Editorial: The nonprofit squeeze
New York’s not-for-profits do mightily important work.
They provide child care for many of our children. They care for the elderly. They help people with addiction overcome their disease and those with physical disabilities lead more fulfilling lives. They feed the poor, shelter the homeless, rescue animals and tend to the ill.
That’s an abbreviated list, of course. Nonprofits touch nearly every corner of society. Where would we be without them?
But nonprofits are feeling the squeeze. The pandemic has in many cases increased demands for the work they do, just as rising costs are making it more costly to do that work.
For example, Molly Nicol of the Regional Food Bank of Northeastern New York recently told the Times Union that spiking food prices are leading to many more families needing her organization’s help, just as the organization is paying significantly more for food and fuel.
“We’re sort of experiencing a triple whammy,” Ms. Nicol said. “The price of fuel went up, the price of food went up and need just exploded.”
Rising labor costs amid a tight labor market are another problem, albeit not a new one.
The minimum wage increases passed by the state in 2016 and still being phased in were necessary, but the legislation also steadily increased labor costs for nonprofits. Labor shortages and rising raises, while undoubtedly good for workers, have exacerbated the difficulty for nonprofits that compete with the private sector for labor.
As The New York Times recently reported, nonprofits nationally are experiencing a wave of staff departures and rising vacancy rates as the wages and salaries they pay fall further behind their private-sector competitors. The newspaper found that total nonprofit employment in November was 4.8 percent below its pre-pandemic level, compared with a 1.5 percent employment gap in the for-profit sector, and the labor shortage made it more difficult for many nonprofits to keep up their service levels.
There is a state government component to this. While many nonprofits do not receive direct funding from New York’s taxpayers, those that do say that the money they receive has not kept up with their rising labor costs.
For example, the $212 billion state budget this fiscal year raised overall spending by 10 percent, but included just a 1 percent increase in funding for certain human services nonprofits overseen by state agencies, including those that help people with developmental disabilities, mental illness, and substance use disorder. Meanwhile, the minimum wage went up in parts of the state outside New York City — including a 7 percent hike on Long Island and in Westchester County, and a 5 percent bump upstate.
The disparity between rising labor costs and relatively stagnant state spending isn’t sustainable. Something has to give, and if things keep going as they are, it will be the services that help many of New York’s neediest people. Gov. Kathy
Hochul must find a way in the state’s next budget to give more to help them survive, and thrive.