May 2, 2022

This International Workers Day (May 1), at Fund the People we are celebrating the contributions, professionalism, skill, and dignity of nonprofit workers in communities across the United States of America and around the world. 

There are 12 million people employed by nonprofits in America. A few of these are celebrated publicly as highly-visible leaders of their causes. But many, many more work hard in the background, unseen, unrecognized, under the difficult circumstances of urgent need, limited resources, and growing levels of trauma and burnout. They are the “essential workers” of our civic life. 

Collectively, this nonprofit workforce needs – and deserves – investment from organized philanthropy. Moreover, we need that investment from the federal government, which – if you include tax-exemption and tax-deductible contributions – is one of the most significant investors in the nonprofit sector, and heavily reliant on the nonprofit workforce for delivering the social safety net, education, environmental stewardship, arts and culture, and so much more.

Thankfully, there is some reason for optimism in this area.

On April 26, 2022, a bipartisan pair of Members of Congress – Congresswoman Betty McCollum (MN-04) and Congressman Fred Upton (MI-06) –  introduced the Nonprofit Sector Strength and Partnership Act of 2022, with support and encouragement from Independent Sector, National Council of Nonprofits, KaBoom, and over 500 local and national nonprofit endorsements, including Fund the People.

The act seeks to strengthen the nonprofit sector, make the federal government a more productive partner with nonprofits, improve access to data about the sector, and raise awareness of the nonprofit sector throughout government.

It’s incumbent upon all of us in the social sector to help our elected representatives in the House and Senate understand the great need – and the great opportunity – for the proposed new level of partnership between the government and the nonprofit sector. Let’s make it happen!

There is a lot packed into the bill. The summary of the bill is a helpful overview, but doesnt touch on it all. So it’s worth reading the 25-page bill if you have time.

There are three important elements of the act that would increase federal investment in the nonprofit workforce specifically that I want to highlight:

  • Paid Internships and Staff Professional Development: The proposed law includes language that Fund the People advocated to be included. This would mandate the White House to study how federal grants can enable and incentivize nonprofits to utilize government funds for relevant professional development to employees working on those grants, and ensure that interns working on government grants or contracts are paid, not unpaid.
  • Fixing “Overhead” Ratios in Federal Funding: The bill calls for a review of federal statutes and regulations to identify inconsistent requirements and restrictions on payment of ‘‘administrative costs’’, and consider the impact of inconsistent or conflicting rules on organizations seeking federal and state pass-through grants on their operations and sustainability. Fund the People proposed language encouraging living wages for nonprofit workers whose salaries are drawn from federal contracts or grants. That did not make it in to this initial version of the bill. However, getting a coordinated effort to improve the “direct”/”indirect” formula in federal funding streams could go a long way toward improving how government funding impacts compensation across nonprofit organizations.
  • Data on Nonprofit Employment: The bill would create a centralized process for compiling and publishing federal data on nonprofits, including data on nonprofit employment and wages; federal funding of nonprofits; types of revenue; and data on volunteering and civic engagement.

We are very grateful that Fund the People has had the opportunity to raise the interests of the nonprofit workforce specifically within the wider context of advancing the nonprofit sector through the Independent Sector-led coalition that has helped advance this legislative agenda. 

Related Resources:

About the author 

Rusty Stahl

A prominent advocate for investing in America's nonprofit workforce, Rusty Stahl is President and CEO of Fund the People, which he founded in 2014. As host of the Fund the People Podcast, he enjoys geeking out about talent-investing with amazing colleagues. He previously served as founding Executive Director of Emerging Practitioners in Philanthropy (EPIP).

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