Tag Archives: nonprofit quarterly

This article originally appeared in the Nonprofit Quarterly. See the original article here.

If you want to make it in this field, you’ve got to pay your dues. That’s been the ethic in the arts and culture sector for generations. And it’s such a familiar concept—akin to the iconic American “bootstraps” mythology. Alas, it is just as mythical.

Because what lies behind this “pay your dues” ethic is a very different logic, namely pay to play—an inherently elitist system that makes entry into the field of the arts exceedingly difficult for anyone who doesn’t already derive their financial security from other sources.

The result is a far less diverse workforce and leadership pipeline, high turnover, low morale, and ultimately, arts and cultural offerings that are less vital and fail to reflect the values and visions of our communities.

A Regional Coalition Emerges

In western Massachusetts, in a region known as the Berkshires, and across the state line in Columbia County in New York state, a group of arts organizations have come together to do something about elitism in the arts and to advocate for fair compensation.

For over a year, a group of six (later expanded to eight) arts organizations coordinated and carried out a survey to systematically understand the real experience of entry- and mid-level workers, humanize their experience with first-hand stories, and make recommendations and commitments to increase pay equity—both as individual organizations, and as a growing movement. My role, as a consultant, has been to support this coalition.

The resulting effort—the Pay Equity Project—was inspired by a few separate informal grassroots whistleblower efforts initiated by brave arts workers in the region.

The coalition members, who were initially brought together by a local organization called Multicultural BRIDGE, are: Art Omi, Berkshire Art Center, Community Access to the Arts, Flying Cloud Institute, Jacob’s Pillow Dance Festival, Mahaiwe Performing Arts Center, WAM Theatre, and Williamstown Theatre Festival. A local community foundation, the Berkshire Taconic Community Foundation, has supported this effort and was the study’s primary funder.

The full report, published in June, can be found here.

Survey Findings

The study’s results are based on surveys with 188 entry- and mid-level workers. The participants came from 43 area arts and cultural employers and held 33 different position titles.

A few highlights include:

• About half of respondents consider their pay and benefits “unfair, and expectations unreasonable.”
• The average hourly wage ($19.49) barely exceeds the livable wage rate for the region ($17.78) for households with no children and no unemployed or dependent adults, according to the MIT Living Wage Calculator. For workers with children and/or adult dependents, $19.49 becomes severely insufficient.
• Over half of respondents (56 percent) have additional jobs to get by.

Beyond the numbers, we solicited long-form insights from respondents and conducted two focus groups. Here is a sample of those verbatim responses:

• “My life isn’t sustainable. I get further and further behind in all ways: financial, social fabric, health, education.”
• “It’s really difficult to feel passionate about your work when you can’t get out of debt, afford a house or a car that actually gets you to and from work, or even enjoy a nice dinner out. I gave up all my free personal time and still struggled to make ends meet and was pushed even further into debt.”
• “It is not worth it in the arts anymore.”

Employers were also asked to share anonymized data about salaries and benefits for their entry- and mid-level staff, which we consolidated into a database. Compensation information for the highest paid employees in nonprofits is easily accessible for free online using GuideStar or ProPublica to access IRS 990 forms. But compensation information for people on the lower rungs is much harder to find. That made our new database, fed by 38 participating employers representing 963 total employees, extremely valuable.

Here are some highlights:

• A third of the employers reported that some or all their interns are unpaid.
• Employers reported that 30 percent of their full-time employees earn less than $50,000 annually (before taxes), and some are earning much less than that.
• Nearly two in three employers (65 percent) lack plans to increase pay equity or aren’t sure what steps to take.

A National Problem

Of course, the issues uncovered in our local survey are not unique to our region.

Two larger scale initiatives with similar objectives are:

• Valuing Our Nonprofit Workforce Survey 2023: This effort is led by Third Sector New England. The survey stresses persistent disparities: “Compensation benchmarks across the nonprofit sector have changed drastically since the start of COVID-19. But there are still disparities when it comes to ensuring equitable wages for nonprofit employees.”
• The national Arts Compensation Project is led by the Association of Performing Arts Professionals (APAP) and AMS Analytics. The survey is framed as “an important step towards greater pay transparency, parity and equity for arts workers.”

Two completed initiatives provided additional insight and inspiration. Racial equity is the focus of The Burden of Bias in the Bay State: The Nonprofit Racial Leadership Gap in Massachusetts, undertaken by the Building Movement Project in 2019. Insight regarding Massachusetts and national trends helps underscore the added burden for people of color. That report found that more respondents who are people of color experienced bias through “organizations that lack ladders, succession planning, or effective mentoring, as well as nonprofits in which favoritism and inconsistent standards yield unfair outcomes;” that fewer people of color reported receiving cost of living and performance-based raises; and that about half of people of color surveyed said their race had been a barrier to career advancement.

The most important recommendation is for employers to develop compensation frameworks which outline how compensation is set.

A second important initiative is the Pay Equity Standards certification program, which was developed in 2020 by a small organization in Chicago called On Our Team. Originally created to address labor and pay equity issues in costume design and other theatrical design areas, the program has expanded to other sectors and other cities. To earn the Pay Equity Standards gold badge, employers must satisfy a series of criteria, such as a maximum five-to-one salary ratio between CEOs and the lowest paid employee.

Recommendations and Commitments

The following recommendations were the culmination of quantitative and qualitative insights from entry- and mid-level workers themselves, anonymized compensation data from employers, and a national scan of compensation equity initiatives. As such, these recommendations are also commitments that all eight lead organizations have made. The recommendations and commitments fall into two categories: recommendations for employers, and recommendations for movement building.

The most important recommendation is for employers to develop compensation frameworks that outline how compensation is set, including minimum pay rates, targets based on living wage data, and consistent and transparent salary bands based on job titles and responsibilities.

Additionally, the report calls on sector organizations to analyze and track the compensation ratios across the organization between the highest and lowest paid employees. Many of the recommendations concern transparency, such as listing rates of pay on all job descriptions and hiring postings, as well as having transparent protocols regarding overtime.

The report also emphasizes the need to eliminate practices that foster exclusion, such as unpaid internships. Related changes outlined include valuing lived experience in making hiring and promotion decisions and adjusting job training and professional development strategies to increase retention and help a broader range of people to succeed.

Finally, the report calls for incorporating concrete targets for compensation equity into planning, including incorporating equity commitments in multiyear financial projections and making compensation equity a regular board agenda item.

From Report to a Movement

The members of our coalition are under no illusion that a report alone will change practice and culture in the field.

Once employers practicing pay equity reach critical mass, assumptions and expectations will shift.

We now have the data. The next step is to move toward advocacy. To this end, We plan to host an annual regional Pay Equity Summit, with broad participation among arts and culture organizations, as well as other nonprofit and for-profit regional employers, to track progress, showcase pay equity initiatives, and increase accountability.

Additionally, priorities of the group are to advocate for pay equity both at the governmental level—local, state, and federal—and in the private sector, including individual, institutional, and corporate donors. Part of this work, too, is narrative in nature—that means both challenging still commonplace notions that justify exclusionary practices such as unpaid internships, as well as amplifying stories that highlight the essential role of arts and culture workers in communities.

How Do We Pay for It?

One of the most common reactions to the project and our findings is, “Sounds great. How do we pay for it?”

There are several answers to that important question. One is to increase funding for the field. While the extent of the increase in donor backing for racial justice can be overstated, the racial reckoning of the past three years does create greater possibilities to generate donor support for transformative change.

A second answer is cultural. Once employers practicing pay equity reaches critical mass, assumptions and expectations will shift, and it will make no more sense to ask how to find resources to ensure equitable compensation than to ask how to free up resources to ensure the presence of bathrooms at a workplace.

A third answer is simply about setting priorities to pay workers what they are worth.

Sometimes, this can be fixed internally, by narrowing the gap between executives and staff. But in cases where that won’t work, programming should be aligned with actual human and financial resources. In the short term, pay equity is achieved by reducing workload. In the longer term, the message is sent about what the real costs are to provide a full program without exploitation.

Clearly, the Pay Equity Project is part of a larger national conversation. Individual organizations, regional coalitions, and industry associations throughout the nation are gathering data, changing pay structures, advocating for legislative reform, and more.

One important discovery from our survey is that there is an extraordinary cultural divide between entry- and mid-level workers on the one hand, and board members and donors on the other. Making visible the experiences of what remains a largely invisible arts underclass is critical to changing how the art world functions.

So long as working in the arts is considered a privilege, the privileged will dominate the field. Not only is this result unconscionable, but it also diminishes the quality of artistic expression, and it ultimately threatens the viability of the sector.

This article originally appeared in the Nonprofit Quarterly. See the original article here.

We have to understand ourselves in generational terms. We need to see our role in the long fight that has been going on since time immemorial. 

One of my favorite quotes that’s ever been said on my show was by the great labor organizer, Indigenous labor organizer Kooper Caraway, who said the labor movement didn’t start when a bunch of guys sat down in a hall and called themselves the Amalgamated Bricklayers. He said, from the moment one human being had to serve another to survive, the labor movement was born. 

“We cannot undo…systems of oppression by playing by the rules that that same system sets for us.”

The labor movement is there in the fight against the pharaohs in Egypt. It is there in the fight against slavery in the antebellum South. It is there in the fight to expand women’s right to be full employees in the workforce and receive equal pay for equal work. It is always there, and it is here now, and that struggle is never-ending. 

It’s important to understand this because the present context that we live in works against us having that sort of generational mindset, and in fact stunts a lot of our imagination. Take the Supreme Court’s recent ruling in Glacier Northwest against the Teamsters. This is going to severely hinder the legal ability of unions to strike in this country. It’s going to open the floodgates for employers to sue unions out of existence for economic damages incurred during a strike when causing economic damages is the whole damn point of a strike. 

And so, we can look at that in two ways. One: well, shoot, they just took another weapon out of our arsenal, so we’ve got to just work with what we’re given. Or we take the generational stance, and we say, “You know what, in the 1930s, before the Wagner Act was passed, workers were getting militant, and they were forcing the government’s hand. They were scaring the living jeepers out of the ruling class.” And, in fact, many in the ruling class were beseeching the government to find some sort of peaceful resolution lest we devolve into all-out class war, which many feared we were at the precipice of. 

So that’s kind of like the broth from which the New Deal itself emerged. But the point being…that we cannot undo these systems of oppression by playing by the rules that that same system sets for us.

This article originally appeared in the Nonprofit Quarterly. See the original article here.

Total US philanthropic giving decreased significantly in 2022, one of only four times the metric has dipped in the last 40 years. The latest annual report by Giving USA shows that total giving for 2022 declined by 3.4 percent in current dollars (or 10.5 percent after adjusting for inflation) to a total of $499 billion—down from $517 billion in 2021.

The report’s findings, researched and compiled by Indiana University’s Lilly Family School of Philanthropy, are not entirely surprising. Philanthropy had been especially strong in 2020 and 2021, largely due to giving related to the COVID-19 pandemic, as well as to racial and social justice movements in the United States. In 2021, total giving exceeded a half trillion dollars for the first time ever.

At the same time, 2022 saw both sharply rising inflation and a downturn in the US stock markets—the S&P 500 index fell nearly 20 percent—both of which events negatively affected wealthy donors’ bottom lines.

Philanthropy had been especially strong in 2020 and 2021.

“One of the reasons we saw a decline in giving by individuals was because of that stock market loss,” notes Dr. Anna Pruitt, managing editor of the Giving USA report for the Lilly School. “We know historically that can really affect high-net-worth donors. On the flip side, you know, we also saw disposable personal income go down as well, especially when we adjust for inflation. That just means that households have less to give.”

The decline in individual giving is especially significant because of the outsized role it plays in overall American philanthropy, according to Dr. Una Osili, associate dean for research and international programs for the Lilly School, who oversaw the research. “Individual giving is the largest share of American philanthropy. And we’ve seen that individuals now have a relatively small share of overall giving. It’s down to 64 percent,” Osili says, which reflects a trend over the last several years; individual giving as a share of total giving has continued to decrease after it dropped to 70 percent in 2018, which was considered low at the time.

“Individual giving is the largest share of American philanthropy.”

The report found that while individual giving declined significantly (13.4 percent when adjusted for inflation), corporate charitable giving actually increased slightly, in unadjusted dollars, from 2021 to 2022, rising by just over 3 percent (although representing a decline of about 4 percent after adjusting for inflation). Giving by foundations also proved more robust, growing by about 2.5 percent from 2021 (a decline of 5 percent, adjusted for inflation). In other words, though all sources of charitable giving showed declines in adjusted numbers, these declines were much smaller for corporations and foundations than for individuals.

The differences in giving between individual, corporate, and foundation donors can be attributed to a few factors. “We actually saw GDP increase and we saw corporate profits go up in current dollars,” notes Pruitt. “On the foundation side, we see that these more institutional forms of giving are a bit more insulated” from the shocks of inflation and stock market volatility.

“It’s also worth noting that foundations tend to give on a rolling average, and their giving has been way, way up due to the COVID-19 pandemic and the movements for racial justice,” adds Pruitt.

Giving to Foundations and International Charities Bucked the Trend

Despite the overall decline in giving, a few sectors stood out for bucking that trend, including giving to foundations and international charities. Both sectors grew by about 10 percent before inflation.

One reason for those increases, according to Osili, was the war in Ukraine.

“It’s important that nonprofits continue to build relationships and engage with donors.”

“Americans have been very generous in support of [Ukraine],” notes Osili. “And with the international organization sector, we’ve also seen many of them build in new models of giving and engagement, including monthly subscription donors, for example, and taking advantage of a lot of the technology that’s available, so that it’s not just a one-time gift, but an ongoing commitment to the crisis.”

Overall, the report highlights the fact that many nonprofits are facing or are likely to face financial headwinds this year.

“There are some real challenges ahead,” Osili says. “I think it’s important for nonprofits to understand that giving has gotten a lot more sophisticated and complex. Nonprofit leaders need to adapt to this changing landscape and in some ways adapt to the new tools and vehicles that donors are using.”

Even with the decline in giving, and especially in individual giving, American philanthropy remains robust.

“This has been a very complex and unusual environment,” Osili notes. “At the same time, we’ve also learned a lot from periods of challenge in the American economy. And one of those lessons is that American generosity is pervasive, is persistent, is resilient. And generosity has been a core theme from Giving USA’s beginnings in the 1950s to the present time.”

These periods of turbulence in giving present challenges to nonprofits, but also opportunities to reinvest in fundraising. “We’ve seen that in periods of downturn, it’s important that nonprofits continue to build relationships and engage with donors,” says Osili. “It’s often the case that in those shocks there is recovery that follows the downturn and organizations that build and maintain those relationships, especially the authentic communication and engagement, that leads to donor retention and long-term sustainability for organizations.”

This article originally appeared in the Nonprofit Quarterly. See the original article here.

What would it look like if the economy loved Black people? I hold this question in my heart every day as I reflect on our current economic conditions and strategize about building a reimagined economy rooted in equity, justice, and liberation.

To be serious about closing the racial wealth gap and building an economy that loves Black people, we need to focus our attention on the US South.

One thing I am certain of is that the systemic barriers and inequities that are embedded in present financial structures have no place in a reimagined economy. I would further contend that to transform our economy into one that loves Black people, movements need to get more intimate with the topic of power. Alicia Garza defines power as “the ability to change your circumstances and the circumstances of other people.” She talks about how being precise about power helps us be precise about strategy. Without a clear destination, the steps that are taken are going to be disordered. 

As a financial activist and reparative capital investor, power and power building in this context means shifting financial policies, practices, and infrastructure into ones that seed and sustain change. It means joining with values-aligned wealth holders and investors to disrupt power by dismantling the systems that have obstructed Black communities from building generational wealth. And it means that to be serious about closing the racial wealth gap and building an economy that loves Black people, we need to focus our attention on the US South, where roughly 56 percent of Black people in the United States call home. We must invest in the Southern Black creatives, innovators, and leaders who are the biggest exporters of culture around the world and on the frontlines of change and community power building.

Closing the Racial Wealth Gap in the South

US researcher and agricultural law expert Nathan Rosenberg has said, “If you want to understand wealth and inequality in this country, you have to understand Black land loss.” Jubilee Justice, an organization founded by Konda Mason, who serves as the strategic director of my firm RUNWAY, recognizes that land ownership provides a pathway to create generational wealth, access financial resources, have agency over agricultural and sustainable land management practices, and foster community resilience.

In the rural South, Black farmers have historically experienced—and continue to experience—a lack of access to agricultural resources and credit. They also continue to face discrimination, and exclusion from government programs, loans, and subsidies. This result is the loss of farmland and restricted opportunities for economic growth. 

Of all private US agricultural land (excluding Indian Country), according to a US Department of Agriculture study, White people comprise 96 percent of farmers, own 98 percent of the acres, and generate 97 percent of farm earnings. From 1900 to 1997, the number of Black farmers decreased by more than 97 percent; in the South, Black landowners lost 12 million acres of farmland over the past century, amounting to $326 billion worth of lost land in the United States due to discrimination. 

The unjust policies that denied, dispossessed, and restricted Black individuals and communities of land ownership in the past have cast a long shadow. Policies that have routinely prevented Black communities from building generational wealth, like redlining and denying Black people mortgage loans and insurance, persist and are reflected in the massive racial wealth gap we’re still seeing today. 

Even as the struggles for civil rights, inclusion, and economic justice gain ground, investment in the South remains uneven. Grantmakers for Southern Progress shares that the South receives less than three percent of all philanthropic investment in the United States. We must increase philanthropic action to build the capacity of community-based organizations and networks leading structural change work in the region. 

As Tamieka Mosley of Grantmakers for Southern Progress and Nathanial Smith of the Partnership for Southern Equity, share: “If the South—the birthplace of historic and destructive inequities—rallies to end structural injustice, it can model for the country what the journey toward racial justice and equity looks like.”

Black communities continue to experience the ongoing legacy of slavery and racism through blatant discrimination from financial institutions whose inequitable lending practices limit Black entrepreneurs from attracting early critical investments. On average, early-stage entrepreneurs need about $30,000 in capital to get their initiatives off the ground, with friends and family of entrepreneurs on average providing $23,000 or more than three quarters, of the needed amount. All told, nationally friends and family investing exceeds $60 billion a year, nearly three times the investment level of venture capitalists. 

However, not everyone has equal access to this vital source of capital. In 2019, the median White family in the United States had $184,000 in wealth compared to just $38,000 and $23,000 for the median Latinx and Black families, respectively. With this racial wealth disparity, Black entrepreneurs are less likely to receive early-stage funding from friends and family—a critical lifeline for business startups and growth opportunities. 

It is especially critical because capital from friends and family typically has more flexible lending terms and is not tied to a person’s credit score; rather, it is based on the level of trust people have in the preparation of the business owner. These relationships and informal networks also provide other nonfinancial resources such as business advising, referrals, and support systems. For many Black entrepreneurs, particularly women, racial wealth inequality is the leading factor in why their great ideas never leave the napkin.

RUNWAY believes giving every Black entrepreneur access to the “friends and family” round of investing will be transformational for Black communities. The key to this process, as mentioned, is trust. 

By infusing trust into exploitative and extractive systems, we can facilitate pivotal early-stage investments along with wraparound entrepreneurial ecosystem support like business coaching and advising. We can provide “friends and family” funding using patient, flexible capital to advance resiliency for Black businesses and the communities they serve. 

Investing in people and places that have been historically excluded from traditional investment support will always appear risky to foundations and fund managers. The best antidote to that risk is to build trust-based, honest relationships with local community leaders and changemakers who deeply understand the region and the specific needs of that region. In the South, those relationships will be based on listening, mutual aid, and physical presence. These types of relationships are critical to making investments that shift the balance of power toward equity and wealth regeneration for Black communities. 

Listening to the Community

I recently gathered in my home state of Alabama with a delegation of fund managers, investors, and philanthropists to bring reparative finance to the people and places that have been systemically blocked from wealth building opportunities as part of RUNWAY ROOTED, my organization’s latest initiative to invest in Southern Black entrepreneurship, creativity, and innovation.

It takes long-term, non-extractive, reparative investments . . . to undo the systemic design of racial hierarchy and imagine new possibilities.

We spent a week moving through the region to learn from community leaders, creatives, and local representatives about the unique economic challenges in the area. The experience illuminated the fact that Black business ownership is a mechanism that not only builds economic power, but social and political power as well. 

Truth be told, in most cases, resistance from investors and wealth holders goes back to power. Those in power don’t want to let go of it. But the conversations like the ones we had in Alabama signal that things are changing. We must be deliberate in how we apply pressure. This involves deep collaboration between movement leaders, creatives, and community, as well as with investors, funders, and wealth holders. We must collaborate on ways to work together and co-conspire to build collective power. 

Building collective power takes telling the truth about why Black people in places like Jackson, MS remain deeply entrenched in age-old, stubborn barriers to economic opportunity. It takes investors who are willing to reckon with a history that built wealth by stealing land from Indigenous nations and extracting free labor from enslaved Africans—and to invest in repairing the conditions that presently uphold the racial wealth gap. And it takes long-term, non-extractive, reparative investments that remind us that the real work is to undo the systemic design of racial hierarchy and imagine new possibilities. 

Investing in Southern Creatives 

Shaping our collective future into one that loves Black people needs the joy, inspiration, and useful critique of our political, economic, and social systems that come from creative thinkers and makers through their art, organizing, and visionary disruption. To tap into this dynamic force of change, it is vital to ensure that the extractive finance of the past does not block our collective ability to invest in the talent and innovation of the future.

Reimagining and collaboratively shaping a world where Black people are loved means prioritizing investments in creative entrepreneurs and creative placemaking. It means investing in places like Gee’s Bend, AL, to bring long-term business capital to the women who carry the legacy and tradition of West African quilting—one of the most important cultural contributions to the history of art in the United States. It means partnering with organizations like Upstart Co-Lab and Souls Grown Deep Foundation, who journeyed with us in Alabama, to invest in the arts, cultural, design, and innovation industries in the South with a mission toward repair and justice. 

Philanthropy and investments that are transformative and inclusive are not only about diversifying the seats at the decision-making table. They also invite multiple voices into the design rooms where the table is carved out and set, ensuring it is broad and deep enough to nourish the future of local and national communities. 

This work requires long-term, flexible commitments of capital, time, and capacity with a willingness to resolve disparities in funding and support for Black-led businesses and innovation in the South. It’s also necessary to acknowledge that the economic development programs that work for coastal metros or major cities may not be the same for the South—and need to be thoughtfully adapted to meet the distinct community needs, local infrastructure, and pulse of the region. By listening deeply and building authentic relationships with community leaders, community transformation over time can occur on community terms. Through this process, people are transformed—and so are community social and economic conditions. 

I’ve always felt like investing in artists, creatives, and innovators does what Nina Simone famously said: “An artist’s duty, as far as I’m concerned, is to reflect the times.” Simone believed that artists and creatives have a responsibility to create work that reflects and addresses the social, political, and cultural climate of their era; that art has the power to serve as a mirror of society, bringing attention to important issues and fostering dialogue and understanding. 

Today, the creative economy represents $985 billion in economic opportunity. This is also a time when art from creators like Amanda Gorman, who became the youngest inaugural poet in US history when she performed “The Hill We Climb” during President Joe Biden’s inauguration in 2021, is being banned in Florida schools. Responses like this tell us that art does indeed have power. Creativity has power. Innovation and truth-telling have power. And power is transformative.

…..

Building an economy that truly loves Black people requires a profound shift in financial structures and the way money moves. Investing in the South and supporting Southern Black creatives, innovators, and leaders is a pivotal step in redressing land loss and the discriminatory lending practices Black entrepreneurs continue to face. 

We live in a moment of incredible opportunity. The mission (and the challenge) here is to take this moment and turn it into a movement that sustains the transformative work required to build an economy where we all have the power—and the right—to thrive.

This article originally appeared in the Nonprofit Quarterly. See the original article here.