Today’s competition for talent is testing the nonprofit community. More than three-quarters of nonprofit organizations surveyed said they are struggling to find and retain talent.1
Rising healthcare costs, largely driven by inflation, are projected to increase medical spending by more than 5% in 2024 compared with the prior year. The continued escalation of healthcare prices will challenge organizations, particularly nonprofits, which often rely on the quality of their benefits to offset lower wages.2
But some nonprofits are finding new ways to fund their human capital needs and benefits. Some have found success by using endowments, and others have taken creative approaches to benefits to reduce costs without compromising the quality of care.
A Midwestern social services nonprofit recently felt a common human capital pinch. Wages for its direct care workers averaged $16 an hour. Turnover kept climbing. Recruitment became more and more challenging.
A major donor asked management and its board what it would take to raise every direct care worker’s wage by $2 an hour — and to do it in perpetuity? The answer: $3 million. A human capital endowment was established, funded by the donor and managed through an area community foundation. Worker wages increased across the board and the recruitment and retention issues disappeared almost immediately.
