Overcoming the Worker and Volunteer Shortage at Nonprofits

The nonprofit sector consists of various industries, including health, education, cultural activities and social services. In the latest Bureau of Labor Statistics nonprofit report (pre-pandemic), there were 12.5 million paid nonprofit workers, who earned more than $670 billion in wages. 

However, the COVID-19 pandemic hit the nonprofit sector extremely hard, with an estimated 1.6 million workers losing their jobs in the spring of 2020 alone. Jobs lost included 41% in social assistance programs and 57% in private performing arts companies, including private museums, and civic and professional organizations. And while some of those employees have returned to the nonprofit sector, overall numbers are still down 0.6%, or about 76,000 jobs as of August 2022, according to the Johns Hopkins Economic Data Project, which has been tracking the rebound in its “2020 Nonprofit Employment Report.”

Today, the nonprofit community is suffering from a labor and volunteer shortage that impacts their services to the community. Due to the lack of volunteers and a shift in government support, some nonprofit organizations may have to stop the programs that rely on volunteer groups and readjust their goals to help those most in need.

Staffing Shortages at Nonprofit Organizations

The nonprofit industry has the third largest workforce in the U.S., slightly behind the retail, accommodation and food service industries. When there is a shortage of workers and volunteers for nonprofit organizations, people can lose access to critical services.  

The National Council of Nonprofits issued a report in December 2021 detailing how charitable nonprofits around the country are experiencing significant labor shortage issues leading to reductions in needed community services. The survey found nonprofits had the following staff vacancy rate:

• 33.5% had between 10% and 19% staff vacancies 
• 26.2% had job openings for 20% to 29% of their positions
• 16.1% reported vacancies higher than 30%

Reasons for Nonprofit Staff Shortages

Many factors have put a damper on nonprofits hiring new staff members, including:

• Salary competition with for-profit organizations
• Lack of long-term professional growth potential
• Inability to find child care
• Vaccination policies
• Stress
• Burnout

It is not just paid staff; nonprofits that rely on volunteers to help with providing their services have seen a dramatic decline in volunteerism since COVID-19 for a variety of reasons, including:

• Companies are still offering work-from-home options, reducing the amount of company volunteer groups.
• Nonprofits had to limit their volunteering activities during COVID-19 shutdowns and are still rebuilding their programs.
• Schools suspended volunteering requirements during COVID-19 shutdowns and are just now beginning to reinstate the programs.
• Due to continual COVID-19 concerns, volunteers are still not comfortable working in a large group setting.

Risks From Nonprofit Staffing Shortages

The community suffers delayed, reduced or potentially negligent care if nonprofit organizations can’t find the staff to provide the services. Clients can’t receive life-saving support, such as food, shelter and healthcare, from the nonprofit on which they normally rely.

The rising demand for the help community nonprofits provide has increased the strain on low-staffed organizations, leading to waiting lists or denial of services. Also, the overworked staff might miss steps in their procedures, leading to an increase in workplace accidents and negligent client care.

The National Council of Nonprofits survey reflects this issue as 26% of the responding organizations reported having a wait list that was more than a month long, and 21% said they did not have a wait list because they were currently unable to accept new clients. 

Lack of skilled and qualified employees will result in rendering subpar services and may increase frequency and severity in negligent claims. Nonprofits have a greater responsibility to provide superior service to their vulnerable clientele, and attracting and retaining qualified employees makes a world of difference. 

Here are four risks you nonprofit could encounter as a result of workplace shortages. 

1. Short-staffed nonprofit risks. A few of the top concerns for nonprofit institutions when it comes to worker shortages include financial instability, damaged reputations, data breaches, unknown and untrained staff, and board member liability.
2. Workers’ compensation nonprofit risks. Nonprofit staff and volunteers are vulnerable to the same workers’ compensation risks as for-profit workers. The risks of overexertion, slip and fall injuries, transportation, and lacerations or burns are heightened when there are fewer or untrained staff.
3. Employment nonprofit issues. Nonprofit organizations can have a higher risk for employment issues, such as wrongful termination, unfair hiring practices, sexual harassment and discrimination. Costs from an employee lawsuit can devastate a nonprofit’s reputation, productivity and staff morale.
4. Nonprofit director and board member risks. There is always a potential for a nonprofit organization to be held legally responsible for its actions or omissions. Nonprofit board members have special responsibilities to make daily programming and services decisions — from funding to programming — that can impact clients, vendors, donors, as well as paid and volunteer staff. Board members also take on additional risks of potential lawsuits claiming negligence, defamation or breach of contract and personal liability for acts or omissions as a board member.

Solutions for the Nonprofit Worker Shortage

Some nonprofits have decided to offer better pay and benefits and improve workplace advancement opportunities, flexibility, and diversity and equity to attract and retain their staff. Other nonprofits might be able to rely on funding reserves, fundraising or government contracts to meet short-term staffing needs, but this option might not be available for many organizations.

With demand for the services that nonprofit organizations provide increasing and with limited budgets, there are other ways to help address the nonprofit labor shortage.

• Change hiring, recruiting and internal promotion policies
• Increase diversity in staff and volunteers
• Access the organization’s culture and make changes where needed
• Offer flexible scheduling, remote work options, additional time off or other perks
• Use contract workers to outsource administrational duties such as bookkeeping, payroll, IT or marketing
• Partner with schools and universities for volunteer or co-op opportunities

On the other hand, protecting your nonprofit from the risks in necessary as well. Along with needing coverage for property damage and personal injury, nonprofits often work with vulnerable populations like the elderly or children. This means additional nonprofit insurance coverage should be considered to ensure protection of people and assets while continuing to fulfill their missions.

A nonprofit management liability policy helps ensure an organization is covered from various lawsuits. A directors & officers policy protects the board member’s personal assets from any management liability claim. A management liability policy helps attract qualified directors and officers to your board. Nonprofits can face negligence claims, fundraising issues, sexual harassment claims against a board member and more. Nonprofits have to answer to many responsible parties, like grantors, donors, government agencies and clients who all have a stake in the smooth running of the entity.

The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.