Nonprofit Glasses Notes

As minimum wage rates rise across many cities and states, there is a renewed discussion around how such laws affect workers and businesses.  Less often discussed, however, is the impact of such laws on nonprofit organizations — in particular organizations that employ low-wage workers to provide care or services to the most vulnerable residents in our community. The latest report from the Minimum Wage Study at the University of Washington, examines initial nonprofit responses to the local move to $15 an hour.

Many nonprofit organizations that provide child care, home health care, and senior services find their revenue streams shaped by forces outside their control: federal program budgets; reimbursement rates; decisions by charitable philanthropy and private donors. Although these kinds of nonprofits support the goal of a higher minimum wage, higher labor costs without easily manipulated revenue streams can create operational challenges.

Most Seattle nonprofits appear to have weathered the initial step-ups in the local minimum wage, but many organizations are just beginning to craft strategic responses.  Nonprofits appear to be waiting to see longer‐term responses of the local labor market to the $15 an hour wage before making any significant decisions or changes. Nonprofits also are anxiously awaiting signals from the federal and state government about program funding in the coming year. Such uncertainties complicate any staffing and programmatic response that might be taken to cope with higher minimum wage rates.

Click here for the report on local nonprofit responses to the Seattle minimum wage ordinance from the Minimum Wage Study.

Written by Scott W. Allard