I’ve been told to implement a decision that I think is unethical

A reader writes:

I’ve been working in Human Resources for about four years, two of them in my current organization. I work in a small team of four – my coworker and I handle most of the day to day, as well as projects, and we also have an administrative assistant who handles the clerical functions. A director oversees us, but she has a few other departments so she is not always very involved.

The organization I work for is a nonprofit focusing on homelessness, hunger, and poverty. I feel strongly about the mission, which was a primary reason I made the move from a corporate environment to here. However, over my two years here, some decisions have been made regarding employees that I feel are unfair and inconsistent with our mission. For example, we often underpay employees, don’t give raises, and push healthcare premium increases onto them. I realize nonprofits are always short on money, and I’ve chalked most of it up to that and tried to make a difference where I could.

That said, the director shared with us recently that senior leadership has decided that the four employees who were identified through our ACA compliance process as needing to be offered health insurance, despite being coded as per diem employees (meaning they’re working full-time hours on average but are still coded as per diem and therefore were no previously offered health insurance through us) will not be moved to full-time status because this way we will only need to offer them health insurance but not PTO, dental insurance, life insurance, etc. Essentially, they want to keep them incorrectly coded to skirt around having to offer them the benefits our other full-time employees receive. For reference, we already have about 200 staff who are full-time, so this wouldn’t be a significant increase. My director is insisting this is okay because it’s not illegal.

It’s not illegal, but I still think it’s wrong. It doesn’t foster positive employee relationships or speak well to the type of employer we are. It certainly doesn’t help retention and employee engagement, which are all things I care deeply about as an HR professional.

However, even more of a sticking point for me is the fact that one of the services we provide as a nonprofit, in an effort to prevent homelessness, is trying to find people stable employment. Yet here we have an opportunity to offer four low-wage workers better hours and benefits and a more stable position, and they won’t do it because it’ll cost a few extra dollars. It feels hypocritical.

I’ve been asked to communicate this to the four employees and I just don’t know if I can. It feels ethically icky to me. Am I overreacting?

I don’t know enough about the ACA compliance process to know if this is legal or not, so I’m going to take your word for it that it is.

But yes, the law aside, if someone is routinely working full-time hours over a sustained period of time, the right thing to do is to treat them as a full-time employee, meaning that they should have access to the same benefits as other full-time employees. If there’s truly good reason not to do that, then it should be explicitly addressed and explained so that everyone is clear about the reasoning and can see that it’s being applied logically and consistently.

And yes, it’s especially messed up for an organization that works to alleviate poverty to try to skirt the line on this.

I’d say this: “Given that these employees are in fact regularly working full-time hours, I’d argue it’s at odds with our mission to try to keep them off of our full-time benefits, and that it could cause real employee morale issues if people realized it, as well as PR issues if donors or the public heard about it. I think we have an obligation to pick up these costs, and that there’s real potential of eventual fall-out if we don’t.”

If you’re overruled, there’s not much more you can do about it; at that point you’d need to decide if it’s a deal-breaker for you or not. I’d probably consider it in the wider context of what you know about the organization’s ethics and how it operates. If things are otherwise pretty good, that’s worth considering. But if this is part of a larger pattern of ethical issues or problematic treatment of employees, I’d weigh that all pretty heavily.

{ 253 comments… read them below or add one }

  1. TCO

    One thing that has long frustrated me (as an employee of organizations that serve people experiencing poverty and homelessness) is that I don’t know of any organizations in this sector who make a public commitment to pay all of their employees a living wage. I’m sure someone out there is doing this but none in my area. Sometimes the lower-paid employees struggle to make ends meet as much as some of their clients do. I understand the challenges of paying higher wages, but these organizations–of all places–should know better.

    OP’s organization is another sad example of this.

    Reply
    1. Mike C.

      As pro-union as I am, it’s something I see in those areas as well and it really pisses me off as well. You shouldn’t be creating more poverty.

      Reply
      1. Kelly L.

        It sounds like it might stem from the whole belief in our society that any “overhead” in a charity’s budget is evil. “Overhead” often just means…paying people to do the work. That’s not to say no charity has ever wasted money, but people really disproportionately hate “overhead.”

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        1. Nother Name

          Yes, and the American way to cut costs is on the backs of the lowest-ranking employees. I mean, we can’t expect anyone at the executive-level to give anything up.

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        2. Not the Droid You are Looking For

          I get so frustrated when I see my friends facebook posts about, “don’t give to XYZ charity, they spend 15% on administrative costs and only 85% goes to programs.”

          It’s like, hello, if a business got it’s operating costs down to 15% and had 85% profit the owner would be celebrated.

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          1. Career Counselorette

            Seriously- that’s an amazing ratio. Plus, embedded in “programs” is, you know, PEOPLE TO STAFF THOSE PROGRAMS AND IMPLEMENT THE SERVICES.

            Reply
          2. Artemesia

            The problem is analyzing how that money is spent. I don’t want to pay the founder of Susan Komen a bloated income and for her to ride first class and expense her life to the charity — I am happy to pay teachers in a program that educates kids or helps adults make a welfare to work transition a good salary. Both might look the same in % of overhead. Lots of charities exist to provide cushy jobs for grifters. Paying these four employees decently does not equate to that sort of abuse.

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          3. Sunshine Brite

            Yes, this. One major thing that stuck with me from a macro practitioner was that 15-30% is what places should be aiming for but everyone’s aiming for as close to 0% as possible because of public perception and it negatively affects the organization and services.

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            1. Elizabeth West

              Yeah, really. How do you expect them to do the work if they can’t eat?

              I agree with Artemesia; I’d rather donate to a place that takes decent care of its employees and still does good work. In fact, I would assume they’d do BETTER work because they would retain good employees.

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          4. Al Lo

            I think that the fair way to look at cutting overhead is things like getting office furniture and computer equipment donated (we get all of ours through various corporate programs where businesses donate or sell for very cheap to non-profits when they upgrade or change decor), making use of non-profit pricing for software and other programs, and finding in-kind donations strategically (and offering tax receipts for said donations, which makes them much more beneficial to the donor). My boss always says “We don’t spend money on anything not directly related to the program” and while that’s not entirely true, it is true that we spend virtually nothing on furniture and computer equipment.

            We run on very tight margins right now at my non-profit. We’re in the middle of a building campaign, and that ripples down through the entire organization. When we purchase our building (which should be in the next year or so, depending on how certain municipal funding comes together), our building expenses will drop from $15,000/mo to $7,000/mo, and that gives us a significant amount more breathing room. Every expense matters right now, but thankfully, salaries aren’t being touched. In either direction, which isn’t great when we need COL adjustments, but at least not down in the meantime.

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          5. Anon for this

            Then there are programs where the employees literally *are* the programs. I work for a non-profit legal organization. The receptionists who answer the phones, the lawyers and paralegals who advise and represent the clients – those are the services funders are paying for. If salaries are too low, benefits aren’t good, and we don’t have supplies and equipment to do our jobs properly and efficiently, then your dollars aren’t going to go as far as they could. There will be higher turnover, the best employees will leave for greener pastures, and those who are left will be stuck with inefficient systems and limited resources.

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            1. Evie

              Hear hear!
              It’s not quite the same thing, and I’ve never worked there but I know of a special school in my city which a few people I’ve chatted with have critisized because of the high fee cost (and to be fair – it is significant). But I look at the fee and say – well this is a program which is different to basically everything else around, in part because (at least this used to be the case – I think they’ve changed their program a bit since , including dropping the school fees) they offered 1:1 staff:student ratios. So yeah, the fees were high because you’re essentially paying someone’s salary to allow the ratio. You’re essentially (very directly) getting what you pay for there.

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        3. SL #2

          Exactly! My organization has grant money to do our work and to provide our services… but our funders always write in a set amount for overhead. The general public doesn’t understand that the nonprofits they hate so much because of “overhead” literally uses that money to pay their employees and to keep the lights on.

          Reply
        4. Stranger than fiction

          And sadly, from what I hear, these are often the same orgs where the people at the top are paying themselves quite well.

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          1. Rex

            Well, but for the vast majority of the time, that is not the case. And even when so, we’re usually talking wages way, way lower than people would be getting for comparable positions in the private sector. Can we please end this myth once and for all?

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              1. Lionness

                I agree with you on the surface, but I think it depends on a few things:

                1. What one considers an “outrageous salary” and 2. The difference in salaries on the top and salaries on the bottom. I consider both of these when I consider whether or not a non profit is over (or under) paying and whether or not I will contribute to them or contribute to another which more closely aligns with my personal standards.

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                1. phedre

                  I completely agree. How big is the organization? If the nonprofits has a budget of $750K, paying the ED $200K is ridiculous. But if you are a large nonprofit ($25M) with proven outcomes, for me $200K/year is reasonable, assuming of course that the bottom people aren’t being paid $10/hr.

                2. LBK

                  I’d argue that the comparison to CEOs of other organizations of the same size is more important than comparison to the lowest wage earners because a non-profit still has to try to attract good candidates. It’s hard enough to find people who are qualified to run an entire organization; it’s even harder to find one who’s willing to do it for half of what they could be making at a for-profit company just because they really, really believe in the mission.

                  We talk a lot on here about ensuring people are paid a wage commensurate with the market value for the role and the experience they bring to it. Why would that stop applying as you move up the food chain?

                3. Lionness

                  LBK, I don’t accept that from corporations and I won’t accept that from non-profits, either. If they have to pay their top folks high salaries, then they need to find a way to pay their lower level folks a reasonable salary, as well. I simply can’t accept an ED earning $250,000/year while their social workers earn just above minimum wage.

                4. LBK

                  I certainly agree with raising salaries for the lowest earners across the board, but I don’t think that necessitates decreasing salaries for people at the top in the interest of maintaining an arbitrary ratio. Frankly, I hope to be in the upper echelons of management one day and I’d hope I’ll be earning a wage that reflects the hard work I’ll have put in to reach that point – I’ll be pretty frustrated if after 20 or 30 years of busting my ass to get promoted I’m only making twice as much as I make now.

        5. Tyrannosaurus Regina

          Oh man, you are not wrong. Nonprofits, especially nonprofits that profess to meet a need or needs specific to folks living on low incomes—who refuse to pay their staff even close to a living wage, make me so sad and mad.

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      2. Stephanie

        Yeah, it’s a problem at my company. We have a strong union presence, so the union guys get paid fairly well…but then the first line managers like me are paid peanuts and barely scraping by. It’s tough because I do think the union is a good thing for the represented employees, but it’s hard for most of us to make ends meet.

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        1. Sarah

          I have worked for unions/have a degree in labor studies, and from my understanding, certain types of managers and supervisors (especially low-level/low-wage ones) can unionize, they just aren’t allowed to be part of the same bargaining unit as the employees below them. It might be something you and the other first-line managers should look into you.

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          1. doreen

            Actually, two of the three unions I’ve belonged to represented both supervisors and those they supervised. It’s not an ideal situation but it happens. I’ve never seen managers permitted to join a union , but I know when I was in college and working in fast-food, the “assistant manager” position would have more accurately been described as a “supervisor”. I could see that sort of position being eligible to unionize.

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        2. Aunt Jamesina

          Yup, I work at a school, and the faculty have great pay (really!), but the staff members make hourly wages that are below the poverty line (especially when you factor in that they aren’t paid when school is out. Though they can get another seasonal job, it can be tricky to schedule).

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        3. Not So NewReader

          I hear that union jobs pay well, but I am not seeing it. The one union job I had most of my coworkers qualified for food stamps. And we lost a day’s pay each month for union dues. It’s a very large union and I still see union members in various locations. These people are barely scraping by.

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          1. LadyTL

            I work for a grocery union in Canada and find it to be pretty decent (not amazing but decent). My union dues are about an hour’s pay once a week though I only get paid minimum wage and there is no way to get a raise short of getting a position higher up even if you take on more responsibilities. It is balanced out though by I don’t have to worry about getting fired to appease some angry customer who didn’t get their way.

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    2. Ad Astra

      My mother has several problems that have led to her working with different kinds of social workers over the years, and it was always appalling to see them trying to get my mom back on her feet while they were barely making it themselves. Even with a master’s degree, their cars were falling apart and they were 30+ years old but still had roommates, and the only social workers we knew who stayed in the field much past 30 were those who married someone with a higher-paying job. It was very discouraging.

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      1. Nother Name

        I’ve known a few former social workers. In addition to the low pay, it can be an emotionally draining job. If there is an afterlife, I think anyone who does it for 10+ years is guaranteed their spot in heaven.

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      2. Sunshine Brite

        4 years in and it is very rough. I have seemingly insurmountable student loans which I went into county work just for loan forgiveness, I have job stability which isn’t afforded to a lot of people and a seemingly higher wage because of the union but it’s the lowest rate in the metro region where I’m at with the most clients. So much of it is tied to state funding and what the public thinks we’re worth which is next to nothing. One of my coworkers doubled her salary when she took this job which is absurd since she still needs a roommate to make rent.

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        1. Elizabeth West

          It’s stupid–people don’t want to pay for social programs because BOOTSTRAPS, but there are enough people who legitimately need services that we need them.

          And that whole bootstraps thing makes me want to slap somebody.

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          1. Lionness

            Do you mean to suggest that there are people out there that work really, really hard every day for years upon years that won’t become fabulously wealthy?

            Because here in Murica, all you have to do is try and the dollars come raining down upon you.

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          2. Natalie

            I’ve probably mentioned this here before, but it started as a humorous, hyperbolic way to describe doing something impossible (“it’s like pulling yourself up by your bootstraps”). Apparently some people took it seriously.

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    3. Badmin

      This seems to be pretty common, the only people I’ve seen get paid fairly in not for profit are fundraising staff and CEO. Not the ones serving the clients on the frontlines

      Reply
      1. OwnedByTheCat (formerly Anony-Moose)

        Yep. I’m in fundraising and I am making about $20K more a year than our entry-level program staff and probably $10K a year than more senior program staff. I’m thrilled I have a job that pays well but it is an odd situation to be in. I think a lot of people in the nonprofit world think the fundraising staff is paid too much but…maybe everyone else is just paid too little.

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        1. Beebs

          Yes – and also if fundraising staff are good at their job then the program staff get to keep doing what they do. I wish my dev manager was held accountable to her position. I run a very successful and much needed program, but I am going to be losing my job soon because dev mgr has failed to bring in any funds (for years).

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        2. Badmin

          Definitely, and I definitely don’t want to diminish the fundraising role, it’s very important. I would just like to see the roles with high burnout rates and on the front lines brought up to standard.

          Reply
      2. Ask a Manager Post author

        I think, too, there’s often a difference between pay once you’re more senior and pay when you’re pretty junior. During my 15+ years in nonprofits, I was always paid fairly (and I’d even argue well) once I hit a certain level of seniority (probably because at that point you have skills that are more in-demand and more negotiating power) but earned crap before that, and that’s always seemed like a pretty common set-up to me.

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        1. phedre

          This is so true. If you’re in the nonprofit field for the long haul you can eventually make good money. But when I started in development, I spent years making $35K in a big city (despite pulling in tons of revenue – they even cut my hours 2 months after successfully bidding on a contract that would give us $1.5M/year over 7 years) and had to work a second job waiting tables at night for over 4 years. I’m finally making reasonably good money as a development director, but I have nearly 10 years of experience that I got while making peanuts.

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        2. Not So NewReader

          And that right there is the problem, the pay disparity. Upper management people could not grasp that their front line folks could not make ends meet. The disconnect was huge. But you could see it. You could see it in the clothes they wore and the cars they bought. And the jewelry- don’t get me started on the thousand dollar bracelets. Most of us knew we would never buy clothes and cars like that if we remained employed where we were.
          We have had people get killed in the course of their work day, and they were making 20k or less. Yet, the disparity continues.

          Heck, police officers here make $12 per hour.

          I really fear for companies who lack the ability to understand this stuff.

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    4. Green

      There are lots of local living wage certification organizations. Ask a non-profit in your area to start a certification program modeled from one of those! I certainly spend a lot more money at businesses and non-profits that are themselves socially responsible.

      (In contrast to my United Way posts the other day — there’s a difference between excessive compensation that sacrifices the mission and living wage compensation that reinforces your mission.)

      Reply
      1. TCO

        “There’s a difference between excessive compensation that sacrifices the mission and living wage compensation that reinforces your mission.”

        Well said.

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        1. WellnessChica

          “There’s a difference between excessive compensation that sacrifices the mission and living wage compensation that reinforces your mission.”

          +1,000,000,000

          Reply
    5. Anoning it Up

      I see this in so many industries and it is so frustrating. I suppose it’s the office equivalent of the plumber whose sink leaks, but there are some organizations that need to live their mission. I definitely understand the OP’s frustration. I’ve been applying to jobs recently that focus in labor and employment law, and when I look at how they treat their employees…. just because you know the baseline for what the law requires doesn’t mean you should do only the bare minimum. Seriously, if you’re a firm that focuses on discrimination law, try actually having a diverse workforce. If your practice is overtime issues, don’t treat your exempt employees like cattle. If you work for unions, your staff should probably be unionized. As someone job searching, I would have a lot of respect for that.

      I’m with you, OP.

      Reply
    6. Mimmy

      I review grant proposals on a volunteer committee for my county human services department, of which homelessness and poverty are key priorities. One of the sections in the proposals relate to fiscal administration, and I’m ashamed to admit that I STILL don’t fully understand appropriate uses of funds – I’ve been doing this for 3 years and the fiscal aspects just aren’t sticking in my brain! But it is something we take seriously.

      Anyway – I too have heard about the outcry of “overhead”, and I never quite understood what that truly means. From my understanding, it’s employee salary & benefits and utility costs. Which are important. Our grants are “support” grants, so we expect our agencies to allocate the funds throughout multiple components, including overhead (personnel, office supplies, utilities, etc).

      I think what you and the OP are describing is, unfortunately, very common. Nonprofits are increasingly being asked to do more with less so it’s not entirely unavoidable, but I do think it can be better handled. I also hear the cries from my friends in the social work / human services / disability fields about poor pay. I’m not even remotely well-versed in finances so I don’t have all the answers, but I’m sure it’s possible.

      Reply
      1. Observer

        More easily said than done. Funders – and government agencies tend to be the worst offenders overall in my experience – have some fairly stringent requirements, and the don’t always make a lot of sense. But, vey often the insane decisions are directly tied to those requirements.

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      2. Florida

        Thank you for reviewing the grant proposals. I’ll try to explain overhead for you… on the 990 (tax form), there are three categories of funds: program, administrative, and fundraising. Overhead is usually admin+fundraising expenses divided by total expenses.

        It is very very malleable. Every organization does it differently. For example, you might think that the utilities are overhead. One organization will allocate all of its utilities to overhead. Another organization will say that half of the building is classrooms and the other half offices, so half of the utility bill as program expenses.

        I worked at a place where my job was to research donors and analyze data. I sat behind a computer all day. I was at a separate location from where the program was. But they counted half of my salary as programs because I was helping the front-line fundraisers who were raising money for programs. Based on that criteria, everything would be programs because it all goes back to programs somehow. This really was an inappropriate way to allocate it, but their percentage was important to them – more important than be honest and transparent.

        It really is a racket. People will tell you that you should have overhead that’s more than 10% or 25% or whatever percent they come up with. None of that is true. I was involved with a group that spent 100% of their money on fundraising for two years. (They were raising money to build a monument.) They didn’t spend much money, but the little they did spend was on fundraising. The next year, 100% was spent on programs because they built the monument. It makes perfect sense when you realize what they are trying to do, but their 990 made them look terrible.

        If you google Overhead Myth, you will find a lot of useful information and tons of opinions about it.

        Reply
        1. Not So NewReader

          This is a huge problem, you need money to raise money, if you are doing a project of any size. So you end up seeking donations to pay for fundraising. It’s mind-bending sometimes. Compounding matters many volunteer organizations are finding that certain positions have to be paid positions because that is the only way to get a person to show up on a regular basis.
          It’s not straightforward stuff, and it does cause headaches.

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    7. DeeCee

      I volunteer with a nonprofit animal rescue organization. I understand why nonprofits pay low wages. Honestly, there really just isn’t a lot of money. I know with my organization, money is always tight, so we rely on volunteers. If we had to pay staff and pay them WELL, honestly, our mission would end abruptly. I wish there were a better way to make nonprofits that truly do a lot of good work more profitable, but it seems that unless you are part of some huge national lobbying “nonprofit” like PETA or HSUS, good luck getting any real money on a consistent basis — furthermore, many of the grants we do apply to specifically exclude the grant being used to pay salaries. Even when grants allow that, the grant is of a limited duration and not something one can rely on to sustain a high paid employee for more than a few months.

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    8. Faith

      One thing that irks me beyond belief is when I see top execs being paid big bucks at bob-profits, while underpaying their staff.

      I used to get upset about overhead costs, but have moved beyond that. I now check the 990s for high salaries. If I see nothing very high, I’m ok with donating.

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      1. Anon for this

        The CEO of one nonprofit I worked for grew the org from a 30 person staff to 2000 people. He was a visionary, as well as being a strong manager and nuts-and-bolts guy. He made several hundred thousand dollars in a large east Coast City. (They paid reasonably well across the board, though that doesn’t show on a 990). He deserved every penny. Millions more who benefit? 1,970 new jobs under his leadership, doing strong and valuable work? The non-profit sector NEEDS more people like that. Needs people who can compete with the for-profit sector. Why are we so willing to pay the one who invents Hot Pockets or Bud-a-ritas millions of dollars but not the guy who has figured out a way to create lasting social change?

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        1. Not So NewReader

          I think the criticism goes both ways. People do notice and comment about over paid corporate execs and the pay disparity with the peons.

          But I think NPOs are held to an even higher standard because people believe there is a soul/moral compass involved there.
          People may not react when a big corporation is unethical or does illegal things, but they will go into total dismay when an NPO is caught. Their hope just got flushed down the drain. They hoped at least the NPO would be one of the “good guys”.
          We have that higher standard in a lot of things- we expect our politicians to be better people than we are, for example. But we still criticize each other, too.

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        2. LBK

          I agree completely. Arguably non-profit EDs deserve even more compensation than people in the for-profit sector because their work brings more value to society. I hate the idea that everyone working in non-profits should only be doing it out of the goodness of their heart; it’s the same BS as expecting creatives to work for free because they should just want to do it out of the love of their art.

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    9. Mando Diao

      People get really upset when too much of a non-profit’s money is spent on “overhead.” There’s a huge disconnect between the comments in this post and the ones on last week’s United Way one.

      Reply
  2. Ashley the Nonprofit Exec

    Ugh. I’m sorry, OP. I think that sometimes nonprofits feel that because their primary purpose is to serve their clients that they are exempt from needing to treat their employees well. As if their employees were half-employee half-volunteer – doing their work only out of the goodness of their heart and not just for a paycheck. This does terrible things to the non-profit field – it keeps good people from wanting to work in it, it can mean that only people with well-paid spouses can afford to do nonprofit work, it de-professionalizes the work of staff, promotes unhealthy and unsustainable martyrdom, and can severely limit diversity.

    Historically, non-profits in the US were set up by “ladies who lunch” – people with plenty of money, lost of spare time, a desire to help people who are “less than”, and a need for something to do. While this has changed, and nonprofits are focused on doing high-impact and not just feel-good work, there are still remnants of the idea that staff/volunteers give, clients take. In your case, and in many cases, it sounds like maybe your clients and staff aren’t that different than each other – that’s a good thing, but something that management needs to acknowledge. Push back on this – it’s possible they haven’t thought about the the way that you have.

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    1. KathyGeiss

      This insight has really made me think about how I (and many others) evaluate charities. I often look at charities that have low overhead so I can direct my dollars directly as possible to the actual cause. But I’m now realizing that one of the implications of that metric is that I may be directing my dollars to charities that offer questionable compensation to their staff.

      I think it’s probably still a worthwhile metric to ensure you’re not supporting charities with unnecessary large overheads but now I’ll add another metric- how are staff rewarded and treated.

      Thanks for making me consider this other angle.

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        1. BRR

          I’ve also heard is book uncharitable is good. This weird concept of investing in a business. Oh no money for me to attend a conference. Would have been nice for me to learn those new skills to improve our fundraising.

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      1. Florida

        Kathy, giving money to the actual cause is huge myth that nonprofits created and now have to live with. Here’s an example: We have two charities who are trying to eliminate a disease. Charity #1 buys the vaccine for $5 per dose. They give it to 1000 people, so they’ve spent $5000 on the actual cause. They spend an additional $5000 on overhead, so their overhead ratio is 50% (5000/10000).
        Charity #2 uses a different supplier, so they spend $10 per vaccine. It costs them $10,000 to vaccinate 1,000 people. They spend the same $5000 on overhead as Charity #1 did. Charity #2’s overhead ratio is 33% (5000/15000).
        The overhead ratio make #2 look better, but I think most of us would agree that #1 is actually better. The overhead ration is a complete red herring.
        Thank you for being open to realizing that there is more to charities than the overhead ratio. It is probably the least important aspect of a charity.

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        1. Nother Name

          I’ve never really paid attention to the overhead ratio – only when there have been the stories of egregious/illegal/unethical spending (these usually aren’t real charities). I really pay more attention to the mission, what the charity specifically does, and how effective their outcomes are.

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        2. Viktoria

          This is an interesting point. For an outsider who only has access to public information, do you have any suggestions for more useful metrics to use when evaluating a non-profit? Do you think that sites like Charity Navigator do a good job? (I seem to recall that Charity Navigator takes this metric into account along with several others to produce an overall “score.”) Although I only have a modest amount in my budget for donating to causes I believe in, I would like to at least be donating to the most effective and ethical organizations, to the extent it’s possible to evaluate that without launching a full-scale research project.

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          1. Green

            The IRS 990s are good but don’t tell the whole story. It can tell you whether overhead is big money for executive compensation or just overhead, whether it’s for fundraising, etc.

            It’s also important to remember that programming/overhead can overlap. If you are a medical charity and have several doctors on staff, they can be classified as both/either depending on their function and what they’re doing.

            Reply
          2. Amanda

            This isn’t so much a metric, but: give local. If you look specifically at charities in your community then you probably have better tools at hand to evaluate them. Do you see evidence of their work? Are they ignored or beloved in the community? Do they actually address issues that you see every day? And finally you can actually just call them and ask questions. I don’t think any half-decent development officer would be ticked that someone is doing due diligence before donating.

            Reply
            1. Artemesia

              This is what we do. There was a homeless outreach in my old town that did excellent hands on work; when we moved to new big city I sought out a similar organization and found one with a reputation of providing strong services for the homeless and we now make our big annual homeless donation to them. Same with food banks. We know people who are involved in the various local efforts and know that our money buys real services.

              Reply
          3. Florida

            I don’t think Charity Navigator or any of the watchdog sites do a good job. To give you an example, Yale University is a 3-star charity according to Charity Navigator. But any entity that measures schools based on the quality of education as opposed to the tax form, will rate Yale among the best.

            The problem with the watchdog charities is that they use one arbitrary document to measure charities. Imagine if I looked at your tax return and used that to judge everything about you. That’s what watchdog websites do. Also, they are trying to find a way to compare the homeless shelter to the ballet and the large hospital to the small advocacy group. The one common denominator among these groups is the ratios they can figure from the tax form, but that really isn’t a good measure.

            Really, the only good way I know of to decide if an organization is good is to get involved. Start off with what you are passionate about. Then decide if you want to give to a national organization or a local one like the local one, there are benefits to both. From there, you have to talk to the people who work there and the people who are served. Ask them about their successes. Any nonprofit can tell you a few good success stories, so you might have to dig a little deeper. Measure them based on how they compare to what their mission is. If the mission is to perform great orchestra concerts, then go to a concert and decide if they do that. If the mission is to end homeless, don’t let them tell you that they serve a million people a year. Ask them how many of the people who came there are no longer homeless because of the organization.

            Some organizations have a longer term goal. For example, an organization that is trying to find the cure to a disease might take more than one year to do that, but see if they are making progress. If they tell you their mission is to find a vaccine for a disease, but their success stories are all about providing service to people with the disease, that’s problematic. Yes, those people need help, but this organization is committed to creating a vaccine, so you want them to focus on that.

            Also, google the organization. If there are huge red flags, like scandals, that will probably come up. Then you can decide if it matters to you, or if it is even relevant anymore.

            Don’t send $10 to every organization in town. Pick 2-3 and give all of your money to them. It takes some work to do the research to find a good charity or two, but usually (not always) once you find a good one, you don’t have to research it for a few years. Also, they should be sending you information and keeping you informed. If they aren’t doing that (unless you specifically ask them not to), I’d worry.

            I wish I could tell you an easier answer, but it’s not an exact science. It’s like finding a good job or a good partner. It takes some work.

            I hope that helps.

            Reply
            1. Nola (from a Community Foundation)

              Check out Caroline Fiennes for a great read on donating for impact, and the overhead myth. I’ll leave an amazon link in a reply. I heard Caroline speak at a Community Foundations of Canada gathering, and she was excellent.

              Reply
          4. Ask a Manager Post author

            I actually co-authored a chapter in a book once about how philanthropists can assess whether a charity is well-managed. I’ll see if there’s any way to post it without violating the publisher’s copyright.

            Reply
                1. Ask a Manager Post author

                  Ooooh, it has terrible reviews! I just looked at them. How interesting. Well, I will just say that the chapter I co-authored (and that was the extent of my involvement) is direct, practical advice for philanthropists on how to assess charities they’re considering donating to. (Although it’s geared toward major, high-dollar donors, not normal donors.) I’m not sure what happened with the rest of the book, which I admittedly didn’t pay much attention to!

                2. BRR

                  Speaking as a fundraiser, many people don’t understand major gifts because they don’t fall into that category. I’m in prospect research and my parents still don’t know what I do and it’s hard for some to grasp that I’m not the person who calls during dinner.

          5. Florida

            Oh, and one more thing because you said you only have access to public information… you can ask the charity anything you want to know. They don’t have to tell you, but most of them will. If they don’t tell you, that might be a red flag. For example, let’s say it’s some sort of place that helps people who just got out of prison. They might not advertise their recidivism rate, but you can ask. If they don’t tell you, that might be a clue. It means either they are too embarrassed to tell you because it’s very high. Or they don’t know because they don’t keep track. That’s not good either. If they aren’t keeping track, how do they know if what they are doing is working?

            But definitely it is something you want to know, then ask. If they don’t answer, then you can decide if it is a deal breaker for you or not. Nonprofits are used to people asking them questions like that.

            Reply
          6. Viktoria

            Thanks to everyone who responded, you have provided some very helpful information and things to consider. I just started to poke around and revisit the organizations I’ve been donating to for the past few years, with some of these suggestions in mind. A couple are non-profits that I have other experience with (using their services or otherwise benefiting in some way), and another is a local group that I’m looking into more closely. So far I like what I see, but I’m going to try and be a little more thoughtful and take my time in the future… and pay more attention to the stuff they send me!

            Reply
            1. Florida

              One of the criteria that I use in my own giving is that if the organization says in their materials, “We are proud to say that x% of your donations goes directly to the cause,” or anything like that. I don’t donate to them regardless of how good they otherwise or how much I like the mission. I will not donate to organizations that perpetuate the overhead myth.

              That’s just something that I do because I feel so strongly about this overhead thing (as you can probably tell from my many comments.)

              Reply
      2. Anonathon

        Coming from the nonprofit fundraising side, I definitely think that’s a great metric to consider. Low overhead honestly can be deceiving. Sure, it may mean that the organization is super effective and high-impact. But it also could mean that they are prioritizing low overhead/payroll over hiring really great people — who may cost more, but will lead to much better organizational outcomes. Over-reliance on volunteers or constant turnover due to crummy compensation might mean lower overhead, but they don’t make for good results.

        In a nutshell, competitive non-profit salaries aren’t just good for the employee — they also are good for the organization as a whole. I’d also add that some nonprofits don’t do a great job categorizing their expenses and may, say, categorize program staff as “overhead” … even though they spend 99% of their time in the field. So digging deeper is great!

        Reply
        1. phedre

          Yes! As a nonprofit fundraiser (and a donor to other charities) I spend so much time educating donors about overhead. Do you want an agency that pays people nothing and attracts less-skilled/experienced people? Or do you want to pay people a good salary and staff your nonprofit with competent people who will advance your mission and actually make an impact?

          It drives me crazy that people think that we should work for free if we’re in the nonprofit field. I love what I do, but that won’t pay my rent!

          Reply
        2. BRR

          Also a fundraiser and agree with everything. In addition, better salaries will likely decrease turnover. Low overhead could also mean the organization is under resourced in the name of overhead. Sorry new computers would increase our overhead. No professional development, too much overhead.

          Reply
      3. WellnessChica

        I also think you have to take into account what they consider overhead. I was on a board once to raise money for the state breast cancer coalition the staff was 100% volunteer. When I saw our budget I almost puked. We spent $10,000 dollars on programs for a 5K. Sure they were pretty and high quality. Only about 20% of total funds raised went to overheard, but the program were counted as such. I mean, c’mon…$10,000 on programs??!??? I left the board and never looked back.

        Reply
        1. Ashley the Nonprofit Exec

          YES. Overhead does not mean “waste”. It does not mean “staff salaries”. Accounting-wise, expenses are divided into three categories: program, management/general, and fundraising. “Overhead” means management/general plus fundraising. There is a lot – a LOT – of room as far as how you split this stuff up.

          I am a big fan of the Girl Scouts – this isn’t meant to knock them. But their major fundraiser is cookie sales. Most councils count 100% of that expense as program, because the girls are learning from the experience of selling cookies – yep – they count zero as fundraising expense. That is, in fact, an acceptable way to do things.

          Executive salaries aren’t necessarily overhead. I spent about 50% of my time doing something program-related – supervising program people, planning for programs, having meetings about programs, etc. That’s not counted in our overhead. It’s counted as program.

          Staff salaries aren’t necessarily overhead. Because I work on human services, most of our salaries are, in fact, the service that we’re providing to clients. We don’t give clients money or food. We give them a human-to-human service. The time that those staff spend working with clients is neither management/general, nor is it fundraising. It’s program.

          Rent, the phone bill, the power, etc. isn’t necessarily overhead. If I rent a space to provide programming to clients, that’s program – it’s neither a management expense nor a fundraising expense. Now, the portion of the rent that is taken up by my fundraiser – that’s a fundraising expense.

          So – and overhead number may tell you more about the skills and ingenuity of the accountant, or the creativity of the PR team than it tells you anything at all about how money is spent.

          Reply
          1. Amy Farrah Fowler

            I was in Girl Scouts all through my childhood, and the other interesting thing is that the troops only get to keep ~$0.45/box of cookies (at least that was the number when I was a scout). Most of the money on cookie sales ends up at the council or higher levels. Of course, those levels are important for maintaining camps and things, but if you’re particularly interested in supporting scouts at the troop level, they do a fall fundraiser where they sell chocolate covered nuts and trail mix and stuff. A much larger percentage of that fundraiser actually goes to the troops.

            Reply
    2. Christina

      God, yes, the “out of the goodness of their heart” stuff drives me up the wall.

      I’m involved with a non-profit that approached me and asked if I’d be interested in coming on as, essentially, a consultant. I said I would love to (this non-profit is my area of passion, I want them to succeed, and try to do what I can to help them even before they approached me), but that I’d like to be paid (I’ve had bad experiences “donating” the skills I’m paid for at my day job). We agreed on a monthly rate for 6 months, all was fine for 3 months, then they said “Hey, we don’t have the money right now, can you wait a few months to be paid?” I naively agreed and 3 months after that, when I said “hey, when do you think you can pay me the rest of what we agreed?” it came back as “oh…we thought you understood that you were just volunteering for the last 3 months. Money is really tight, I don’t want to have to tell our full-time staff I can’t pay them.” When that was essentially what they were telling me. Argh. (I’m obviously still not over it.)

      Reply
      1. I'm a Little Teapot

        Wow, that is really dishonest. I hope you spread the word about it among anyone else who does freelance work in your area. (And possibly anyone who might otherwise want to be involved with this charity.)

        Reply
  3. Mike C.

    When your employer is doing unethical things, it’s your moral responsibility to make it known. If your “leadership” won’t do the right thing, tell the board. If they won’t do anything, tell the employees, and leak it to the local media or other places that are interested in covering these stories.

    I want to be clear here, you want to work with internal channels first, as AaM suggests. Maybe someone wasn’t thinking or needs to reminded what the whole point of the organization is. Then escalate if it doesn’t work.

    Yeah, I’m going to take a hard line on this because it’s clearly immoral and unethical behavior and you can either help it continue or help it stop.

    Reply
    1. LadyMountaineer

      Yeah but is this the hill the OP wants to die on? It’s easy to take a hard line when it’s not your paycheck and professional reputation on the line.

      Reply
      1. Not an IT Guy

        This. I know my company has a very detailed ethics outline which we’re re-trained on every year. Despite the fact that they claim they won’t retaliate if a violation is reported in good faith, it clearly states that nothing in the outline changes the at-will employment relationship. I don’t know about anyone else, but I know I’d have a tough time explaining to the next employer “I was fired for doing the right thing and reporting unethical behavior”.

        Reply
      2. neverjaunty

        Or, alternatively, will dying on this hill actually work? OP is not a policy-maker; she’s the messenger.

        Pushing back might work. Leaving the organization is absolutely a good idea, because even if they back off, who wants to work for hypocritical glassbowls like this?

        Reply
        1. Mike C.

          I don’t think standing by without even trying is an ethical option. If you want to leave fine, but to do nothing else (many of these options of anonymous!), well, you might as well be helping it along.

          Reply
          1. neverjaunty

            It sounds like OP may have already done that, but I was trying to distinguish between OP saying ‘hey, this is a problem’ vs. ‘I will not tell the employees that/I will tell the employees this is wrong’.

            Reply
      3. Jady

        When it comes to leaking it to the media, there’s the anonymous option.

        When it comes to the employees… well, she said herself she has to tell the employees-in-question. That’s how the entire issue started. Unless they are signing a legal document, they have the option to talk about it. Once it’s 3+ people, you can’t pin it on the OP.

        Reply
        1. Chinook

          I agree that leaking to the media unethical behaviour is always an option. I work for an integrity program to make sure our pipe doesn’t leak and I know have a dozen people in my department who have said that we would leak to the media any cutbacks that put our pipe at risk. We care too much about what we do and possible bad effects to not see that as an option.

          Reply
      4. BananaPants

        Yes, we have a clear non-retaliation policy as part of our ethics program – but that doesn’t change the fact that they can still fire just about anyone at any time for any reason they can cook up. It’s hard to make a legal-but-unethical act your hill to die on when you need a paycheck AND when having a reputation as a whistleblower can affect your ability to find a new job.

        Reply
      5. Mike C.

        If you aren’t going to act in an ethical manner, then what is the point?

        And yes, I’ve stuck my neck out before, so this isn’t some internet bluster on my part.

        Reply
    2. LBK

      I’ve always had mixed feelings about the “name and shame” strategy and I think I was just finally able to identify why: because it permanently tags good people like the OP as being associated with a shady company, whether they had anything to do with the unethical choices the company was making or not.

      In an ideal world, only the specific people identified as being involved with the scandal would get the associated bad reputation. Realistically, though, I think if there’s a well-known scandal at ABC Teapots and someone sees that company name on the OP’s resume, there’s immediately going to be some question about the OP’s morality and credibility. I’m hesitant to trade off condemning the people at the top of the organization for potentially damaging the reputation of those at the bottom.

      Reply
  4. Ad Astra

    This is something that would cause me to look for a new job, supposing I had that option. Nonprofit employees live in the very communities they serve. Either this organization is serious about improving financial stability in it community or it isn’t. And besides being hypocritical, this decision is short sighted: Happier, healthier, more stable employees are far more likely to perform to the best of their ability, which could translate into increased fundraising or better coordinating or whatever it is these people do to make the organization successful.

    Honestly, I’m surprised this is legal.

    Reply
    1. Mike C.

      I thought there was something in the law saying in effect that if a class of employees are offered a benefit it had to be offered to all members of that class – so if all full time employees are given PTO, and full time employees are defined by working N hours/week then if you’re working those hours you can’t be denied those benefits.

      I’m sure I’m misremembering, but is any of this true to any extent?

      Reply
      1. fposte

        I don’t think the feds have ever cared, so long as there’s no illegal classification or illegal discrimination. Maybe there’s a state thing in one of the usual suspects.

        Reply
      2. AnotherAlison

        I am not familiar with “per diem” employment personally. It seems most common in nursing, so I googled that, and found a data point of 1 that per diem nurses were not eligible for *any* health, dental, life insurance benefits or PTO.

        I feel like the OP’s question really hinges on whether the per diem employees are improperly classified. If they get a call every day to come in, they accept, and they truly work over 40 hrs every week, are they mis-classified? It seems they would still be per diem if they worked 40+ hours per week if they were a floater who didn’t report to one specific manager or always work in the same functional position/department.

        I agree NPs should pay fairly, etc., but I am withholding my outrage until I see the letter from the per diem employee. Some people like the flexibility of per diem work, and consider the trade off for not having benefits worthwhile. I do think this situation is a little suspect because they were told they had to provide health insurance, though.

        Reply
        1. A Teacher

          Not always, my dad works “PRN” or as needed (like per diem) in healthcare and he’s totally eligible for health insurance and gets paid time off, a 403 match, etc… my sister is the same as a nurse if she goes to PRN at her current place of employment. It depends on employer–they both work for decent sized hospitals in urban environments.

          Reply
        2. doreen

          My daughter is not a nurse, but she had a similarly structured job. She wasn’t actually a per diem – she was an in-house temp. Depending on which assignments she chose to apply for and which she was hired for , she might have been able to work full time for an extended period of time- or maybe not. There was no requirement that she apply for a new assignment before the current one ended, and unlike a actual full-time employee with a permanent assignment , she could take weeks or months off (unpaid) without anyone’s approval by simply not applying for assignments during that time.

          Reply
      3. MaryMary

        Not really. Employers generally keep benefits the same by employee classification, but they don’t have to. It’s similar to how employers some employers avoid managing performance for anyone in a protected class. You can fire someone in a protected class, you just need to be little more careful to make sure you’ve properly documented everything and are following the law. Employers can vary benefits by class or within a class, but there are a few additional hoops to jump through to make sure it’s legal (and legal does not always equal fair).

        The bigger question is if these employees should really be per diem. Maybe they should be: they have irregular work schedule and happen to have worked a lot of hours over the past year, but it’s difficult to predict if they will continue to work a near full time schedule. On the other hand, if they consistently work a full time or near full time schedule, they are probably not per diem employees.

        Reply
      4. Natalie

        There were some court cases related to permatemps, but they were apparently based on state or local laws, not federal. One of the suits was against Microsoft so probably big news in your area.

        Reply
    2. neverjaunty

      I would not assume it is legal just because the director said “it’s legal”. I mean, maybe it is, and they checked that with a knowledgeable attorney. Or maybe they looked it up on the internet and thought it fit the definition of ‘what is legal’. Or maybe they just decided on their own it’s not illegal because reasons.

      Even if it is, though, “yeah but it’s not ILLEGAL” is a crappy justification for something unethical.

      Reply
      1. Mindi Lahiri

        Yes, OP, I would recommend checking with your company’s insurance broker to verify what your boss wants to do is truly legal. I would be concerned that treating those employees incorrectly could open the company to some risk (in addition to just being unethical and a crappy thing to do in general). Please update us on how this turns out!

        Reply
  5. Snarkus Aurelius

    This is going to sound totally cynical, but I’m not surprised.  Dear Prudie had a letter once about a boss who terrorized her employees, and they all worked at a charity.  After the charity name and CEO were doxed, I later saw some research about how charities often attract bullies, cheapskates and/or other people who make life difficult for those who are struggling because most people wouldn’t suspect such behavior coming out of an organization.

    When I worked at a charity during the recession, we were all under a pay and hiring freeze.  But the CEO happily gave herself raises (that amounted to $150,000 over a four year period) and never tracked her vacation days because she was “working” while she was in France.  I’m sure she didn’t lose sleep over how much her staff was struggling.

    AAM’s advice is really good, especially the part about being transparent and clear.  Employers often underestimate the need to be transparent in their decisions, I assume, because they have access to that transparency so in their brains, they don’t consider it.  But if you’re not transparent, you open yourself up to a lot of trouble, namely accusations of discrimination and unethical behavior.

    Okay so your boss said it’s not illegal.  Is that the only reason?  You may want to remind her that other organizations, Operation Smile comes to mind, have been outed for a lot less and snarked by publications such as Gawker and Mother Jones whose mission is out employers who pull shady stuff like this.

    (I’d know.  I’ve leaked to them on a couple of occasions.)

    Reply
    1. Florida

      Do you happen to remember where you saw that research? I would love to read it. My personal experience says that it’s probably accurate, but it’s interesting that there is real research on it.

      Reply
    2. fposte

      I think it’s satisfying to see those pieces, but I don’t think they have much impact–Operation Smile seems pretty unfazed by the Gawker thing. And this is a particularly arcane injustice that’s going to be hard to storytell, so I think publicity isn’t much of a weapon here.

      Reply
      1. Florida

        I think the local media has an impact. When the Breaking News van shows up at the nonprofit, that matters. If the organization receive local government money (which most homeless/poverty groups do), then the reporter asks the mayor how they feel about spending money on a unethical business. It starts to matter.

        I can hear the commercial now: “Channel X investigative reporters found that YOUR tax dollars are being spent to pay a poverty organization that actually CREATES poverty, instead of eliminating it. Join us at 6:00 for the full story.”

        Reply
        1. fposte

          I don’t know that it does unless it affects the money, though. And I can’t see any of my local news channels running that promo–it’s not sexy, and it’s asking the viewer to support paying them more money, which doesn’t generally get people excited. Especially because quite a few of those viewers will be making the same or less money and will be wondering why this is news at this org when it’s not at Home Depot.

          Don’t get me wrong–I think this is an unjust thing. But I don’t think it’s going to be something you can get enough public indignation about to make a difference in a country where people with considerable power are still arguing that you should be able to live off of $7.25 an hour.

          Reply
          1. neverjaunty

            You certainly don’t get any public indignation at all by being quiet and saying nothing.

            Sometimes it doesn’t work and nobody cares. Sometimes it does, because SlimeCharity just happens to be petitioning the state for more money, or is relying on annual grants, or is about to partner with BigCorp. And then maybe somebody decides they don’t really want to associate with SlimeCharity. Or CompetingCharity, which would really love to get that grant, uses the disclosure to make hay.

            Reply
            1. Ask a Manager Post author

              That’s true, but it’s also worth injecting a dose of realism into discussions about this kind of thing. People sometimes tend to assume it’s easy to get the media interested in topic X, and their sense of that isn’t always well calibrated.

              Reply
                1. Florida

                  If OP wants to alert the media, and she is a current employee, I would recommend a phone call rather than an email. I wouldn’t even send an email from my personal email. Most reporters will protect their sources, but I’ve had a bad experience once (it didn’t involve my job, though).

              1. neverjaunty

                Oh, absolutely. I don’t think it’s a good idea to assume that every media outlet will be as filled with righteous outrage about [X] as you are, but wanted to push back against the ‘meh, don’t even bother, nobody cares in this bleak and uncaring universe’ thing. And it’s also possible to be a little more strategic about the who and when. Gawker probably doesn’t care about your local charity, but the city newspaper guy who is sick of reporting on garden club meetings might well.

                Reply
              2. Ad Astra

                I frequently see people saying “WHAT IF THE MEDIA FOUND OUT?!” about things that most general interest publications wouldn’t care about at all.

                Reply
              3. Ashley the Nonprofit Exec

                Yes. I fired an employee years ago who swore she was going to call the paper about x and y injustice she perceived. I slept well and did not give it another thought. Newspapers aren’t generally in the business of buying into any and all indignation. It’s got to be strong, publicly relevant, and easily proved.

                Reply
                1. Lindsay J

                  Current coworker says she is going to call in “the congress” if she gets written up, because she’s a veteran and she should be treated better than that. It took all I had not to roll my eyes. Pretty sure lawmakers have more important things to deal with than a low level employee getting written up for poor job performance, whether she is a veteran or not.

                  Also reminds me of the people who I encountered at retail jobs who claimed they were going to sue for one reason or another. One job gave me permission to tell them to go right ahead. Another job told me that at that point I was free to tell them that I was no longer authorized to discuss the pending legal case and any further communication about the matter had to go through the corporate attorney.

            2. fposte

              I’m not arguing against the attempt. I just don’t think it’s a reliable corrective (and I think if anything *were* a reliable corrective, this stuff wouldn’t need correcting so much), and that there’s an economy of effort involved that should be considered as well.

              Reply
          2. Florida

            The local media here (big city) covered the organization that is paying $12 but protesting for $15, and it didn’t even involve tax dollars. Part of it that you have to package it for the news people. Sometimes you have to spell out exactly why it is important, even if it seems very obvious to you.

            The other issue, which is the biggest factor, is that is depends what else is going on. If they had been driving to the protest and someone push another person in front of a train, well, the protest wouldn’t have gotten covered. They would have been rerouted to the train accident. There is no way to control or even predict that.

            Reply
            1. Ad Astra

              Also, generally speaking, it is very hard for journalists to get something published with anonymous sources. So you’ll either have to let them attach your name to this information, or you’ll have to connect them with people who will speak on the record. And/or point them toward the documents they’ll need to file a FOIA for.

              And yes, all newsworthiness is relative, so it depends very heavily on what else is happening in that community.

              That said, if you have an idea for a news story, it never hurts to pass info along to a journalist. Just don’t expect them to take every piece of information and run with it; not everything that interests you is a good news story.

              Reply
    3. Artemesia

      I knew a director of a non-profit — not the top person, but director of a division in one state, who had a pool of money to give merit raises every year to her staff. She gave herself the entire pool each year for 3 years because ‘I am doing all the important work’ until finally someone at the central office noticed and put a stop to it.

      Reply
  6. Florida

    This sucks. There is an organization in my city that is always protesting that McDonald’s, theme parks, and similar places should be paying their employees $15 per hour. Meanwhile, this organization is paying their employees $12 an hour. The media did story on it and made the organization seem like a joke that exists only for the benefit of the people who work there.

    Reply
    1. Snarkus Aurelius

      Same thing happened in the White House. Obama pushed a higher wage for fast food workers, and in about two seconds, media outlets jumped on him because the White House doesn’t pay interns.

      (This isn’t a politcal post. Just pointing out what happened.)

      Reply
      1. Nother Name

        While I support paying interns, I think it’s probably true that a WH intern is getting a lot of benefits that a McD worker could never dream of… People should still be paid for their work, though.

        Reply
        1. Snarkus Aurelius

          And that’s the problem. When you don’t pay, only a certain subset of people will be able to do that internship, and the cycle perpetuates itself.

          That and it’s totally illegal.

          Reply
          1. Development professional

            Yes. Unpaid internships may offer tons of advantages in terms of experience and cache, but they perpetuate the cycle of privilege in a big way.

            Reply
            1. Nother Name

              Unpaid interns are the last gasp of the Ladies who Lunch. Unfortunately, no one with the authority wants to take it off life support.

              Reply
              1. OwnedByTheCat (formerly Anony-Moose)

                I love this, and even if they’re paid they can still be unfeasible if you have to support yourself. I turned down an Americorp position after college because a) the stipend was $14K a year but b) I’d need to buy a car and c) you were not allowed to work any other job. My student loans would not have let me live on $14K a year. I was bummed.

                Reply
                1. Meg Murry

                  If I’m not mistaken, Americorp service allows you to pause your loans (I think it’s called forbearance) – at least federal loans. It’s the same kind of program that also gives you forbearance if you go back to school full time. Your interest may or may not keep accruing, depending on the terms of the loan, but you don’t have to pay. And most Americorp positions also offer X dollars in education benefits at the end of the service, that can either be applied to an applicable college, or paid toward existing loans. It’s not a large sum of money, but it’s something. Overall though, I would agree that most people that do Americorp wind up just barely breaking even, if not losing money because they have to do things like either pay to move a bunch of stuff across the country at the beginning and end of the service time or they have to pay more to rent a furnished apartment or find an apartment last minute.

                  Private loans, however, may not have to allow you the forbearance, and may or may not qualify for the educational benefit.

          2. neverjaunty

            Unpaid internships aren’t illegal when they are actual internships, and not “do the job of clerical staff for free”. But yes, they should be paid. They exist in DC because there are plenty of privileged, wealthy families who can support their kids taking these internships.

            Reply
            1. WorkHardForTheMoney

              Ummm………unpaid internships exist in all parts of the country, not just DC or the privileged areas. I had one in college in a tiny town that is too poor to sustain a Wal-Mart or a McDs. No where near DC. I did my 40 hour a week internship and waited tables 5 nights a week so I could still get a paycheck to pay for my apartment/gas/living expenses/school needs because my parents could not.

              Reply
              1. neverjaunty

                Sure. I was referring to the comment about White House internships. That doesn’t mean the practice is OK by any means, but nobody really challenges it because there are plenty of well-off folks willing not to make a peep about the fact that it’s unpaid.

                Reply
            2. Stephanie

              To be fair, I knew plenty of regular middle class people working unpaid internships. Not to say I don’t think the system’s gross, but not everyone there was necessarily the child of a BigLaw partner.

              Reply
              1. Ad Astra

                The worst offender, imo, is student-teacher programs. They’re required for graduation AND licensure, so only students who can afford to work 60 hours a week for free can be teachers. There are several programs designed to attract people of color and other nontraditional candidates to teaching, but I feel like nobody’s stopped to examine the huge barrier to entry posed by the standard path.

                My husband was in a program that did two semesters of student teaching (and one semester he was in a district 25 miles away — WITH A TOLL). That was a very hungry year.

                Reply
                1. Amy Farrah Fowler

                  Yeah, I get why you need classroom experience, but student teaching was a serious struggle that I would not have been able to manage without help from my (very kind) parents. The program that I did gave an option of doing an “internship” in lieu of student teaching where you would be a full time paid teacher, but would have to have a mentor work with you and stuff. I tried to go that route, but it proved impossible to find a school district willing to pay me to teach when there were PLENTY of already certified teachers out there, so I had to suck it up and do the student teaching.

          3. Former Museum Professional

            The same thing can be said for a lot of non-profit jobs. When you pay people such low salaries, you’re saying that you either expect your employees to live on such shameful wages, probably near poverty level OR that they will be married to someone who can provide a better income and health insurance. And god forbid you throw kids into the mix. I paid OOP for my kid’s health insurance at my last non-profit while money was frittered away left and right on ridiculous “consultant fees.” It was enough to sour me on the field almost entirely.

            Reply
            1. Dan

              Keep in mind though that “non profit” isn’t really a field. The NFL, higher ed, and some government services work are all non-profit, and can’t be painted with the same broad “non profit” brush that one may paint advocacy organizations with.

              Reply
        2. Little Teapot

          That’s a big part of the problem – why should we pay when we pay in *experience*?!

          Same issue with a lot of online news sources – why would we pay our writers when consider all the *exposure* you’ll get from being on our site!

          Reply
      2. 2 Cents

        I also find it interesting that “fast food worker” is what everyone’s concentrating on when ANYONE making less than $10-$15/hour is at risk — think full-time supermarket employees, FT retail employees and similar. Why does fast food get the attention but nothing else?

        Reply
        1. Kelly L.

          Because people look down on fast food workers more. “Flipping burgers” is mentioned to kids growing up as if it’s a fate worse than death–my dad didn’t lecture me that I’d “end up folding shirts if I didn’t get my grades up.” And the stereotypical fast food worker is always some awkward teenage kid who doesn’t really care and isn’t really smart. I’m not saying this is right–it’s not. It’s horrible. But it’s a prejudice people have. So people resist raising wages for fast food workers because they figure the money is going to a none-too-bright kid who just wants beer money.

          Whereas I think the “stereotypical supermarket worker” or “stereotypical retail worker” that would pop into most people’s minds is maybe older and more competent.

          Reply
          1. Nother Name

            Fast food workers are more likely to be working in poorer communities, too, where there aren’t that many other options for gainful employment. And speaking as someone who’s done both, there are in general more perks for retail workers, with fewer safety concerns. Everyone should be paid a living wage, though.

            Reply
          2. Three Thousand

            Some people take this prejudice further and mistakenly believe that a minimum wage increase would *only* affect fast food workers. Thus the “why should burger flippers make $15 while EMTs only make $12?” Facebook screeds.

            Reply
            1. Kelly L.

              Right? Like…if $15 was the minimum, then the EMTs would be making at least $15 themselves, and possibly more if they got raises to increase the appeal of the field over other options.

              Reply
              1. Lindsay J

                This, exactly. I have tired of fighting about it on Facebook.

                A minimum wage increase would push minimum wage up across the board. So at least $15 for everyone.

                And then, just as EMTs (or whatever other profession, because I have heard others as well) currently make above minimum wage, in order to attract people with the level of certification, proficiency, etc and compensate for the working conditions and level of danger they put themselves in, companies would have to raise the wage they are paying to above $15.

                It just boggles my mind when people that make the minimum or close to it are against minimum wage increases. A girl that is a store manager at a company I left, making $10 plus maybe another $1 an hour in commissions a month, and who is unmarried with a child, posted how she didn’t think the minimum wage should be increased and if fast food workers wanted more than minimum wage they needed to work hard just like she had. I just wanted to be like “wtf, if they minimum wage increases to $15, you will be getting a raise, too”.

                And don’t get me started on the ethics of paying a store manager $10 an hour. It is a small store, but still. Low pay rate, and the refusal of the owners to acknowledge that what they paid were not livable wages, are the reasons I left as well as several others in the company. The owners didn’t seem to care. We were expected to have a $100 or better average sale (taking and selling photos), and complete one sale every 45 minutes during peak season. And I got paid $8 plus “commission”. (I never saw commission sales come to more than $200 for even the top seller in the whole company in any month, mine were generally between $50 and $100).

                Reply
            2. LBK

              I hate that reaction because it also pushes things in the wrong direction. That should be an argument for EMTs also getting paid more, not for everyone to keep making less than a living wage.

              Reply
            3. Stephanie

              I hate those posts. I usually see it with regard to low enlisted military salaries. C’mon, a rising tide lifts all ships.

              Reply
              1. Kelly L.

                And that’s rarely actually coming from someone in the military, just from someone who thinks the military is a trump card in every argument.

                Reply
                1. Ad Astra

                  I have never once heard someone in the military complain about compensation, but I see endless rants about military pay coming from people who kinda know someone who’s in the reserves or something. Most military jobs are so different from civilian jobs that you can’t make any kind of meaningful comparison anyway.

                2. VintageLydia USA

                  I have a friend who’s husband is in the military and supports a family of four, including one son with special needs, mentioned that they’ve needed WIC in the past. He wasn’t newly enlisted, either. But it’s only brought up in relevant discussions, not just thrown out there willy nilly.

              2. BananaPants

                My brother’s in the military. Yes, he often works long hours but the only time he hasn’t been making at least the equivalent of minimum wage on an hourly basis was when he was deployed overseas in a combat zone and one could maybe argue he was working 24/7. His base pay, BAH, BAS, sea pay, and having free medical care and the TSP make for what is overall a pretty reasonable compensation package – especially compared to the private sector.

                Reply
              3. Dan

                A rising tide lifting all ships raises inflation too. As the cost of goods goes up, that living wage no longer has the buying power that it used to, meaning it has to be increased. And the cycle starts all over again. So I’m not even sure that a living wage is possible in the long run.

                Reply
                1. Three Thousand

                  A large part of the problem is having a small percentage of wealthy people be able to drive up the cost of food and housing because money is no object to them whatsoever. Raising the minimum wage in itself is probably an overly simplistic way to try to reduce the wealth gap (like trying to give everyone a free college education when a large part of the purpose of a college education is to serve as a barrier to entry for a limited number of white collar jobs).

                2. Dan

                  @3K

                  I’m not sure wealthy people are a “large part” of the problem. They simply don’t spend their money on the things that I do. They aren’t competing for my run-of-the-mill suburban apartment that was built in 1970, and they aren’t even competing with me for an entry level condo. The ones where money is no object are buying luxury penthouse condos, large mansions, and private jets.

                3. Kelly L.

                  But they’re competing with you for milk, bread, meat, gasoline, and wanting to buy the land your entry level condo is on so they can tear it down and build a luxury one.

                4. I'm a Little Teapot

                  @KellyL – oh, that describes my area so very well. And a lot of it us just a speculative bubble – a lot of the luxury units end up sitting empty.

                  I wish my city would declare a moratorium on luxury construction until some (high) set number of affordable units were built.

                  As for the minimum wage/inflation problem: there should be a legal limit to the ratio of the highest pay to the lowest pay in any organization. That way, you couldn’t raise executive pay without raising the pay of the lowest-paid workers. Returning to the steeply progressive taxation of the 1950s would also be a good way to narrow the wealth gap.

                5. Dan

                  @KelleyL

                  The assertion was that a small percentage of wealthy people “drive up the cost of food and housing because money is no object to them whatsoever”. I can’t believe that grocery store food prices are what they are because a “small percentage” of wealthy people are throwing around money like it’s no object. Are high end restaurants priced at levels beyond my budget because rich people eat there? No doubt.

                  As for housing, one doesn’t build “a” luxury condo, one builds many of them in a building. I live in a high COL area, where they really are building luxury condos and what not at quite a clip. But these units aren’t being sold to people to whom money is no object. Those people simply don’t buy entry level condos in a luxury building. Those people are buying the penthouses and what not.

                  DC has a lot of wealth, but I don’t think it’s quite as skewed as it is in the Bay Area or Manhattan. Housing prices here are what they are because a lot of people have enough money to drive them up and are willing to pay it. They aren’t what they are because a select few people have enough cash to throw around like it’s no object.

            4. doreen

              Sometimes it’s true, though. In September, NY announced an increase in the minimum wage for fast food workers only (somehow, the governor was able to do this even thought the legislature was opposed to a smaller increase in the minimum for everyone) . It’s true that this will most likely push wages up in other minimum wage jobs – if people prefer to work at McD’s for $15 rather than at TJ Maxx for $9, then TJ Maxx might have to increase what they pay. But they might not- or they might not need to raise it all the way to $15. Maybe people will accept $12 or $13 to work someplace where they won’t smell like grease at the end of their shift. And that will be perfectly legal.

              Yesterday , the governor announced a new $15/hr minimum wage for state employees- because around $10,000 of them currently earn less than that. That most likely won’t affect anyone aside from other state workers. It’s possible that raising the minimums for these two groups will persuade the legislature to raise it for everyone, but it won’t be quick.

              Reply
      3. Not me

        The same thing happened with Hillary Clinton and unpaid interns IIRC (maybe someone else who’s running or tried recently?). I could argue that working for the White House or a presidential candidate is a huge benefit on its own, but unpaid internships mean that this benefit only goes to people who can afford to do it.

        Reply
      4. Merry and Bright

        Reminds me of something that happened in the UK parliament! When the government at the time brought in the first National Minimum Wage, some of Parliament’s own staff got a pay rise…

        Reply
      5. Artemesia

        Like being a White House intern is not a sought out path to future glory? Interns are not staff; they are almost always more trouble than they are worth; the benefits to someone interning for the WH are huge. Where companies use internships to staff their programs, they need to be paying minimum wage at least but a one semester internship that is an actual internship? I am not going to lose sleep over that one.

        Reply
      6. NKW

        I spent a summer as an intern at a conservative nonprofit that paid us minimum wage. One day they sat us all down, had one of their economists come give us a talk about the ways that minimum wage increases can be drivers of unemployment, and then told us that it had gone up so we were all making an extra $.25/hr. I don’t think our reaction was all they hoped.

        Reply
        1. A grad student

          What a missed opportunity for a ‘Survivor’ type lesson- “we can no longer afford to pay all of you, so you must decide among yourselves who we should let go. You will have three challenges in one hour to help you decide.”

          Reply
  7. grasshopper

    Nonprofits are often held to a much higher standard of accountability than any private company. I don’t agree with what the organization is doing, but I wonder if this decision has anything to do with funding and donations. Many donors and grants insist 100% of their donation go directly to ‘the cause’ and not overhead. But people and their salaries are the biggest overhead. Since this human overhead salary cost isn’t considered to be part of ‘the cause’ non profit salaries are often skewed low in order to keep the dreaded ‘administration and overhead’ costs as low as possible to satisfy donors. The right solution isn’t to not pay staff, but to educate funders and donors about the impact of the organization’s work, your fiscal responsibility and the necessity of having good administration.

    Reply
      1. PontoonPirate

        Don’t conflate fundraisers working hard to raise support for critical missions with administration staff who make unethical policy decisions.

        Reply
        1. Anonathon

          +1. I’d love to educate donors about just that, but there is no way I can accomplish that on my own. They’d just fund someone else.

          (That said, I’ve also worked with foundations who are open to funding overhead, indirect costs, etc. They do exist!)

          Reply
        2. OwnedByTheCat (formerly Anony-Moose)

          +1,000. I’ve voiced when I think decisions are unethical, or even go against what I’m comfortable with, but I’m super far down the food chain. I’ve left two organizations because of it: the first paid the staff so little and asked so much that people were having breakdowns from burnout, and the second raised red flags around some elements of the programs. I’m sure (sadly) that it won’t be the last time it happens…

          Reply
          1. Dan

            I’m glad you left that lousy situation. When it comes to wages and working conditions, I’m a big fan of the “free market.” It’s not employers that set wages, it’s the “market” — both the labor and the employer. Jobs pay what they do because employers believe that’s what it takes to get a qualified person to come on board and stay for a reasonable period of time.

            Part of the free market functioning correctly are people walking away from lousy situations. It’s the only way to tell employers that working for them sucks.

            Reply
            1. Tara R.

              And that is exactly how the free market screws over society’s most vulnerable, because they can’t walk away from lousy situations.

              Reply
            2. Lindsay J

              But what if you don’t have another place to walk to? The economy is (slowly) getting better, but there are still people who are unemployed and not by choice. And there are still more people lining up to apply at McDonalds than there are possible positions.

              A lousy job is better than no job.

              Also affecting things are that companies are willing to cut staff, cut corners, and do without. My current job has a terrible attrition rate and has a hard time hiring new candidates. Have the powers-that-be raised the wages to keep their current employees or attract new ones? Nope. They just expect 7 people to do the work of 8 or even 5 people to do the work of 8.

              Most of us are looking (and I’m – hopefully- leaving) but then my coworkers will just be stuck doing more work until they find another sucker to replace me that figures that this is better than their last job or better than unemployment.

              Reply
      2. grasshopper

        Good fundraisers and good organizations already do this. The thing is that many donors don’t trust the fundraisers because they view it is a conflict of interest – they are a representative of the charity and it is seen as justifying their own salary. The fact that you assume that fundraisers are unethical demonstrates this.

        There are some third party verification and certifications for charities (http://overheadmyth.com/) and these are moving away from using overhead as a measurement, but it is still seen as an indicator. Also, there is no easy formula to calculate the impact of a charity since it can take years for some impacts to be seen and it is difficult to compare across organizations with different mandates. This sort of information is more in depth than many people’s attention spans so a simple percentage is easier.

        Reply
      3. Development professional

        Easy to say, and exceptionally difficult to do, especially with institutional donors. Foundations don’t have restrictions on overhead percentages because the fundraisers just forgot to tell them what overhead is good for. They have longstanding policies that program officers are not empowered to override.

        That said, the tide is starting to turn on this – have a look at some of the recent announcements by the Ford Foundation and others who are going to start prioritizing unrestricted grants (i.e. grants that can fund as much overhead as you need) for the first time in decades. But it’s a slow process for this to trickle down across the sector.

        Reply
    1. Lizzy

      Funders are not blind to this issue and many simply don’t care to be part of the solution. I am currently doing a contract job at a major foundation who recently revamped its competitive grants program so that they could provide more general operating support grants to their grantees. They also want to loosen the restrictions on guidelines so more organizations qualify for grants. So far this decision has been positively received in the major metropolitan area this foundation covers, especially since there have been accusations that many of the other foundations in the city are very elitist and exclusive. As someone who just got out of a grant writing position, I can tell you these foundations expect you to come up with these “innovative” programs/projects with a dedicated staff who doesn’t mind being paid little to nothing. Thankfully, this foundation is arguably the most prestigious one in my city and leadership has been very public and transparent about this initiative; hopefully this creates send a powerful message to the other majors funders in the community.

      That being said, I do think this issue goes beyond incoming support only going to “the cause.” I process a lot of grant recommendations and donations from the donor advised funds that this foundation also manages–separate from its competitive grants program–and the majority do go towards general operating support and just allowing organizations to stay afloat.

      In my experience, this is often a leadership/management issue and what they are doing with overhead/general operating funds. The last org I worked for spent a lot of money on board and leadership development, which included fancy catered lunches or lavish dinners. A good chunk of general operating support went towards this, as well as entertaining prospective donors or prospective new board members. And the kicker is these meetings often ended up with decisions about an employee’s status (i.e. “Unfortunately, we just cannot make Sansa full-time this upcoming fiscal year.”).

      Of course, I am not saying all organizations do exactly this, but I do think many organizations have issues prioritizing how to allocate their overheads costs, which can lead to employees getting low balled with salary or getting denied full-time status.

      Reply
  8. Jamie

    I don’t know where you live, but I would strongly encourage you to probe your network for a financial advisor who works with non profits in setting up benefits for them. Your organization may have someone they already work with, but it never hurts to have a second set of eyes come in and see if they can save you money on healthcare costs, group benefits, retirement plans, etc…

    It does not solve the problem of the higher ups being unethical in general, but maybe it would temporarily solve the issue if you can present them with a way to free up the funds for those employees.

    Reply
  9. AndersonDarling

    Something else to remember, even if the employee coding is legal, it sounds technically complicated. And if I was an employee that was told I wasn’t going to receive all the benefits I think I’m entitled to, I would call an attorney.
    Even if you are in the right, a legal challenge is expensive and time consuming. I doubt the little savings from PTO would be worth it.

    Reply
    1. Naomi

      I don’t think this is likely to happen–it sounds like the employees who are getting the short end of the stick probably don’t have the money for a legal battle, even if they were willing to risk it. Which makes this even worse, because the company is getting away with it by shafting people who aren’t in a position to stand up for themselves.

      Reply
  10. BethRA

    OP may or may not have taken this into consideration in thinking about whether or not this is legal, but just wanted to point out that incorrectly categorizing staff as “per diem” when they should be full-time may run afoul of other state and federal labor and tax laws and not just ACA regulations.

    Reply
  11. Katie Pi

    Thank you for thinking like this and for wanting the best for your employees! It’s because of this non-profit scrimp-and-save-at-the-employees’-expense mentality that I left the non-profit world after 5 years. The board, who are so far removed from the day-to-day office and staff life, are often so stringent and see personnel as the easiest place to cut back. They completely fail to see human resource as a limited resource. If you fail to reward workers properly, they’ll go where someone does.

    I wish I’d had an HR person at the non-profit where I worked, advocating for our staff. Props to you for thinking of their well being!

    Reply
  12. NotMe

    This type of thing is one of the reasons I left the non-profit sector. At previous non-profit job I became jaded as I would see leadership do things that had questionable ethics in the name of “the cause”. They also generally treat employees horribly because they could. Most people who work for a non-profit do it for “the cause” and are willing to put up with a lot for that cause.

    I have found that in my current job, working for a big-bad corporation, we treat people much better. Better pay, benefits as well as the soft stuff. Doing the right thing is how we operate. We don’t just do what is legal, but strive to what is right.

    Reply
  13. Mimmy

    I’m surprised that purposely misclassifying these employees as per diem is allowed. Even though they generally work full-time hours, are their schedules not permanent?

    I agree with Alison – they need to be very clear about why they are doing this, both to you and the employees. You say that an additional 4 isn’t much since there are already 200 employees, but sometimes just that little bit can push you over the budget. I’m not excusing the misclassification, but I’m just thinking from a budgetary perspective (which, I’ll admit, isn’t well-informed, so profuse apologies if I’m off-base).

    Reply
    1. OP

      I think what makes this tricky, and potentially legal, is that when they were originally hired they were truly per diem in the sense that they were only used to cover shifts here and there, but as other staff left management has asked them to “temporarily” step into full time hours with consistent schedules but then next thing you know it’s 3, 6, 12 months later and they’re still “temporarily” helping out. Although this may be legal (this is truly a gray area in my state) I believe strongly that it’s not the right way to treat employees, and that after any significant amount of time working a consistent schedule (3 months or so), they should be automatically reclassified.

      Reply
      1. Meg Murry

        I think another huge part of it is whether they are truly working full time, or only reaching the bottom level of the threshold. For instance, I believe the ACA threshold is an average of 30 or 32 hours per week the previous year, while many companies classify “full time with full benefits” as 37.5 or 40 hours a week.

        Maybe this is splitting hairs, but if the per diem employees are in that 30-35 hour area, could you propose a intermediate group and call it “ACA eligible” with some of the benefits, but not all? For instance, you obviously have to give them medical, and they could buy dental and vision at some pro-rated level higher than the “full-timers”, and same thing with PTO – offer them some pro-rated PTO. At my mother’s old company, for people that worked less than 40 hours, they would calculate their average weekly hours for the previous year, and then give that many PTO hours for the next year (so basically 1 paid week). It wasn’t ideal, but it was at least something.

        And then in the name of fairness, could you propose a policy of how to move people from per diem to full time? For instance, after a set amount of time (3 months, 90 days, etc) of averaging over 30 or 35 hours a week, they would be up for review where you either offer them a full time position or ask them to drop back to a lower number of hours to keep them at a true per diem (or straight up let them go), unless the person doesn’t want to be full time for some reason. I agree with you that if someone is working “almost full time” for months on end, it’s cruel to string them along with no benefits.

        The problem with either of those policies is that if you put a number of hours on it (20, 25 or 29, for instance) some of your managers will then make sure to ONLY schedule the per diem employees to stay under that line, hurting them even further. Which is better/worse, to hire 2 people that but keep them without benefits but underemployeed, or to hire one full time person but then the 2nd person is unemployed altogther? Its an ugly, double edged sword.

        Reply
        1. Ann O'Nemity

          My company ran into the issue you’re describing – what to do when the ACA definition of full-time doesn’t meet the company’s definition of benefits-eligible? Do you offer healthcare only? Do you change the company’s definition of benefits-eligible to match the ACA?

          In the end, my employer decided to push everyone out of the grey zone. Part-time is 28 or less, full-time is 40 or more.

          Reply
          1. OP

            I can answer this. ACA defines FT as 30 hours or more on average. You need to pick a measurement period (such as a quarter, or a fiscal year) and look at that employees hours over the course of that time frame. If they average out to be 30 or more, you need to offer them health insurance because according to ACA, they are full time. However, your company can still consider them “part time” as defined by the company, and not give them dental, PTO, life insurance, 401k, etc. When it comes to non-healthcare benefits, your company can essentially determine its own levels of who qualifies and who is considered full or part time. Does that make sense?

            Reply
            1. OP

              To clarify further, this is because in almost all states in the US employers are not required to offer vacation, sick time, dental insurance, etc. so they can basically set their own definitions of who is eligible, as long as they’re consistent and not based on legally protected characteristics.

              Reply
            2. Meg Murry

              Yes, I think this is one of those areas, as you have pointed out, where there is what is legally required (offering the eligible employees health insurance) and then there is what is ethical. I am 100% on your side that these long term per diem employees should be offered the opportunity to convert to full-timers – that is the ethical thing to do, especially if they have been working extra hours because of vacancies where a different full-time employee quit. I’ve worked places with permatemps, it’s a hellish existance. I was only in permatemp limbo for 5 months – (which is still longer than the 3 months I was promised), there were people who were stuck there for years. I know there are a handful of people that might like being per diem, if they have the option to turn down an offered shift with no penalty (I have friends who are semi-retired who substitute teach for this reason, they can opt to work as many days as they want), but most probably want to be full timers.

              I think in your case the ethical thing to do is first to offer these employees health insurance, since they qualify, and then to work on the process of what it would take to get some of them full time positions. Can you run any kind of reports to see how many full-time personnel you had each year over the last 3, 5 or even 10 years, and how many per diem employees (and/or how many total labor hours or days were paid to per diem employees)? I think if you show that there has been a trend to not replace full time employees when they leave and instead plug the hole with per diems, and then talk about living the mission, it might make a good impact – so you can talk not just about individual employees with individual VP/managers but an overall trend of “our full time headcount has declined by X% per year, I propose we look to add Y new positions in 2016 to get back up to the level we were at in 2012” or whatever. Is there some other threshold they are trying to stay under? For instance, maybe there are local or state regulations that kick in at more than 100 or 200 or whatever employees?

              Good luck and keep fighting the good fight!

              Reply
            3. Ann O'Nemity

              Sure. My company knew that they had a legal requirement to provide health insurance to employees working 30+ once the ACA went into effect. They were in disagreement about what to do with the rest of the benefits and if they wanted to create a third status for healthcare only. The question was more “what should we do?” instead of “what’s our minimum legal obligation?”

              Reply
      2. neverjaunty

        I think the comment about “live your mission” downthread is excellent, and one maybe you need to put in front of your director.

        And even if you are in a state that is benighted about employment law, “gray area” is really, really not a safe place for an employer to stay. It sounds like your nonprofit is NOT talking to an employment attorney (do you have in-house counsel that understands the law well)? Believe me, a lot of companies find out the hard way that a gray area can become a bright line really quick when a court gets involved.

        Reply
      3. Stan

        I work in education where people are classed as substitutes for weeks, months, and even years. This allows school districts to pay the sub (per diem) rate without offering reasonable compensation or a benefits package even though the substitutes take on more and more responsibility the longer they work.

        Reply
  14. Andrea

    (In reference to the last paragraph from Alison) I’d argue that this is indeed a part of a larger pattern, since the OP also states that they underpay employees, etc. Given that context and this issue at hand, I would personally be looking to make a move if I were the OP, and I’d find a way to discreetly give a heads-up to the employees too, because they deserve to have all the information.

    Reply
  15. Amanda

    Wow, this one hit home today. I’m probably losing my health insurance next week due to my nonprofit’s budgetary woes. If they don’t cut it entirely, they’re definitely going to adjust our percentage of the premiums to a level that would be unaffordable for me. I am really lucky that I’m in a position to be on my husband’s very good health insurance, so we are making that switch, but yay nonprofits! Ugh.

    Reply
  16. Jozie

    Fresh out of college, I was looking at certain AmeriCorps programs and one explicitly (on their website) said they pay low to encourage compassion from the people who work for them with the population they serve. I was, like, Really?! That’s what you’re going with??

    Reply
    1. SL #2

      … this is me being cynical, but also to keep themselves in business. If you’re perpetuating the problem you claim to be trying to solve, then you’ll always have a pool of “clients” at hand.

      Reply
  17. BadPlanning

    Do these employees likely know that they could advocate to be regular full time employees? I know that HR is there for the company, but can the OP inform these employees that they need to ask for their employment status to be reviewed? Or is that likely to only be viewed as a sneaky thing and get OP booted? Or get employee hopes up and dashed, or confused?

    I’m thinking something like, “Hi Employee 1, I see that you are basically working full time hours. According to your file, you were hired as a per diem worker. However, it looks like you have moved passed that to fulfilling the roll of a full time employee. You should discuss changing your status with Manager.”

    Reply
    1. OP

      Many of these are brought to us because employees are asking their manager (generally a manager), and in some cases being promised full time jobs that are never delivered on. Generally what happens is that HR is not aware of this until it’s been happening for a few months (we have about 400 employees so it’s difficult to monitor all the hours worked between two HR people) and it’s only brought to my attention because the employee themselves asks us what they can do to become full time or questions us on when the promised full time offer is coming through – which we’ve never been made aware was on the table. I generally bring it to the Director or VP of the department to try and advocate for the employee but the way things are currently structured, I can’t make the final decision and the Director/VP, especially in certain departments, seems to veto it 9/10 times or more. It’s very frustrating.

      Reply
  18. phedre

    As a development director who has spent the majority of my career in fundraising for nonprofits, it kills me when I hear nonprofits doing this. You need to live your mission. Period. End of story.

    When I started out in nonprofits, I was a part-time development assistant for a health-related nonprofit. I had full healthcare benefits even at 20 hours a week, and when I expressed my surprise at a part-timer being given full healthcare, vision and dental, my boss explained that the leadership felt so strongly that our clients deserved the best care regardless of cost and they believed that obligation extended to our employees. What a great lesson that was in really walking the walk!

    I find it appalling that so many nonprofits lowball salaries. Do you want qualified, experienced, competent people who will advance your mission and actually make an impact? Then pay them! So many nonprofits turnover their staff every year because they don’t pay a reasonable salary, or attract well-meaning but inexperienced people.

    Reply
  19. Observer

    I have not read every single response, but I think I got most of them.

    I’d like to make a point. A lot of people have made some excellent points about the overhead myth. And, there has been a lot of talk about what private funders and foundation do. There is one additional factor that I didn’t see anyone mention, and that’s government funding and contracts. The vast majority of social service and healthcare related non-profits have a significant amount of government money coming in, and you would not believe how this skews things. And although things re improving a LITTLE bit, by and large government funders have the most stringent and nit picky spending regulations you can imagine. And, these regulation, all intended to foster “accountability” and “cost effectiveness”, tend to create some fairly ridiculous situations.

    An example that’s relevant here. Many government agencies have hard caps on how much you are allowed to spend of benefits such as insurance. Mind you, legally mandated items like worker’s comp and unemployment (which is a cost the employer has no real control over) are part of that package. Generally this cap is a percentage of personnel costs. So, while it may even be possible that the OP’s org could afford the “extra” benefits (I know they aren’t really extra), it might just push them over such a cap which creates a whole set of problems. And, if you are dealing with government grants, you can’t even raise people’s pay, which would resolve that problem, without permission from the agency. Good luck with that!

    I agree that the organization really needs to come up with a different solution, but without knowing anything else, it’s hard to say whether they are just sleazy or struggling with difficult issues.

    Reply
    1. OP

      You make a really good point. Some of our funders do require us to submit requests for raises and some don’t. Some are okay with us skipping the submission process if it comes out of agency overhead/administrative budget. It depends on the funder and the specific situation. We have per diems across several of our programs which are funded by a litany of sources so it’s tough to make a general statement about how we’d fund raises or benefits for employees.

      That said, I know the agency is in a difficult situation financially. We will soon be facing Executive Order 38, which essentially requires NYS non profit organizations to keep overhead below a certain percentage. I believe it’s 15% but don’t quote me on that. We’re close to that number now, but we’re going to have to be creative to keep it there. One thing to consider however is that it’s very expensive to continually source, interview, hire, retain and ultimately terminate employees, both in terms of tangible cost (cost for posting on various places, time spent for managers, HR to be involved in process) and soft costs (lost productivity, damage to the program, damage to our reputation in the community.)

      I don’t think the agency is sleazy per se, but definitely short-sighted about the impact treating employees poorly will have on our recruitment, retention, morale, employee engagement and community reputation as well as the way people will view our commitment to the mission.

      Reply
      1. Observer

        I agree with you on the cost of turnover – but it doesn’t “count” because there is no line item for that. I’ve actually been told that! Good management understands these things. Sometimes, though, even when it’s clear that this is not the smart thing to do, stupid things get done because there doesn’t seem to be much choice.

        Reply
  20. Rebelina11

    I have a question: are these employees paid per diem rates? I’ an HR manager in health care, and it is widely known that PRN (as needed) employees are given the sweeter deal of a few extra bucks in exchange for being available as needed with no benefits. We had the same situation with one of our nurses and had to offer her health insurance, though I know she would have never taken the pay cut in order to become full time. So, it might not be as unethical as OP thinks, and it is certainly not unethical when the employee herself would rather keep the freedom and extra money that come with being coded as per diem.

    Reply
    1. OP

      No, our per diems are not professional staff (such as nurses) and are paid the same starting wage, about $11/hour, as our FT staff. They are also exempt from all company wide COLA raises and almost never receive merit raises.

      Reply
  21. Le Social Worker

    OP, do you work for my nonprofit? I’m a front line worker, and yes, our salaries are completely low-balled. I’m a licensed masters level professional and my organization is always bemoaning that so few qualified people stick with the job. Uh, it’s because we’re nickeled and dimed on salary and benefits. You could always be like our HR gurus who have had the gall to tell us to apply for government benefits.**

    **I have no problem with people in need receiving government benefits, in fact a large part of my job is helping people seek out and apply for these benefits. I do have a problem with a nonprofit that’s dedicated to fighting poverty paying its employees so poorly that some of them qualify for the same benefits as the clients. I have colleagues receiving WIC, Section 8, Medicaid, etc. It’s a really sorry state of affairs, especially since so much of our money is government funds and government reimbursement (such as billing Medicaid/Medicare for services).

    Reply
  22. NewCommenterfromDaBronx

    For purposes of ACA compliance, employees working 30 or more hours per week are considered full time.

    Reply
    1. NewCommenterfromDaBronx

      Sorry. Hit submit too soon. Also, for ACA, if employer is subject to ACA based on the number of FTE employees, he must provide health insurance to all employees regardless of the employee’s hours worked. (Except for family members & seasonal workers.) Don’t think there are rules regarding other employee benefits, however.

      Reply

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