Nonprofit Job Vacancies Persist for Third Straight Year

Over the past three years, companies have been abuzz with worries about staffing issues. Similarly, people looking for jobs and holding them have fretted about the job market itself.

The nonprofit sector has not been immune to these challenges. The National Council of Nonprofits has released striking findings from its second Nonprofit Workforce Survey in a new report. Following the initial 2021 survey, this iteration reassessed the impact of the COVID-19 pandemic on workforce shortages.

Not much has changed with regard to job vacancies, findings from the survey of more than 1,600 participants showed. In the April 2023 survey, 74.6% of nonprofits reported vacancies, compared to 76% in 2021.

Specifically, a similar percentage of nonprofits in 2021 (33.5%) and 2023 (32.7%) reported vacancy rates of 10% to 19% — the most common vacancy rate range selected. However, there was a steep increase in the percentage of nonprofits reporting vacancy rates of 10% or less between 2021 and 2023. There was also a decrease in the percentage of organizations reporting vacancy rates of 20% to 29%, dropping from 26.2% in 2021 to 18.9% in 2023.

Credit: National Council of Nonprofits

Though estimates show the nonprofit sector has recovered from job losses during the pandemic, the survey identified 51.7% of nonprofits had more job vacancies than they did before the pandemic, while only 6.5% reported fewer openings. 

The effects of these vacancies have rippled into how nonprofits are operating. Continued delays in service have been the greatest concern, according to the report. About 28% of respondents reported their waiting lists had gotten longer since the onset of the pandemic; in contrast, 2.4% said they had shorter waiting lists since then.

Delayed service was strongly correlated with job vacancies. The most frequently reported vacancies were in the program and service delivery category (74%), followed by entry-level positions (41.1%). Because entry-level workers are most likely to interact with the public and have in-person requirements, organizations with these vacancies suffer on the service delivery front. Other vacancies included administration and HR (31.7%), development and fundraising (25.2%), senior management (12.5%) and communications (11.1%).

Credit: National Council of Nonprofits

“To put it bluntly, a shortage of workers at a fast food drive-thru or at the Department of Motor Vehicles means an inconvenience,” David L. Thompson, vice president of public policy at the National Council of Nonprofits, said in a statement. “But a workforce shortage at a nonprofit means people who are not receiving vital — sometimes lifesaving — services, like food to eat or a bed to sleep in.” 

Limitations on the Employee Recruitment and Retention Effort

It is important to recognize that there are several barriers to recruiting and retaining employees at nonprofits. Here are the ones nonprofits reported most in the 2023 survey.

Salary competition. Survey responses indicated that the salaries and benefits being offered by other organizations — particularly larger nonprofits, for-profit businesses and government sector organizations — posed a threat to nonprofits’ recruitment and retention efforts. Like in 2021, this was the most reported barrier to recruitment and retention, with 72.2% of nonprofits citing it as an obstacle this year.

Budget constraints. About two-thirds (66.3%) of nonprofits reported their budgets prevented them from hiring, raising salaries or upgrading equipment.

Stress and burnout. This was reported as an obstacle by 50.2% of nonprofits. Not only do the other factors identified in the study contribute to employee burnout, but so do workforce shortages themselves. These factors leave employees with heavier workloads, fewer resources and lower payouts for their work, which can be demoralizing, according to the report.

Issues with government grants and contracts. Government grants and contracting were reported as an obstacle to recruitment and retention by 20.6% of nonprofits. The specific challenges fell into five categories: failure to pay full costs, unnecessarily complicated application processes, burdensome reporting requirements, late payments, and mid-stream changes to grants and contracts.

Child care. The proportion of participants reporting the inability to find child care as a contributor to vacancies was 14.6%, down from 23% in 2021.

Other factors. Some nonprofits shared that a culmination of these factors was responsible for challenges with recruitment and retention — not just one factor. Others highlighted increased housing costs, pay inequity and the loss of long-tenured employees who were “long overdue” for raises.

External Challenges Affecting the Nonprofit Workforce

Aside from the obstacles that may be addressed — at least partially — from within an organization, there are external factors that might affect nonprofits’ abilities to recruit and retain staff. Many are challenges that are not exclusive to the nonprofit sector, but being a nonprofit can exacerbate the issues. Here are some of the barriers.

Charitable Giving

Charitable giving is a strong indicator of an organization’s ability to expand or maintain its current functions. Survey results showed that 70.5% of nonprofits and 68.7% of respondents expected donations to remain stable or decrease in 2023, following last year’s trends reported in the latest Giving USA and the Fundraising Effectiveness Project reports.

Natural Disasters

People often lean more heavily on nonprofits when disaster strikes, straining nonprofits’ resource pools. Responses about natural disasters depended on whether a nonprofit operated in an affected area; 63% of nonprofits reported the question did not apply to them. Of those who reported otherwise, 21.8% reported increased costs of providing services, 21.3% reported an increased demand for services, and 10.4% reported staff had been affected by natural disasters.

End of COVID-19 Public Health Emergency

The COVID-19 public health emergency ended the month after the survey was conducted, on May 11. Because this brought about the termination of several federal and state relief policies, millions of people were left without resources, such as SNAP benefits, Medicaid, and coverage of COVID-19 testing, they had been relying on throughout the pandemic. 

Many survey respondents anticipated these changes would affect their nonprofits’ ability to provide services. For instance, mental health providers reported loss of insurance coverage may result in people not being able to access resources for health or dependency issues. On the other hand, another nonprofit said the loss of state and county funding has already translated to losses in contracts and services. Still, some nonprofits said they would have to be more diligent in tracking grant awards to accommodate anticipated upticks in the demand for services.

Economic and Legislative Challenges

Survey participants reported the impact of inflation on operating costs, as well as legislative changes, have made employee recruitment and program continuation difficult. 

According to one Florida nonprofit: “Our work is focused on helping the most vulnerable and on health equity, but the laws being passed against race education and the LGBTQIA population are actively challenging our work and the work of our partners and governments.”

Solutions and Suggestions for Addressing Shortages

Most commonly, nonprofits have been increasing employee salaries to curb issues with recruitment and retention, with 66% reporting this change, according to the 2023 report. Some other changes they have made include:

• Providing remote work options (57.7%)
• Increasing benefits (40.9%)
• Offering one-time bonuses (39.3%)
• Having DEI trainings and strategies (39.2%)
• Presenting opportunities for career development (35.8%)

Survey respondents also proposed some solutions that would help fill the job vacancies they have, including funding opportunities to cover staff salaries and benefits, as well as more support for staff to reduce inequities in professional development and salaries.

Additionally, respondents suggested improving the connection between soon-to-be nonprofit professionals and the sector, such as requiring internships with nonprofits before graduation and developing grants to address employment barriers. 

One Nebraska nonprofit highlighted a need to change how we think about funding: “Smaller nonprofits fill important gaps and, because of their agility, often can reach folks larger organizations cannot. Both are needed. The trend seems to be financial support heading to larger nonprofits. Smaller nonprofits need to be able to hire/retain high-quality staff, too.”

Like in the first survey, respondents emphasized that public policy improvements could help them address workforce shortages. They suggested changes, such as restoring incentives for charitable giving and reforming government grant and contracting systems. 

In particular, responses highlighted the complexity, constraints and time-consuming nature of the grant process. To address this, they said things such as intricate data reporting requirements, paperwork, and short grant durations should be changed to make grant applications more nonprofit-friendly.