Photo: Luis Villasmil

This story is part of a special report on the effects of inflation on social purpose organizations and the communities they serve. Stay tuned for more reporting on this.

On a quiet Tuesday in November 2022, representatives from non-profits across Calgary gather for a press conference in the hopes of shedding light on the dire financial situation facing charities in that city.

Karen Ball, CEO of the Calgary Chamber of Voluntary Organizations, tells those assembled that after two years of attempting to “do more with less” non-profits are in crisis.

“Between the pandemic, rising inflation and now, a looming recession, this essential sector has been dealt blow after blow,” Ball says. “Staff are suffering. The people we serve are not getting the help they need. Drowning people can’t save drowning people.” 

Inflation has stripped the already low earnings of those working at non-profits of value, leaving many employees so precarious they come to rely on the very services they’re attempting to provide others.

Children’s Cottage Society CEO Danielle Ladouceur, per the Calgary Herald, says her staff haven’t received a salary increase in seven years, thanks to chronic underfunding and financial hardships.

“It breaks my heart to see essential workers who are taking care of the hearts and minds and spirits, families and children in our community, suffering themselves,” Ladouceur says. “We’ve had to help them complete applications for food banks. We see them coming in exhausted because they’re working second jobs.”

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

A 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.

The average salary at business and government non-profits was slightly higher, at $48,331 and $54,669 respectively.

“The pandemic has emphasized the importance of the non-profit sector’s work, but it has also laid bare the cracks in our operating environment,” writes the report’s author, Emily Jensen. “Low-wage, low-benefit, short-term contract jobs are prevalent due to short-term, project-based funding.”

Now those cracks are being widened by inflation and fears of a looming recession, making it more difficult for non-profits to keep employees onboard. A survey conducted by the Calgary Chamber of Voluntary Organizations found 55 per cent of their members identified staff retention as a major concern.

“(Non-profits) cannot attract employees because we cannot offer competitive wages,” Ball says. “And then when we do have employees coming into non-profits, it’s very difficult to retain them.”

More and more, non-profits serve as training grounds for people who then take their skills to the private sector, where they can earn a living-wage or better, she says. Although the issue of wages is a long-standing one, inflation has exacerbated the situation.

amanuel melles, executive director of the Network for the Advancement of Black Communities, sees the same phenomena; employees treating positions at non-profits as training opportunities due to long-standing issues around compensation. 

“The problem is that the majority of these organizations were already living in a state of precarity pre-pandemic,” he says. “Their major challenge, that continues to this day, is that they don’t have enough resources in terms of core support from governments and funders to really take care of the real cost of business.”

Black community service organizations were also hit especially hard during the first years of Covid-19, he says, a time that coincided with increased demand for services. Now those same organizations are being disproportionately impacted by inflation as well, leaving little, if anything, in the coffers to increase staff remuneration.

“And don’t forget that in the midst of all this craziness of the pandemic we had George Floyd, so many Black organizations and leaders also work … in the context of anti-Black racism,” melles says. The precariousness of inadequate compensation and little access to benefits, combined with the continuing effects of the pandemic and anti-Black hate, have left many working in Black-led non-profits burnt-out and looking for better paying work.

The Network partnered with Carleton University in 2020, releasing a landmark study titled, Unfunded: Black Communities Overlooked by Canadian Philanthropy. It found “both public and private foundations underfund Black-serving and Black-led community organizations” and that grants received by those organizations are miniscule, sporadic and fail to “invest in the long-term capabilities of Black community organizations.”

Without stable, core funding, melles says community organizations aren’t able to fairly compensate staff.

Additionally, donations from individual Canadians have decreased over the last 12 months, says Cathy Taylor, executive director of the Ontario Nonprofit Network, further straining organizations. Demand for charitable services have also increased over the last year, as have the costs of delivering those services.

The network partnered with l’Assemblée de la francophonie de l’Ontario last spring to conduct a bilingual survey of non-profits in that province, which found 88 per cent of organizations had seen costs increase in 2022, compared to only 64 per cent in 2021. Two-thirds of all organizations identified inflation and decreased donations as the most significant factors challenging their organizations.

One third of organizations surveyed also reported having a job vacancy rate higher than 10 per cent, while 65 per cent of respondents indicated they were experiencing recruitment and retention challenges. Eighty-six per cent of organizations said they’d had to scale back programs and services or, in some cases, discontinue them all together as a result of staffing levels. 

Stress, burnout and skills shortages were cited by two thirds of respondents as the key issues stymieing staff recruitment and retention. However, more than 50 per cent pointed to wage disparity and uncompetitive compensation packages as the key factor underscoring what some have called a human resource crisis in the non-profit sector.

“This is not a new phenomenon,” Taylor says. “Certainly, we’ve seen some trends towards better compensation and benefits … but it’s just not fast enough. And with inflation happening at the same time, (non-profits) are just not able to keep pace.”

The big issues limiting wages are systemic in nature, she says, adding one third of non-profits in Ontario believe inadequate funding prevents them from offering competitive wages; a key barrier to adequate staffing. 

Many organizations struggling to hire and retain staff are tasked with delivering services governments deem essential. However, government funding has lagged behind delivery costs for years, if not decades, according to those who work in the sector.

“The provincial government in Alberta, for instance, has fee-for-service contracts. And these are not donations, it’s not a grant, it is an actual contract with the government to deliver an essential service that, should a non-profit not be delivering it, would otherwise have to be delivered by the public sector,” Ball says.

Indexing government grants, as well as service contracts, to both inflation and population growth would help funding keep pace with the delivery costs, including wages, she says. Unlike for-profit businesses, non-profits can’t pass costs onto the consumer, Ball adds.

“Right now, we are seeing organizations being forced to triage their programs and services to the point where they are choosing to not deliver services that may even be essential services or providing basic needs.” One organization surveyed by the chamber, which provides in-home care to disabled adults, currently has 90 staff vacancies. 

Many charities and community non-profits are exploring other means of attracting and retaining staff, including greater flexibility, benefits, vacation time and additional wellness considerations, but funding also limits what incentives can be offered beyond wages.

“There are a few things that we could do as mitigating interventions,” says melles. “One is to be intentional and send a message to your staff that wellbeing matters, self-care matters and center that.”

That could include opportunities for extended time away from the office, remote work or building “leaderful organizations” where every role is considered a leadership role. Providing staff with opportunities for training  and professional development could also bolster retention, melles says.

Outside the box solutions, like job-sharing — splitting one full-time position into two part-time positions, or alternately, combining part-time roles to create full-time jobs, even between organizations — or human resource departments that serve several non-profits could also improve working conditions and reduce staff burnout, he adds. But melles and others say that, without the ability to offer competitive wages, the non-profit sector will continue to struggle to recruit and retain employees.

Taylor says wage parity is a substantial barrier. Governments often limit the amount non-profits can pay staff when providing a government service, but don’t impose the same restrictions on for-profit organizations providing the same service on behalf of the same government department.

For example, a personal support worker employed by a private long-term care home could be paid more than one working at a non-profit long-term care home, even if both receive government funding. “Frankly, it’s totally unethical,” Taylor says.

Seventy-seven per cent of all jobs at non-profits are also held by women, while 47 per cent are filled by immigrants to Canada. Additionally, 29 per cent of non-profit employees are racialized individuals, compared to 20 per cent in the overall economy.

The chronic underfunding of non-profits and corresponding wage disparity is a reflection of governments’ continual undervaluing of work done by women and racialized individuals, Cathy Taylor says. There’s also the perception that, because people employed in the non-profits sector are passionate about their work, they will simply find a way to keep the doors open no matter what.

However, Paul Taylor says not all blame can be laid at the feet of funders. Having spent two decades working at non-profits before opening Evenings & Weekends Consulting, the long-time activist says many non-profits also fail to adequately value the labour their own employees provide, resulting in grant proposals and funding models that don’t accurately reflect the work being done.

Capitalism influences and informs how non-profits operate, he says, creating a system where funders, business owners and others expect free labour, often because they believe people employed in the charitable sector are driven only by passion, not economic considerations.

“I cannot go to the grocery store, the convenience store and pay with passion. That’s just nonsensical,” Paul Taylor says. “But that is a way in which we have normalized the exploitation of workers, just because they may be doing work that they enjoy.”

Imagine Canada’s vice-president of research and strategy, Cathy Barr would like to see more core and unrestricted funding opportunities, more flexibility and reduced application and reporting burdens. But the non-profit sector must also take a hard look at its own practices as well, if working conditions and wages are to improve, Barr says.

“We in the non-profit sector also need to also take this information onboard, and try harder, and do better,” she said. “I know non-profits are in a difficult situation, they don’t always have the money, but we’ve got to stop using that as an excuse for exploiting workers.”

Both non-profits and funders must take account for generational, social and economic changes, melles says.

“The non-profit charitable sector, for the longest of times, has been led by people of my generation that equated their work with social justice causes and inclusion and so on. These are still important for this generation that we have at the moment, but this generation that we have is different,” he says. “Unfortunately, they are living in a society and economy that’s difficult. So for them, being properly compensated comes first.”

At the same time, melles sees an older generation of non-profit employees without pensions who are unable to afford to retire.

Cathy Taylor would like to see more community non-profits band together and advocate for change jointly. Canada’s non-profits and charities employ 2.5 million people, representing 14 per cent of Canadian jobs. And in 2019, approximately 660,000 of those workers were employed by community non-profits. 

Getting the public onboard is also important.

“The voice of the private sector and the importance of the economy has overshadowed the voice of the non-profit sector and the importance of the community,” Ball says. But the glaring inequities exposed, first by the Covid-19 pandemic, then the economic pressures that followed, are starting to shift attitudes.

“Really, at the end, governments follow voters,” she says.

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