Research Finds 22% of Nonprofit Workers Experience Financial Hardship

Independent Sector and United For ALICE released their first-ever ALICE in the Nonprofit Workforce: A Study of Financial Hardship report, which finds that more than one in five nonprofit employees in the United States struggle financially.

This study is the first of its kind to examine financial insecurity among nonprofit workers, who play critical roles in health care, education, social services, advocacy, religious institutions, and other areas of civil society. It rigorously analyzes publicly available data to understand the financial status of the country’s 13.9 million nonprofit employees in greater detail than ever before.

Of all nonprofit workers in 2022, 5% were below the official U.S. poverty level, and another 17% — more than three times as many — were ALICE, or Asset Limited, Income Constrained, Employed. ALICE nonprofit employees live in households that earn more than the Federal Poverty Level, but less than what it costs to survive in the counties where they live. They can’t afford the basics: housing, child care, food, transportation, health care, technology, and taxes.

The ALICE in the Nonprofit Workforce report showed that in 2022:

• More than one in five nonprofit workers lived paycheck to paycheck: 22% of nonprofit employees fell below the ALICE Threshold, which includes ALICE households and households in poverty combined.
• Nearly one-third of workers at social assistance and at arts, entertainment, and recreation nonprofits faced financial hardship: The nonprofits with the highest rates of financial hardship included social assistance (32%); arts, entertainment, and recreation (32%); and religious organizations (29%). Those with the lowest rates included health care (16%) and educational services (18%).
• Systemic inequalities continued to impact financial stability: Black and Hispanic nonprofit workers were twice as likely as White workers to experience financial hardship, and one-third of nonprofit workers with disabilities struggled financially.
• Nonprofit workers with children were at higher risk: 30% of nonprofit workers with children, and 53% of single parents working at nonprofits, experienced financial hardship.
• Wages lagged behind inflation for many nonprofit workers: For example, rehabilitation counselors working at nonprofits saw a 24% median wage increase from 2010 to 2022, while the median cost of household necessities rose by 46%.

The report’s findings highlight the urgent need for action to support the nonprofit workforce.

“The nonprofit sector is fundamental to American society, delivering vital services and resources to those who need them most. Yet, it is deeply troubling that so many of our own nonprofit workers — those who dedicate their lives to supporting others — are themselves facing financial hardship,” said Akilah Watkins, Ph.D., Independent Sector President and CEO. “This groundbreaking study gives us both a starting point and a call to action. We must find data-informed solutions, whether through policy or practice, to meet the needs of nonprofit workers who are struggling financially. Investing in the health of our workforce is essential, because it takes a thriving and well-equipped workforce to drive meaningful and sustained change in our communities and our nation.”

“While the data reveals hardship among nonprofit employees, it also offers some bright spots that can lead the way for broader change,” said Stephanie Hoopes, Ph.D., United For ALICE National Director. “For instance, women are earning more in nonprofit than for-profit organizations, and sectors like health care are showing that nonprofits can achieve their mission while providing greater financial stability for their workers.”

As a companion to this study, Independent Sector and United For ALICE will next publish a fact sheet on the economic benefits of achieving financial security for the nonprofit workforce, as well as a national- and state-level data dashboard.

Read the "ALICE in the Nonprofit Workforce: A Study of Financial Hardship" report here.

Source: Independent Sector

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