Nonprofit Workers Reveal Financial Worries, Job Woes in New Surveys

Many nonprofit workers are worried that they won’t have enough money to retire comfortably, according to initial results of a survey on financial security among nonprofit employees that was released last month.

That concern is prompting some employees to consider leaving the nonprofit world, according to the study, which was conducted by the TIAA-CREF Institute, an arm of the retirement-fund giant, and Independent Sector.

The findings echo the dissatisfaction conveyed in a pair of surveys of nonprofit workers in New York and Washington, also released last month by the staffing firm Professionals for Nonprofits. Those studies revealed a disconnect between what nonprofits provide to their workers and what employees say is essential to their job satisfaction.

Full results of the survey about nonprofit workers and retirement will be released in the spring, but Roger W. Ferguson Jr., president of TIAA-CREF, unveiled the highlights at the annual Independent Sector meeting in Chicago.

The telephone survey of 1,000 people found that only 18 percent say they are very or extremely confident that they are putting aside enough money for retirement.

About 45 percent of respondents reported that they have considered taking jobs outside the nonprofit world because of financial concerns, including about retirement.

“There is a significant level of concern, particularly among early- and mid-career employees, around issues of financial security,” said Mr. Ferguson.

Good Job Satisfaction

But the news wasn’t all bad: Roughly three-quarters of those surveyed said they had access to a retirement plan, a higher share than in the business world.

And 76 percent of nonprofit workers in the survey are putting some money aside for retirement, even though some say they don’t believe they are saving enough.

Financial concerns, meanwhile, were not enough to make workers unhappy: Sixty percent of respondents to the national survey said they were very or extremely satisfied with their jobs.

Other findings:

• Sixty-nine percent of workers had access to “defined-contribution plans,” such as a 403(b), which nonprofits can create for employees to set aside retirement money before taxes.

• About 30 percent had access to “defined-benefit plans,” in which employers pay retired workers a specific amount each year.

Mr. Ferguson urged nonprofit leaders to find ways to help their workers better prepare for retirement.

Among his suggestions: automatically enroll new workers in retirement plans; provide regular mandatory sessions on financial literacy for workers; and contribute directly to employees’ retirement plans, rather than putting the entire burden of saving on the workers.

Mr. Ferguson said he recognized that for smaller, cash-strapped nonprofit organizations, that last option might be “a stretch.”

He said workers need to contribute at least 10 percent of their paychecks a year to be sure they have enough for retirement.

His reminder to nonprofit chief executives: “Many of us think about how we can afford our mission, but we as CEO’s also have a responsibility to think about the business side of our missions.”

Lack of Trust

The two surveys by Professionals for Nonprofits painted a grimmer picture of employee satisfaction.

Seventy percent of workers in the surveys said they found their jobs disappointing or only somewhat fulfilling. That might be a reason that 25 percent of workers said they were considering looking for a job outside the nonprofit world.

The surveys gathered data from about 3,500 nonprofit workers in the New York and Washington metropolitan areas. Among the other findings:

• Four out of 10 workers in both cities said the factors they ranked as most essential in a job are lacking at their nonprofits: “respect, trust, and support by management,” as well as a sense that their organizations have “a compelling mission.”
• About half of all the respondents said that recognition and reward for their hard work and outstanding performance were essential, yet 60 percent of those in Washington and 65 percent in New York said hard work was not valued at their organizations.
• The pay cuts that many nonprofit workers have taken during the economic downturn may be exacting a cost in employee satisfaction: About half of the workers in both surveys said a salary reduction would be a reason to leave, more so than a change in work expectations or job description.

Gayle Brandel, president of Professionals for Nonprofits, said employers should worry about workers’ unhappiness. “The cost of employee disengagement and poor performance is very high, as is the cost of turnover,” she said. “Given the increased competition for talent in the sector and the limited resources of nonprofits, these costs hit the bottom line, and so the price an organization pays for disengaged staff can be staggering.”

The Professionals for Nonprofits surveys pointed to some deep dysfunction at many nonprofits. For instance, nearly half of the workers surveyed said they felt it was essential that office politics not get in the way of their work. Yet three out of four of all the respondents said internal politics hampered their abilities to do their jobs effectively.

Responses to questions in the surveys related to the value of perks suggested that however much employees may appreciate the various benefits that nonprofits provide, they consider issues like pay and trust most essential.

For example, only 12 percent of workers cited child care or parental leave as an essential benefit, and 17 percent said they valued flexible work schedules.

Many employers, however, offer those perks; 30 percent provide parental leave and 49 percent offer flexible schedules.

“I was most surprised by the fact that many of the usual benefits that are offered to nonprofit employees are not considered essential by employees,” says Ms. Brandel.

Even though the surveys revealed widespread dissatisfaction, most employees were optimistic about the future: Nearly 60 percent think that the next five years will be challenging but “will get much better” for the nonprofit world. A similar share believe that “bold leadership for dramatic change is needed.”

The “Good Nonprofit Job Reports” for New York and Washington are available free on the Professionals for Nonprofits Web site. Go to: http://www.nonprofitstaffing.com