Nonprofit scholars and practitioners alike adhere to a long-held assumption that nonprofit work is, and will remain, inherently meaningful work. The long-term marketization of the nonprofit sector coupled with the influence of the COVID-19 pandemic has undercut this narrative. Our research on meaningful nonprofit work indicates that while many nonprofit workers do find their work meaningful, pay, flexibility, and work/life balance are increasingly important to them. This commentary suggests that nonprofit leaders can no longer presume that workers motivated by prosocial values will seek out and stay with nonprofit work, satisfied with the “psychic income” that comes from doing good work. Nonprofits must be managed and led differently such that they center workers’ contemporary needs and desires. Organizational and public policy initiatives around pay equity and flexible work can support such a transition for the nonprofit sector.
Nonprofit scholars and practitioners adhere to an assumption that nonprofit work is inherently meaningful work. The premise assumes some individuals, driven by prosocial values or a desire to be a part of something larger than oneself (Bassous 2015), gravitate toward and stay with nonprofit work no matter the socioeconomic or organizational environment. Accordingly, workers will consider “psychic income” as fair compensation (see Pratt 2022). We have conducted a series of research studies on this topic which countervail the “psychic income” narrative (see Robichau and Sandberg 2022; Sandberg, Elliott, and Petchel 2020; Sandberg and Robichau 2022; Sandberg, Robichau, and Russo 2022). Specifically, through an exploration of evolving institutional and organizational environments and how they affect nonprofit workers’ experience of meaningful work (MFW hereafter), we uncovered that workers’ needs and desires around MFW are evolving. When coupled with the “dark side” of MFW scholarship (e.g. Bunderson and Thompson 2009; Oelberger 2019), our research reveals a more complicated experience of nonprofit work than is typically assumed, holding implications for the stability of the nonprofit workforce. The purpose of this commentary is to further develop discussion on meaningful nonprofit work and advance dialogue on possible action items to address nonprofit workers’ concerns in this arena.
Some of the issues in contemporary nonprofit work that our research uncovered can be attributed to the neoliberal prioritization of efficiency and productivity over collaboration, compassion, and service (see Alexander and Fernandez 2021; Sandberg and Russo forthcoming). The COVID-19 pandemic has exacerbated the issues presented by the “do more with less” ethos which defines the contemporary neoliberal marketized nonprofit organization (see Grønbjerg and Salamon 2016). Nonprofit revenues have plummeted while the need for services has increased (Stewart et al. 2021; Streitfeld 2020); programs have been cut (Streitfeld 2020); and staff reductions are commonplace (Bell 2020; Kim 2022).
With nonprofit workers reporting feeling isolated, overwhelmed, overworked, and concerned over their future employment and health (Brew 2020), it behooves nonprofit leaders to acknowledge such concerns. The presumption that altruistic workers motivated by prosocial values will gravitate toward and stay with nonprofit work is moot. Organizational, sectoral, and policy solutions are needed to better support the nonprofit workforce. In this commentary, we provide a brief overview of the evolving landscape of nonprofit work and then explore some potential interventions to address the evolving needs of the nonprofit workforce implicated by our work.
2 The Changing State of Meaningful Nonprofit Work
Assumptions About Meaningful Nonprofit Work
The belief that nonprofit work should be meaningful is rooted in two philosophical positions. One viewpoint positions work as a calling where individuals seek work that harnesses their talents and passions to serve the greater good and further social, moral, and personal significance (Bassous 2015; Schabram and Maitlis 2017). Another viewpoint asserts that finding meaning is a fundamental human need, a psychological state, that cannot be quenched and thus, in part, individuals pursue work that satisfies this need (Hackman and Oldham 1980). Scholars seem to agree that MFW “signifies a positive, subjective, individual experience in relation to work” (Bailey et al. 2019, p. 482). Nonprofit work seemingly satisfies many of the assumptions about what makes work meaningful. Chiefly, nonprofit work seems to offer individuals the perceived flexibility to create MFW experiences that capitalize on one’s talents and motivations along with the opportunity to contribute to the greater good in relation with others (Robichau and Sandberg 2022). Both nonprofit organizations and workers benefit when workers perceive their work as meaningful through greater productivity, engagement, commitment, and job satisfaction in addition to personal well-being outcomes such as life satisfaction and health (for review, Allan et al. 2019; see also, Qu and Robichau forthcoming).
Concurrently, research suggests there is a “dark side” to MFW (Bunderson and Thompson 2009; Oelberger 2019). Workers who pursue MFW particularly in prosocial venues may overwork (Vogel, Rodell, and Sabey 2020), experience turmoil in their personal relationships (Oelberger 2019), engage in dysfunctional practices to maintain meaningfulness (Florian, Costas, and Kärreman 2019), and accept exploitative pay or working arrangements (Bailey et al. 2017; Bunderson and Thompson 2009; Sandberg and Robichau 2022). All of which raises the question, at what point does pursuing MFW beneficial to the greater good countervail the worker’s own interests? Bailey et al. (2019) point to a tension at the heart of prosocial work: the pursuit of prosocial MFW can drive some individuals to harmful excess such as overwork and accepting undue hardships. This tension is acute for those who find MFW largely fulfilled through their relationships with others. Indeed, an enduring paradox exists between prioritizing the needs of the “self” (e.g. self-actualization) versus the needs of “others” (e.g. service to others’ needs) as one seeks prosocial MFW (Lips-Wiersma and Wright 2012).
3 A Changing Workplace
The influences of neoliberalism partially explain the tensions which define MFW in the contemporary nonprofit sector. A political philosophy and mode of governing predominant since the 1970s, neoliberalism emphasizes the values and logic of the marketplace. Neoliberalism creates new markets and market-like spaces, promotes a market ethic emphasizing competition, and injects an enterprise model into all activities in an effort to marketize (or make “market-like”) all things (Dardot and Laval 2013). Research indicates that all facets of nonprofit work reflect changes via marketization (for review, see Sandberg and Russo forthcoming). On one hand, marketization has helped nonprofits professionalize and become more efficient (see Maier, Meyer, and Steinbereithner 2016). On the other hand, marketization has created a precarious nonprofit work environment replete with short-term contracts, competitive funding cycles, the devolution of government services (Grønbjerg and Salamon 2016), and competition for skilled professionals as for-profit businesses encroach into healthcare, education, and social services (Salamon and Newhouse 2019). Further, marketization has evolved nonprofits to prioritize productivity, efficiency, and organizational growth over interpersonal relationships (Sandberg, Elliott, and Petchel 2020; Venter, Currie, and McCracken 2019). The deprioritization of relationships for greater productivity engenders work/life imbalances and burnout (Cunningham, Baines, and Shields 2017), and discord over personal and organizational values (Kreutzer and Jäger 2011; Ruud 2000). Venter, Currie, and McCracken (2019) point to a “nonprofit double-bind” in contemporary nonprofit work in which nonprofit workers continuously navigate between market and mission values.
The COVID-19 pandemic may exacerbate the precarity and disorientation in nonprofit work presented by the long-term marketization of the sector. Nonprofits are fighting to survive increased service demand and falling revenues (Stewart et al. 2021; see also Kim 2022; Streitfeld 2020). Nonprofit leaders are struggling to avoid cutting essential programs which would add to community and economic devastation (Stewart et al. 2021). Even so, American nonprofits alone have laid off approximately 1.5 million workers (see Kim 2022) while furloughing others (Bell 2020). Nonprofit workers anticipate such precariousness in the years to come (see Kim 2022).
While nonprofit leaders navigate adapting to pandemic life (Akingbola 2020; Stewart et al. 2021), it seems clear that nonprofits are not immune from larger forces shaping workplaces. Whether called “the great resignation,” “the great attrition,” “quiet quitting,” or setting healthy boundaries, precarious working conditions and high levels of worker burnout coupled with a strong labor market are leading workers to question the importance of work. Indeed, workers everywhere, including the nonprofit sector, are engaging in a new “worth it” equation weighing flexibility, relationships, personal wellbeing and health, and purpose and meaning against the importance of paid work (De Smet et al. 2021; Microsoft 2022). Experiencing MFW is one of many factors included in the “worth it” equation.
4 Exploring the Contemporary Nonprofit Work Experience
Prior to the COVID-19 pandemic, we commenced a series of studies to explore the effects of marketization on public and nonprofit workers’ experience of work (Robichau and Sandberg 2022; Robichau and Wang 2018; Sandberg, Elliott, and Petchel 2020; Sandberg and Robichau 2022; Sandberg, Robichau, and Russo 2022). When coupled with the larger scholarship on nonprofit marketization and the scholarship on the “dark side” of MFW, and juxtaposed with what we know about evolving work conditions under the pandemic, we believe our findings as summarized in this commentary can shed some light on nonprofit workers’ contemporary experience of work and point toward some key interventions to better support the nonprofit workforce.
In brief, our findings contradict the perception that nonprofit workers’ sole motivation is “doing good.” Nonprofit workers’ motivations and frustrations relative to MFW exhibit both non-market and marketized influences. Similar to previous findings (Brown and Yoshioka 2003; Kim and Lee 2007; Lapworth, James, and Wylie 2018), nonprofit workers seek and are motivated by opportunities to serve the greater good, yes, but increasingly emphasize pecuniary rewards, opportunities for creative empowerment, advancement, and flexible work arrangements too. Indeed, some workers we interviewed expected their leadership to provide more than the “psychic income” associated with serving the greater good. As one nonprofit manager conveyed to us, their sense of their own value manifested not only in love of their work and mission, but also the pecuniary rewards associated with being a skilled professional (Sandberg and Robichau 2022, p. 617). These findings support the notion that nonprofit workers are seeking and increasingly expect financial stability. Further, the desire to make an impact exists alongside a demand for balance between work and home lives and the opportunity for self-actualization (e.g. Johnson and Ng 2016; Salamon and Newhouse 2019). Participants in our research indicated that they resented organizational leadership when they failed to provide such rewards or manipulated their prosocial values to coerce working longer hours with “psychic income” their only reward. It seems to us that the COVID-19 pandemic has accelerated and deepened sentiments already present among the nonprofit workforce.
Leaders of nonprofit organizations play an important role in navigating a MFW experience for workers. Workers look to organizational managers to assist in their job crafting and meaningfulness-making processes to make sense of the work environment (Bailey et al. 2017; Vuori, San, and Kira 2012). Participants in our research asserted a strong desire for self-actualization through improvements in their work performance. They associated their ability to make an impact in their communities or larger society through enhanced work performance. Authentic feedback from leadership on performance proved essential to this aspect of workers’ experience of MFW. The aspect of authenticity is crucial, as some lamented the lack of authentic feedback while others bristled at feedback perceived as inauthentic. Workers actively sought suggestions for improvement as well as praise. Further, participants expressed a desire for tangible, measurable, and quantifiable results. In the field of human resources, research suggests nonprofit workers are more likely to be engaged employees when their job resources (e.g. performance management and supervisory leadership) align with their personal motivations and ideological resources and values (Park et al. 2018). While leaders may seek to increase employee engagement through offering performance feedback, such a desire for continuous self-improvement by workers is a hallmark of the enterprise culture promoted by neoliberalism (Sandberg and Robichau 2022) and may have deleterious effects on workers’ well-being and retention when job demands are negative such as during times of high unpredictability of work, job insecurity, or work/life imbalances (Miner et al. 2015; Park et al. 2018).
While our research is exploratory and not generalizable, our findings suggest that the singular experiences of those who identify as women and people of color relative to nonprofit MFW are worth further exploration (see Robichau and Sandberg 2022; Sandberg, Robichau, and Russo 2022). Consider the growing literature exploring the gendered dimensions of nonprofit leadership which highlights the paradoxical relationship between gender and MFW (see Holgersson and Hvenmark 2023). Women separate their at-home identities from working managerial identities yet may view colleagues as extended family (Sandberg, Robichau, and Russo 2022). Although adopting a relational and less hierarchical leadership style may mitigate some of the effects of neoliberal marketization, leaders may still feel pressured to incorporate certain neoliberal practices (Sampson, Overholser, and Gatti Schafer 2019; see also Boucher 2018). Women and members of other marginalized groups must also negotiate the tensions between their work, their identities, and the systemic inequalities facing their communities (Feit, Phillips, and Coates 2022). Such research expands upon Scharff’s (2016) observation that women experience neoliberal marketization in unique ways.
Furthermore, workers in our study who identified as women and/or people of color indicated a strong attachment to and sense of meaningfulness in prosocial work and work relationships (with clients, coworkers, etc.) particularly if that work was gender or culturally specific. Experiencing a sense of social belonging may reduce instances of burnout and conflict (Allgood, Jensen, and Stritch 2022) yet many of these same workers also indicated high levels of stress, work/life imbalances, and burnout suggesting that women and people of color face a “triple-bind” (Sandberg, Robichau, and Russo 2022) as they navigate mission and market values as well as the impacts of gendered and racialized organizations (Feit, Phillips, and Coates 2022; see also Holgersson and Hvenmark 2023). Here no amount of “psychic income” could compensate for the burnout experienced.
5 Interventions to Support the Nonprofit Workforce
Neoliberal governance has changed nonprofit work and the COVID-19 pandemic is furthering that evolution. Implementing realistic interventions for the nonprofit sector requires both systems and organizational level responses. At the systems level, thinking about workforce issues should occur at higher levels as government funders, policymakers, and foundations recognize the implications of the “nonprofit starvation cycle” (Lecy and Searing 2015) on the sector. Simultaneously, organizational leaders and donors should recognize their employees’ realities where their desires for personal impact and MFW may ultimately be trumped by the needs for security and stability. While there is no elixir for solving all the workforce challenges facing the nonprofit sector, some targeted interventions which address nonprofit workers’ needs and desires around MFW could lessen the impacts of the changing world of nonprofit work.
The findings from our research support prior scholarship which suggests that financial compensation now occupies a critical space in nonprofit work. Nonprofits have long been unable to provide competitive wages, a norm bolstered by societal expectations that nonprofit workers sacrifice competitive wages for the opportunity to do good work (Kim and Charbonneau 2020). While expectations around donative labor may linger, nonprofit workers’ expectations around pay are changing such that they are willing to leave jobs and the nonprofit sector altogether for better compensation (Johnson and Ng 2016; Kuenzi, Stewart, and Walk 2021). As one participant in our research put it, “at some point, they need to show me the money …” (Sandberg, Robichau, and Russo 2022, p. 83). Further, as Kim and Charbonneau (2020) point out, “even though many employees are willing to accept low wages to work at a nonprofit by choice, it does not mean that the practice is fair” (p. 342). Nonprofit leaders are concerned about balancing fair compensation with service provision (as evidenced by debates over supporting raising the minimum wage; see Pratt 2022), but growing evidence makes it clear that nonprofit leaders, funders, and capacity builders must come together to advocate for competitive wages for nonprofit workers. Supporting legislation such as the Raise the Wage Act to increase the federal minimum wage (see Pratt 2022) as well as state and local policies addressing minimum wages, salary transparency, and pay equity (see Mendieta and O’Leary 2022; Northwest Health Foundation n.d.) are necessary steps forward. Evidence suggests that while there are tradeoffs that must be made (see Romich 2017), nonprofits generally can absorb the costs of increased compensation (see Pratt 2022) if supported accordingly (an issue we unpack below).
5.2 Flexibility and Balance
As global trends suggest, workers desire flexible and remote work with manageable workloads (Microsoft 2022). Hybrid work, based on the premise that giving workers flexibility will encourage more balance between work and personal demands, may successfully decrease burnout while providing increased productivity and retention (see Mullins, Charbonneau, and Riccucci 2021). However, hybrid work requires expertise to implement and maintain (Akingbola 2020). Employee engagement strategies that enable hybrid work while also maintaining team camaraderie and a sense of belonging are vital as well. These strategies include normalizing virtual team check-ins, encouraging social interactions amongst workers using technology, offering clear and open communication pathways between staff and managers, and creating expectations to prevent overwork (Quantum Workplace 2021). Intentional nonprofit leadership plays a pivotal role in both implementing and maintaining a sustainable hybrid environment. Legislation promoting hybrid work and which provides guidelines on implementation of remote work (e.g. Canada’s Telework Policy; see Mullins, Charbonneau, and Riccucci 2021) can support organizational efforts. Hybrid work is of course only one aspect of engendering a flexible work environment and furthering work/life balance. Equitable and family-friendly organizational and public policies which explicitly enable work/life balance are also crucial (see OECD n.d.).
Evidence suggests nonprofit workers have long valued workplace relationships and the social and intrinsic rewards offered through mission-oriented work (Mirvis and Hackett 1983; Stater and Stater 2019). The findings from our research demonstrate that relationships still matter a great deal to nonprofit workers (Robichau and Sandberg 2022; Sandberg, Elliott, and Petchel 2020). Creating a people-centered nonprofit culture requires a conscious effort by leadership to value workers as individuals who derive meaning from interpersonal relationships. Trends show a disconnect between what employers think retains employees (more pay, better jobs) versus what employees value most including a sense of belonging and feeling valued (De Smet et al. 2021). As a result of the COVID-19 pandemic, isolation may increase feelings of deteriorating workplace relationships. Evidence suggests engaging workers in discussions and reflective practices on how their work helps others is associated with increases in motivation, productivity, wellbeing, and intention to stay (Grant 2008; Vogel and Willems 2020). Leaders play a vital part in authentically helping workers make a positive sense of work, craft their job, and reflect on the social impact and personal relationships offered through their work (Robichau and Sandberg 2022; Sandberg and Robichau 2022; Stater and Stater 2019; Vuori, San, and Kira 2012). Given that retaining employees is more cost-effective than hiring new ones (Nonprofit Leadership Alliance 2022), interventions like these benefit organizations and workers for little cost. These interventions do require intentionality and genuineness when addressing workers’ wellbeing.
5.4 Overhead and Capacity
Nonprofit funders, contracting agencies, and other capacity builders have a unique, albeit broader policy role in supporting nonprofit operations and infrastructure. Recently experts across the sector have lamented the outsize emphasis placed on low overhead ratios as indicative of nonprofit effectiveness. Falling overhead ratios over the last 25 years reflect decreases in administrative expenses, particularly for nonexecutive staff wages, which contribute to a “nonprofit starvation cycle” (Lecy and Searing 2015). Mitchell and Calabrese (2019) refer to efforts to minimize administrative overhead as a “financial proverb” with many negative consequences for nonprofits. Many of the interventions discussed above (increased compensation, engagement in advocacy work, technology for hybrid work) necessitate administrative funding, and as such, the prevailing mindset around nonprofit overhead costs must change. In short, nonprofit administration and operations must be better funded.
Recent scholarship conveys the possibility for changing the narrative around nonprofit overhead. Berrett (2022) demonstrates that investment in organizational capacity including salaries and technology actually supports nonprofit effectiveness. Qu and Daniel (2021) suggest that framing overhead not as “overhead” but as investments in organizational capacity lowers donors’ aversion to supporting such costs. Changing the Form 990 so that expenses are no longer divided by management, programs, or fundraising expenditures may also prove helpful (Berrett 2022). On a more comprehensive level, proposed legislation such as Oregon’s Nonprofit Modernization Act seeks to bolster nonprofit operations and workers long-term by reforming government contracting rules and norms to mandate equitable wages, streamlined grant application processes, and timely reimbursement systems (Northwest Health Foundation n.d.). Ultimately, sector leaders, policymakers, and donors must acknowledge that nonprofit work costs money and without enough of it, nonprofit capacity and mission attainment remain at-risk (Berrett 2022; Lecy and Searing 2015; Mitchell and Calabrese 2019) as does the sustainability of the nonprofit workforce.
Prevailing wisdom holds that nonprofit work is inherently meaningful work and that “psychic income” provides subsidies for insufficient compensation and benefits. As this commentary has demonstrated, there is a growing body of evidence countervailing this narrative. Like all workers, the expectations for MFW that nonprofits workers now hold have been influenced by neoliberalism and the COVID-19 pandemic. Sufficient pay, flexibility and balance, relationships and doing good work all matter in equal measure. It is time that the nonprofit sector take notice of this evolution and collectively devise both organizational and systems-level solutions to better support the needs and desires of the nonprofit workforce for work that is not only meaningful but sustainable as well.
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