Toward Viability
From a ‘Toward Viability’ interviewee:
“The ability to work one job should not be a luxury.”
Why did CivicLex create this report?
The nonprofit sector is integral to a city’s civic life. Nonprofits offer an array of valuable services that fall outside of market desires and public necessities. In Lexington alone, nonprofit organizations serve the community by providing educational programming and exposure to the sciences and humanities, access to medical care and support, opportunities to interact with animals and the natural world, and enrichment through volunteer experiences and social events.
Along with their role as providers of essential community services, nonprofits also function as a significant economic sector in Lexington. They employ and support a substantial portion of Fayette County’s workforce. Through cultural effects, they promote tourism and make Lexington more hospitable to individuals and businesses looking to relocate.
Their services not only attract potential residents, but they also play a role in retaining Lexington’s talent and potential. We know the city is concerned about “brain drain”- the loss of university graduates and early to mid-career professionals to larger metropolitan communities that can offer more opportunities. Fostering and maintaining a robust nonprofit sector helps Lexington stand out from bigger surrounding cities. We can be a community where graduates from local and nearby colleges and universities can grow and thrive while engaging in challenging, meaningful work that gives back to their communities.
With the data provided in this study, we hope readers come away with a better understanding of how workers are faring within nonprofit organizations. We also hope readers start to think about potential changes in the sector and city that could help nonprofit workers and organizations better address their missions. What can make this sector a place where young workers want to be? What can organizations do to ensure that employees want to stay? How effective are organizations? The answers to these questions have to be the starting point if we want to end up at a nonprofit sector that is healthy, effective, and a strong supporter of the civic fabric of Lexington.
Scroll down for a summary of our findings
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What’s the context?
For this report, we targeted employees in 313 of the 1,986 nonprofit organizations registered in Fayette County. We intentionally excluded large organizations (like Transylvania University) and organizations with no revenue for the year 2017 (sororities, fraternities, etc.).
Of those 313, we reached 182 of those organizations.
Our survey found that Fayette County’s nonprofit sector is relatively young, white, educated, and female. These demographics do not match the demographics of Lexington, which is more diverse across age, race, education, and gender identities.
We reached a significant number of large organizations, a smaller number of small organizations, and talked to a total of 252 employees.
What is the Workplace Environment like at Lexington nonprofits?
Why ask?
To understand the viability of Fayette County’s nonprofit sector, we started with how the organizations themselves function.
Through our survey tool, we asked a variety of questions that examined how nonprofit workers feel about their workplaces. In addition to that, we relied on data from Blue Grass Community Foundation’s annual Report to the Community, which analyzes the data behind organizations as part of their Goodgiving Guide.
Through these two tools, we were trying to get at a few basic questions:
How are organizations structured?
What policies and procedures are in place at these organizations?
How productive is the relationship between these organizations and their Boards of Directors?
What did we find out?
Fayette County nonprofits are missing a significant number of policies that are commonplace across the professional sector more broadly. Organizational infrastructure is lacking across the sector, whether it be core, essential documents like strategic plans, or systemic plans like criteria for board member selection.
Few organizations have policies that allow staff members to report HR issues directly and discreetly to their Board of Directors. The absence of this policy is a massive vulnerability in their HR systems, opening organizations up to physical, mental, and sexual harassment in the workplace.
The significant disconnects between staff, executive staff, and boards of directors need to be rectified through clearer board position descriptions and more consistent engagement time between executive staff and boards.
How engaged are Lexington nonprofit workers in their work?
Why ask?
Recent research from Gallup and Facebook show the importance of engaged employees having pride in where they work. The studies revealed that less pride leads to lower employee retention and reduced productivity. A 2016 survey by Gallup found that only 29% of millennials were engaged in their work, largely a result of a lack of pride in their employer.
Once we understood how nonprofit workplaces operated in Fayette County, we wanted to see how our target workforce engaged with their workplace. We defined employee engagement as the extent to which employees feel passionate about their jobs, are committed to the organization, and put discretionary effort into their work.
We asked nonprofit workers questions focused around the following areas: pride in work, leadership effectiveness, organizational communication, accountability, employee empowerment, and innovation.
What did we find out?
Nonprofit workers in Fayette County seem to love the concept behind their job more than the job itself.
Almost all workers are proud of their organization, but many would not refer a friend or family member to their organization for employment. In fact, according to our research, over 50% of the sector is planning on leaving their jobs in the next 1-5 years, with a significant majority thinking about leaving on an annual basis.
Roughly a third of employees consider leaving their organization because of its ineffectiveness - leadership is not effective, they micromanage, and communications with their constituents are poor.
Many workers felt as though they are listened to in their organizations, and that their employer gives them the space to be innovative.
How healthy is Fayette County’s nonprofit workforce?
Why ask?
In an age of staggering income inequality, nonprofit workers stand at the forefront of combating societal inequities.
Despite this, in 2014, the Chronicle of Philanthropy published an op-ed saying that when it comes to combating inequality, “nonprofits are either missing from action or part of the problem.” They go on to say that “while charities and foundations do much to help those in poverty, some groups actually perpetuate it through their own compensation practices.”
With this in mind, we wanted to study compensation and benefits offered by Fayette County nonprofits.
In addition to the monetary value that organizations place on their workforce, we also wanted to study an often taboo subject within the sector - the impact that the work has on the employee emotionally.
Collectively, we labeled these aspects Workforce Health.
What did we find out?
Nonprofit workers in Fayette County do not earn as much as their peers in for-profit industries. Over 20% of the workforce earns below a living wage and close to 70% earns less than the area median income.
Half of nonprofit staff members in Fayette County earn enough to afford a one-bedroom apartment, but not enough to raise a child.
Speaking of children, while the nonprofit workforce is predominantly young (45%) and female (75%), less than 25% of their employers have parental leave policies.
If you see ten nonprofit workers in a room, chances are, five of them suffer from mental health issues. Only two will receive mental health benefits.
A majority of all nonprofit workers surveyed say that their job makes their mental health worse, except for those making over $80,000 per year.
How equitable are Fayette County nonprofits?
Why ask?
Equity is defined by PolicyLink - the national leader in equity-oriented policy strategies - as creating a just and fair society in which all can participate and prosper.
Organizations that are committed to advancing a social good must be committed to addressing the systemic inequities that are a result of historic racial and class-based oppression.
While many organizations are working towards equity in their mission, in order to truly build social change they must first work towards social and racial equity in their workplaces.
There is countless research from organizations like TSNE MissionWorks and the Kellogg Foundation that make it clear - it is impossible for organizations to be truly effective without first taking care of internal equity issues impacting their own workforce.
This section of this report will examine findings related to organizational policies that concern diversity, equity, and inclusion policies in the workplace.
What did we find out?
Many nonprofit organizations in Lexington believe they demographically represent their community. In fact, most are whiter and more well-educated.
Few organizations take specific measures to address equity in their organizations. These actions could range from equity and inclusion policies to understood, but informal commitment within the organization. Without these measures, organizations seem to experience higher instances of discrimination in the workplace.
While many respondents indicated that diverse voices were listened to inside their organizations, almost 50% of those that chose to keep their racial identity anonymous reported the opposite.
Many organizations seemed to be well- equipped for those that are differently abled. They are not for those who speak a language other than English.
How effective is Fayette County retaining its nonprofit workforce?
Why ask?
Successful nonprofits should be well-built to ensure that employees have the opportunity to contribute and advance within the organization in order to retain their talented workforce.
Studies show that the financial cost of losing an employee can be up to 400% of their annual salary.
But organizations are not solely responsible for the conditions which retain a talented workforce. It is also incumbent upon the greater Lexington community to build the conditions that make workers want and be able to stay in place.
This section explores the relationship between organizations and the greater Lexington community when it comes and retaining a talented nonprofit workforce. This includes: opportunities for career advancement, ability to stay in place affordably, potential for enacting systemic change, and broad community support for nonprofits.
What did we find out?
The Fayette County nonprofit sector is at high risk for losing its talented workforce. Many employees, especially younger workers aged 22 - 35, do not see Fayette County as a community in which they have the opportunity to advance their careers.
Furthermore, these same employees (which make up almost 40% of the workforce) earn less than their peers in the for-profit sector, and less than their peers in nonprofit organizations. 75% of nonprofit workers under 35 earn less than the area median income.
Workers in the sector also have a grim view of how Lexington supports the nonprofit sector. Almost 50% of workers say that in no way do the business, governmental, or philanthropic sectors adequately support nonprofits.
These indicators point to a sector overburdened by employee turnover, costing organizations tens of thousands of dollars annually, making them much more inefficient.