Independent- April 14th

Nonprofits for Living Wage
by Jarrod Schwartz, Executive Director, NCCJ (The National Conference for Community and Justice); Anna M. Kokotovic, PhD, Executive Director, CALM; and Raquel Lopez, Executive Director, La Casa de la Raza.

A recent newspaper editorial about the proposed Living Wage ordinance in Santa Barbara asked, "Who's looking out for the nonprofits?" As a group of nonprofit executive directors here in Santa Barbara, we want to say that supporting a living wage ordinance that includes nonprofit organizations is the best way to look out for nonprofits. In fact, we are just a few of the many nonprofit executive directors who have been advising Santa Barbara for a Living Wage to ensure the ordinance they develop protects the interest of all nonprofits in our community. The current draft of the ordinance includes both realistic pay rates and sufficient exemptions to ensure that not a single nonprofit organization would be hurt by the ordinance.

The proposed $13.40 per hour with benefits, or $15.40 without, translates to an annual salary of only $27,872 to $32,032, still by no means enough to buy a home and raise a family in this city, but a welcome improvement. The nonprofit ordinance would only cover organizations that receive more than $10,000 in funding from the City each year. Based on the City's 2004/2005 funding allocations, only 24 or 25 nonprofits would be covered and some of these organizations already pay a living wage to all employees.

In addition, only nonprofits whose director earns more than four times the amount of the lowest paid employee would be required to comply with the ordinance in the short term. For example, an organization that pays its executive director $60,000 per year would need to pay its lowest paid employee $15,000 or less per year to fall under the auspices of the ordinance in the short term. Those agencies with a salary ratio of less than 4 to 1 would be given three years in order to meet a living wage. With good strategic planning, many agencies could achieve a living wage in this time frame.

As a result, any agency that would be covered under the ordinance but does not currently pay a living wage has a multitude of options. They can develop a three-year plan for achieving a living wage, they can achieve a less than 4:1 salary ratio by raising pay rates for their lowest-paid employees or reducing the pay of the highest-paid employee, and/or they can drop their funding request to the City to below $10,000.

The ordinance is a way for the City to use its purchasing and funding powers to make a principled stand that they will no longer subsidize poverty-level wages
except in cases of demonstrated need.

It's also important to remember that if none of these strategies is possible, organizations have a final safety net. Any organization can apply for a hardship waiver - renewable annually - to exempt them from the ordinance by simply demonstrating to the City how complying with the ordinance would produce undue harm on the agency and its ability to deliver its vital services.

Beyond the fact that this ordinance will not hurt any organization is the fact that it makes good business sense. As executive directors we know firsthand how hard it is to attract and keep great employees. Too many of us have already lost vital staff to the corporate sector, where the pay is better, or to other communities, where the cost of living is lower.

A living wage is critical to ensuring the long-term viability of nonprofits in this community. It is also relatively inexpensive compared to the loss of productivity and costs associated with high turnover rates. Employee searches, training, and bringing new staff up to speed all take time, resources, and energy that could be put to much better use.

Finally, a living wage is the right thing to do. Too many people believe that nonprofits shouldn't pay their employees competitively because, after all, "people work for nonprofits because they care, not for the money." This myth is damaging to both nonprofit organizations and to our community. The truth is, nonprofit employees do care, but caring isn't enough to support a life and a family in Santa Barbara. For that, we also need equitable pay.

Nonprofits provide vital services to the City and county - we are in many ways the caretakers of this community, filling vital gaps left by the for-profit and public sectors. Still, so many of our employees who invest their time, energy, sweat, and passion in making this community a better place cannot afford to live here.

With all of the exemptions built into the Living Wage ordinance, we believe that not a single nonprofit would be hurt or forced to close its doors. Instead, the ordinance is a way for the City to use its purchasing and funding powers to make a principled stand that they will no longer subsidize poverty-level wages except in cases of demonstrated need. They will also be providing a model to others that the best way to ensure a sustainable nonprofit sector is to pay nonprofit employees a salary that allows them to receive in return a portion of what they give to our community.