forbes’s site sounds the alarm about nonprofit turnover with a headline that blasts, “45% of Nonprofit Employees to Seek New Jobs by 2025”! Thus starts a relatively vacuous, decontextualized article from which you might deduce that the nonprofit sector is falling behind other sectors in attracting and retaining staff.

Of course, if you were to contrast this alarming figure with more general surveys like those referenced in a recent Small Business Trends article, you would find that a full 75 percent of employees in the US do not plan to stay at their jobs for more than five years. In fact, the Bureau of Labor Statistics has found that less than a quarter of those surveyed say they plan to remain at their current place of employment for six or more years.

The Forbes article references a survey done by Nonprofit HR, a firm which-you guessed it-does work for hire in this area. Also cited in the article is ExactHire.com, which claims the voluntary turnover rate for nonprofits is “19 percent-far outpacing the all industry average of 12 percent.” But when we looked for pan-sector averages, we found the figure cited by the Work Institute to be more like 27 percent. The percentage is on the increase, the authors say, and if the trend continues, that voluntary turnover rate could hit 35 percent by 2023.

A dire picture indeed, but on the whole nonprofits actually seem to be holding their own in retention. This doesn’t mean they should not try harder to create desirable workplaces; aside from the moral imperative to do so, competition for workers continues to rise. But it does mean the implication that nonprofits are somehow less desirable places to work would appear counterproductive, not to mention inaccurate.

Going back to the original Nonprofit HR survey cited in the Forbes article, we find this summary on its website:

Almost half of the respondents for a recent Nonprofit HR pulse survey said they will seek new or different employment in the next five years, and of this group 23 percent said that nonprofits would not be among the types of organizations they intend to pursue.

Translation: approximately 11.5 percent of those surveyed said they would seek a job outside of a nonprofit. This means 88.5 percent would seek work in another nonprofit. The summary goes on:

Of those who indicated they would not work for a nonprofit, the top reason (49 percent) cited is that organizations do not pay enough. Another 19 percent indicated that nonprofits do not offer good long-term career opportunities and a final 12 percent said nonprofits are not well-run businesses.

Translation: of those 11.5 percent who would not seek another nonprofit job, half would not choose to go nonprofit because of pay. That’s less than six percent of all those surveyed as compared to the more general finding by Work Institute of nine percent. Around two percent would not choose to go nonprofit because of a lack of career opportunities, as compared to the 22 percent cited across all employment categories by the Work Institute. Somewhere closer to one percent of those surveyed said they would not seek another job in a nonprofit because they are not “well run.” Not exactly appalling.

You get the picture. Perhaps if our sector’s self-esteem were higher, and if we had confidence the survey was well done, we would be heralding instead of expressing alarm at these results. But we at NPQ do not have confidence in a survey of 1,000 employees as contrasted to the Work Institute’s 250,000, and the findings are tainted in the way they are presented and by the fact that the issuing group is unwilling to share details of the larger survey from which the answers to these questions were drawn.

Over the last year, in fact, NPQ has covered much research that indicates the nonprofit sector compares very favorably to the for-profit sector in terms of pay and growth. NPQ’s Steve Dubb covered the 2019 Nonprofit Employment Report produced by Lester Salamon and Chelsea Newhouse at Johns Hopkins University. In it, they provide a far more positive view of the state of nonprofit employment, as Dubb summarized here, commenting that our wages were almost universally higher across various fields…

For instance, an average nonprofit worker in ambulatory health earns $1,364 a week versus $1,101 for a person employed in the same industry by a for-profit firm. That is a 24 percent nonprofit wage advantage. In the social assistance sector, the nonprofit wage advantage is a stunning 55 percent ($552 a week for nonprofit wages versus $356 a week for a person employed by a for-profit firm). In other sectors, the nonprofit wage advantage is less-in hospitals, it is 14 percent; in nursing homes, four percent. But nonprofit workers outpace for-profit employee compensation in every sector measured except arts and recreation.

…and that our employment growth has been more consistent.

Nonprofits have also outpaced for-profits in employment growth. From 2007 to 2016, the number of employees in nonprofit firms increased 16.7 percent, while employment in for-profit firms rose only 4.6 percent. A key difference is that nonprofits are less impacted by recessions than for-profit firms-that famed nonprofit resiliency rises again. Between 2007 and 2012, nonprofit employment rose 8.5 percent while it fell 4.1 percent for for-profits. From 2012 to 2016, for-profits grew faster than nonprofits (9.1 percent versus 7.6 percent for nonprofits), but this slight gain hardly made up for the loss of for-profit sector jobs during the Great Recession.

Another study, one in Minnesota, shows nonprofit wages in Minnesota now exceed those paid to workers’ counterparts in the public sector.

Nonprofits surely have improvements to make as employers. Today’s article on the wages of human services workers in Santa Cruz, California is a case in point. In particular, NPQ has written extensively about the persistence of wage ghettos in professions like home care and child care, about widespread and serious issues of equity and inclusion based on race, and about nonprofits who seek to oppose or evade fair labor and wage advances. In all of these realms, there’s urgent work to be done, collectively and as individual organizations. Additionally, we at NPQ feel that nonprofit workplaces, many of which are small and lack in-house upward mobility for all staff, should make every effort to support professional development. as is described here.

But the research cited above demonstrates that there are excellent reasons for a job candidate to seek out a position in this sector specifically. They constitute a significant hiring advantage in a very competitive market-that is, unless we continue to talk it away.