Non-profits among the worst offenders for unlivable wages in Canada, say employees, experts

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It wasn’t an easy decision, but last summer, Amina Bambotia said “no” to facilitating a digital literacy project that spoke to her personal and professional experience because the salary offered fell far short of a living wage.

“While my passion for the initiative was strong, I had to prioritize my financial wellbeing,” said the Montreal-based equity, diversity and inclusion specialist, adding the non-profit’s proposal was downright disrespectful. 

“Not-for-profits are just reinforcing poverty,” said Bambotia, who was offered $19,000 to develop, research, plan, schedule and deliver 89 training sessions over one year.

“They want people with lived experience; they hire people regardless of immigration status or citizenship, but they pay nothing. How can I have a future? I don’t even have benefits.”

Bambotia, who moved to Canada from India five years ago, is considering leaving the non-profit sector. Like many others, she said her health and wellbeing have suffered as a result of low pay and unpredictable work.

According to a recent Imagine Canada study, the average salary of an individual working at a community non-profit is about $18,000 less than someone working in the overall economy.

Detailed analysis of Statistics Canada data revealed that those working in the overall economy, excluding the self-employed, earned an average salary of $57,137 in 2019, while those employed by community non-profits — which provide goods and services like childcare, advocacy, access to the arts and social services — made an average of $38,716 per year.

That pay gap is detrimental to non-profit workers’ mental and physical health, said Ryan Erb, executive director of the United Way of Perth-Huron and a board member with Living Wage Canada.

“If you’re not paid at least a living wage, you’re making choices that nobody wants to make. You’re choosing between paying your hydro bill and eating,” he said. “And when that pressure mounts, we see it turn into mental health challenges, relationship challenges … eventually, it turns into trauma.”

Income is a well-established health determinant, and research consistently shows rich people live longer than poor people. According to a recent study by the C.D. Howe Institute, Canadian men at the top of the income scale live an average of eight years longer than those at the bottom.

Lower incomes are also linked to chronic health conditions.

“People with lower incomes tend to experience less favourable health outcomes, including poorer self-rated health, higher prevalence of disease, and decreased life expectancy,” reads a 2015 Statistics Canada dispatch.

Imagine Canada CEO Bruce MacDonald said he’s heard recent reports of non-profit staff turning to the services of the very organizations that employ them, like food banks, to make ends meet.

“(2023’s) prolonged period of inflation and rising costs has been a real challenge for families of those working in the (non-profit) sector,” he said. “There’s stress, and there’s uncertainty.”

Kate Fane, a communications specialist with Evenings and Weekends Consulting, echoes that sentiment, saying people are leaving the non-profit sector in “droves” for better-paying work. She notes the average cost of a one-bedroom apartment in Toronto now exceeds $2,600 per month.

“It’s simply not realistic for people working in the average non-profit workplace, where salaries are dramatically lower than they are in the private sector, to have any kind of security or stability in their lives,” she said.

“These wages are leading to severe issues around food security, around housing security and  around related mental health issues.”

Vulnerable to economic shocks

Low wages and insecurity go hand-in-hand, said Lars Osberg, an economics professor at Dalhousie University in Halifax who studies the health implications of poor pay and poverty.

“It’s a very stressful combination, and there’s no doubt it leads to bad health outcomes,” he said.

Low wages also leave people vulnerable to economic shocks, Osberg added. If someone with savings has a vehicle breakdown, they can pay to repair it. But if a low-wage earner — someone without access to capital or credit — has a vehicle breakdown, they may lose their only way of getting to work and, by extension, their job and even their home.

“If you’re low wage, you’re already poor … but things can always get worse,” he said. “If you can’t make the rent for a few months, if you’re stressed out by that fact, and you start fighting with your partner, and you split up, who knows, by the next month, you may be homeless.”

People struggling to pay for day-to-day necessities often lose the ability to make long-term plans, said Osberg, referring to the concept of being unable to “think straight.” Even if they have retirement savings, the stress of just surviving makes financial planning extremely challenging.

Erb said a living wage, which should be viewed as a floor, not a ceiling, doesn’t account for retirement savings, debt repayment, education costs or home ownership. Even so, many non-profits seem to reside in the wage basement.

“The not-for-profit sector is among the worst offenders,” he said.

While the current cost-of-living crisis has exacerbated issues around low pay, the undervaluing of non-profit labour has a long history in Canada. Those working in the sector say misconceptions about accountability, passion and gender have depressed non-profit wages for decades.

Many non-profits feel pressured by funders to keep their administrative costs artificially low, MacDonald said, resulting in wages that don’t accurately reflect the work being done.

“There has been this belief that the sole determinant of worth will be how much you spend on administration,” he said. “And in fact, organizations are often doing everything they can to show that they’re not spending money on things like competitive salaries.”

About 77 per cent of all non-profit employees are also women, a demographic whose work has long been undervalued. MacDonald said that undervaluing is reflected in the lower wages of many non-profit organizations.

Erb added that charity workers also face societal expectations to “give back” by accepting poor wages, leading to what Osberg calls “self-exploitation.” 

“And, sometimes, there’s still a societal belief that all these services should be done by volunteers,” MacDonald added.

Helen Krygsman said she was often expected to volunteer for the prominent non-profit service provider she spent more than two decades working for in Southwestern Ontario. Even though she enjoyed teaching, she left her role as program coordinator for education this spring and now works as a realtor and renovator.

“The wages were not great, and there was the insecurity that came with having to apply for funding every year,” said Krygsman. “

“And a lot of your time and effort was on a volunteer basis, so unpaid, and if you’re raising kids, and you need that income, that’s a high expectation to have.”

Unequal pay for equal work

But what was most frustrating, she said, was seeing people with the same job title as her being paid much more for doing the same educational work at colleges.

“That really did not seem right,” Krygsman said.

Her experience is a common one, and experts say consistent undervaluing of work, even when employees earn far more than a living wage, is an irritant that negatively impacts wellbeing.

Ankita Rao recently left the non-profit sector for a government position and saw her pay increase by 50 per cent.

“One of my main reasons for leaving the more traditional (not-for-profit) space as an employee was, in fact, the wage,” said the Ontario-based chartered financial analyst. 

“And I noticed that, if I tried to negotiate or ask for more, there was often an underlying sense of, but we are here to do good, so why are you asking?”

There’s also an elephant in the room that few want to address publically, she said.

“It’s more about socioeconomic status and classism,” Rao said. “There’s an inbuilt hypocrisy.”

Many non-profits focus on alleviating poverty and serving equity-deserving groups. Still, their funders and board members often come from immense economic privilege, Rao said, describing quarterly appeals for funding as stressful and “feudalistic.”

Several people currently or formerly employed by the non-profit sector reached out to Future of Good, expressing this concern. 

“There’s a disconnect because that person sitting as board chair has never had to live paycheck to paycheck, and they’re expecting staff to work for wages they themselves would never work for,” said one non-profit veteran who requested anonymity. 

“They don’t often know what financial stress is.”

For many years, charity work — particularly in the art world — was seen as the purview of wealthy women who didn’t need to earn a living, said Laura Adlers, a long-time non-profit arts manager who now works as a private consultant in the Greater Toronto Area.

“When arts management was sort of a fledgling career option, it was primarily something that wives in wealthy couples would do sort of like a hobby,” she said. 

“And we’ve never really gotten past that mentality.”

The “starving artist” trope also contributes to the undervaluing of work done at cultural non-profits, she said.

Increased funding a challenge 

Ultimately, increasing wellbeing at non-profit organizations requires increased wages — which in turn requires increased funding. But how to achieve this remains debatable, with fingers pointed in various directions.

A 2022 survey conducted by the Ontario Nonprofit Network found that one-third of non-profits in Ontario believe inadequate funding prevents them from offering competitive wages.

“I think that it starts with the board,” Rao said. Salaries are driven by the amount of funding available, but she noted boards write funding applications and make those requests.

“So, what are we writing in those application forms and pitch decks? Are we underselling the real cost of doing this work? And why are we underselling the real cost of doing that work? Why don’t we account for competitive market rates?”

Easier said than done, said Wendy Morrison, who worked with Yukon non-profits and their boards for more than 20 years before founding YZED Projects, a social innovation company that works with government and private businesses and non-profit organizations.

She said the power imbalance between funders and non-profits makes it challenging to advocate for higher wages without jeopardizing program stability. Employee wellbeing is rarely discussed during negotiations. 

“Fighting for wages creates a power dynamic that isn’t a good one … and you’re concerned that an increased ask for wages is going to impact your ask for programs, putting people in a vulnerable position,” Morrison said.

“There is a palpable fear of upsetting the funders.”

MacDonald noted government agencies contract many non-profits to provide services. Those contracts rarely account for wage growth or inflationary costs, he said.

“We have been in a period of little or no inflation for a couple of decades, and there are very, very few organizations who had cost-of-living increases built into sponsorship or donation agreements,” said MacDonald.

Governments often go further, actively capping wages at non-profits delivering services on their behalf, even when they only provide a portion of an organization’s funding. Ontario’s now-repealed Bill 124 capped public sector wages and imposed restrictions on community non-profits.

A government home?

Imagine Canada is leading the charge to create a home in government for charities and non-profits, something many organizations hope will improve access to federal funding, open new lines of communication, increase the value placed on the non-profit sector and, by extension, increase funding and wages.

The charitable and non-profit sector contributes 8.5 per cent to Canada’s gross domestic product. Canada’s non-profits and charities also employ 2.5 million people, representing about 14 per cent of all Canadian jobs.

But those employed by the sector say the public doesn’t always see the value of their work and, as a result, don’t put political pressure on those with the power to improve wages and working conditions.

“There needs to be a shift in how the public sees non-profit work. This is a skilled workforce that is chronically underpaid,” Morrison said.

Until that shift happens, low wages will drive people away from the non-profit sector and contribute to a lower quality of life for those who stay. 

Bambotia said non-profits must stop seeing themselves as passive funding recipients from donors and stakeholders and exert agency over the funding process.

“Non-profits take on these big mandates, and then they don’t have resources, so they don’t have the right person in the right role because they can’t compensate them — they don’t have the right wage for the right people,” she said. 

“People within these systems are burned-out and under-appreciated.”

Still, Bambotia said her heart isn’t into working for a corporation.

“I want my work to have purpose, but I can’t have purpose and no money,” she said. “I need a job that can support a comfortable life.”