At Foraker, we believe that the nonprofit sector is essential to our democracy. More than just a system of government, the idea of democracy is the notion of free-flowing ideas that often confound us, make us think, and yes, often disagree. Democracy requires attention and conscious conversations. It is, after all, only held together by people with ideas and the rules, ethics, and values that we write and live around it. At times, disagreement is how we know our freedoms are at play. Not conflict for conflict’s sake, but the notion that this ever-evolving system needs respect, connection, and healthy debate. This is the thread that holds us together even as some want to frame it as the thing that pulls us apart.
The nonprofit sector is one of those places where we come together to uphold democracy. We freely associate with missions that matter to each of us. Inevitably that means that for every nonprofit mission you would commit your life’s work to there is another nonprofit that is likely formed for the exact opposite purpose. That is how we make space for everyone to engage in civil society.
Let’s take a look at just a few ways nonprofits lift up the ideals of democracy and small steps we can take together.
Civic engagement through volunteerism
According to AmeriCorps, in 2021, 148,537 Alaskans reported that they “formally” volunteered through a nonprofit organization contributing 9.5 million hours of service worth an estimated $299.1 million. That equates to 27.3% of residents formally volunteering through organizations. While impressive, this data is down since the pandemic and no longer places us in the top 10 states for volunteerism. Importantly, these numbers also need to include how Alaskans also volunteer beyond their role with nonprofits. This “informal” type of community service includes the 98.9% of residents who talked to or spent time with friends or family, the 55.0% who informally helped others by exchanging favors with their neighbors, and the 66.5% who had a conversation or spent time with their neighbors. You know these people! They are you and me, your neighbors, and your mission volunteers. This isn’t a place that divides us, it is the place where we find commonality and connection. And it is what makes Alaska work. You can see it on a big storm day when we are helping strangers navigate the snowy conditions without asking them first about their politics, just strangers helping each other because that’s what keeps our communities strong.
Small donor investment as community collaboration and action
All the data on philanthropy is clear. Since the 2017 tax reforms, we have lost our grassroots donors who used to constitute the majority of charitable giving to nonprofits. In 2021, the American Community Survey reported that 25.7% of Alaska residents belonged to an organization and 47.7% of residents donated $25 or more to an organization. While this is encouraging, it is important to note that individual giving at everyday levels is down across the country. We need grassroots giving, not because we can sustain or even maintain our nonprofit budgets based on these gifts but because the donors themselves demonstrate the power of the people that keeps our democracy in check and balance. The action of many donors investing in a cause disperses power and privilege, it invites ideas and community, and it signals a larger interest for the mission to thrive. Philanthropy means love of humankind and while it can manifest itself in many ways through time, talent, and treasure, the nonprofit sector as a whole is being persuaded through both tax reform and the will of donors to lean only into a few wealthy donors and to abdicate efforts toward grassroots or retention philanthropy. Yet, philanthropy and democracy move hand in hand. We need a strong and wide base of donors not only in each organization but throughout the sector because that is where the voices of the many live. And while moving to large donor strategies like Donor Advised Funds might be the financially savvy decision for some, it leaves in its wake a much bigger and longer-term challenge of preserving our democracy for the people and by the people.
Leadership incubation and workforce development
Every day our nonprofits are a place where we grow leaders – in our boardrooms, our staff, our volunteers, and sometimes in the outcomes of our missions. We attract, retain, and grow a richly diverse pool of people who are drawn by the cause and often must acquire the skills. We are excited to share our upcoming economic report with you this fall that will fully detail all the latest workforce statistics and economic impacts throughout Alaska. But for now, it is safe to say that nonprofit employment numbers are a key factor in our state’s economy and each of those employees and all of the board and mission volunteers are learning and growing every day from their work with nonprofits. Our democracy requires thriving economies and a steady workforce – our sector is essential to those tasks.
While Alaska’s workforce shortages from the pandemic and outmigration have at least in the short term created a very difficult marketplace for nonprofits to attract and retain employees, we can shift some of the narrative to what we do offer – a place to lead with one’s heart and head, a place to do work that matters today and for decades to come, a place that builds a stronger Alaska workforce for each of our communities while having a high aptitude for innovation, adaptability, and collaboration. And we offer a sector that often leads the way in its commitments to inclusion and belonging during the day and in the systems we seek to shift.
Taking action with our collective power for the greater good
If we add up our volunteers, our donors, and our staff and we put them all together, that is a lot of people. And when we mobilize them, they are democracy in action. Perhaps there is nothing more powerful in our democracy than the right to vote. America and Alaska have many challenges in activating people to vote. The barriers are real and, in some states, are getting increasingly more difficult. We also know that trust in our systems is challenged, and opinions are strong. Yet, in Alaska, you can see how every vote matters in a race where often a person wins by just a handful of votes. Of course, ALL charitable 501(c)(3) nonprofits are prohibited (rightly so) from endorsing a candidate, but our nonprofits are also trusted sources of information and are often focused on access and opportunity. Extending your trusted voice to your constituency in a nonpartisan way to encourage voting is not a leap, only a step. We know staying neutral and nonpartisan can be hard or sometimes confusing to navigate so we have partnered with Nonprofit Vote to provide you with a nonpartisan voter engagement guide – because your trusted voice matters in our democratic process.
To be clear, none of these issues side with one political view or another. Instead, we can feel their impact on our daily engagement within our communities. Collectively we can see them as the fabric we weave together with each choice and every action over generations in this often messy and imperfect democracy. We can lean into fear or despair or division or divisiveness, or we can respond individually and as organizations by taking small steps that matter.
Walking with you,
Laurie
P.S. Learn more about what we believe here.
This month we released our Salary and Benefits Report & Dashboard. While we have been producing these reports for nonprofit decision-making since 2003, this year our report is bigger and better than ever thanks to a partnership with the state nonprofit associations in Montana, Idaho, Washington, and Oregon.
Certainly, this type of data has been useful in the past but right now the nonprofit workforce is at the nexus of events that likely will result in a lasting shift for current and future employees. We have reported over the years on the challenges nonprofit employees and employers face, which sadly have not changed much because few organizations ever feel like they are fully staffed or financially flexible enough to deploy the team they have in all the ways they think would be best. The long-standing issues are now exacerbated, and new ones have surfaced since the height of the pandemic which has resulted in a highly competitive environment to recruit and retain staff.
Whether you dive into the data or not, we encourage you to consider how these issues impact the choices you make to recruit and retain staff, how you write and execute policies and expectations for nonprofits in government grants and contracts, how you choose to volunteer to support existing staff efforts, how you donate to help support the ability of nonprofits to compete in the marketplace for the best and the brightest to perform essential work in our communities, and how you decide as an employee to navigate a complex environment marked by hurdles and opportunities.
None of us are alone in this space. Together, as employers, policymakers, volunteers, donors, and employees, we all have a role in creating a vibrant economic landscape for nonprofits to do their best work on behalf of us all.
Let’s dive into just a few of the largest hurdles (and a few opportunities) we face in Alaska’s workforce and what our study’s findings confirm we are experiencing:
These factors and more mean that the employment landscape is incredibly competitive. It can certainly feel overwhelming and hard to navigate. We see nonprofit leaders worried. We hear the concerns. And we recognize that most of these challenges will not be solved by one nonprofit or one change in policy, or a funding decision. We also know that we can all play a role in addressing what is in front of us.
We are standing with you with data we can turn to action, with tools you can use today, with support to listen and learn on your journey, and with our advocacy voice that seeks the changes we need so we can all succeed in serving our communities. Together we will navigate our way forward.
Reach out! Join us!
Laurie
A complicated truth is that the same turnover, personal time assessment, and value propositions impacting our nonprofit workforce are also deeply impacting our nonprofit boards. The conversations about how to reignite and reengage our most essential volunteers are ever-present. While not surprising, the escalation of these discussions since the pandemic is, just as in the workforce, a reality we must accept. You are not alone in thinking about what is happening in your boardroom as the challenges are not restricted to one type of organization, geography, budget size, or mission topic.
Layering on the shifts in philanthropy and general volunteerism levels in this country and our state is an opportunity to pause and consider what to do next. Importantly, starting by understanding that at the heart of both philanthropy and volunteerism is the value proposition of meaningful engagement – where effort matters, where making a true difference in the world in real time is truth, where boundless opportunities exist to the donor and volunteer to be part of something bigger than oneself. These are all still available tools for us to access. Equally true, we cannot forget that board service is what happens in people’s free time. Board members could be doing anything else, but they are choosing volunteer service (and often choosing philanthropy to match) so our efforts to use our tools are essential to our success to both attract and retain boards on purpose.
Confoundingly, most of the conversations happening in nonprofit capacity-building circles are all about the staff response to board challenges, but the majority of nonprofits in this country and two-thirds of all Alaska nonprofits have no staff. We need a different conversation with different options to keep the mission moving productively and our boards on board.
To be sure, regardless of staffing levels, the research and our experience over decades are clear – the single most important factor of a high-performing organization is the quality of the board’s work. To also be clear, the staff can and often do buoy a low-functioning board for a bit of time, but ultimately it cannot be sustained so we all need to pay attention to how our boards are functioning and do our part, regardless of our role on the board or staff, to help the team succeed.
For all of you serving on nonprofit boards without staff, these five practical options can keep your board engaged and effective, and the work meaningful, and hopefully have fun while not incurring costs.
While it is never a good idea to be a paid staff and a board member at the same time, it is the norm to be both a board member and an unpaid staff member or volunteer at the same time. The trick is to know the difference between each role and the boundaries and ethics of each. A few ways to make this distinction is to recognize first that boards speak with one voice and have no individual power or authority (regardless of title or tenure) to make individual decisions. The decision is always made by the collective body. At a minimum, these decisions are legal, financial, and strategic and often include matters of public policy, messaging, and strategic partnerships. Unpaid staff have designated and specific roles that if the organization had the resources would be paid positions. These positions provide longevity and continuity of mission and organizational structure. On the other hand, volunteers (who are not board members) are often characterized by short-term and sporadic work and there are often far more of them than either board or staff. All three of these roles often come together in committees where separation of duties and reporting structure become even more important.
One extra note on potential team members: paid staff or not, it is common for nonprofits to engage 1099 independent contractors as team members. This is common to achieve technical aspects of maintaining the business such as bookkeeping, communication, events, and legal guidance, and can also be used for sporadic mission delivery. If there are no paid staff, the reporting structure, communication, and expectations can quickly become murky and complicated. First, it is essential to clarify that this is truly an independent contractor role and not a subversion of the Department of Labor rules on staffing. Then it is important to ensure written agreements are in place to save time, headaches, and hassle with your team.
The roles of officers, especially that of the secretary and treasurer are fairly different if there are paid staff on the team or not. For example, generally, if staff are part of the mix they are building the budget, taking minutes, preparing the board packet, storing organizational documents (using a Document Retention Policy), and filing official compliance documents while the board secretary is usually just the official signer on behalf of the organization and the treasurer is usually just presenting the financial statements and/or chairing the finance committee.
The difference in the treasurer’s role revolves around who is preparing the financial statements, budget, and 990 for review. One reason we often see a desire for a “treasurer for life” in unstaffed organizations is that the burden of creating and presenting the financials makes this person indispensable. However, this arrangement also creates some risk management issues for the organization that should be carefully considered.
An additional practice is to encourage each board member to serve on the finance committee for at least a year during their time as a way to engage more people and provide a positive exposure to the system.
Few people want more meetings but if a meeting is necessary then it must focus on what matters the most. When there is no staff and the board is the primary unpaid staff support, it is all too easy to let the urgent take over the strategic, effectively eliminating all the board topics from the agenda in place of the logistics of the day.
As the saying goes “If you don’t know where you are going, any road will get you there.” Defining success whether strategic goals, annual priorities, fundraising or communication efforts, budget, or truly anything that requires people, time, and money, the team needs a plan to stay on track and work effectively together. Without clear definitions of success and no staff to keep the team aligned, it is simply too easy to get off track and spin in different directions.
One of my long-standing models for board service is that of firefighters because they don’t just do their duty to put out fire and that is exactly what makes them good at it. Instead, they focus on the team and build a culture of trust and connection. They play together, eat together, practice together, and align themselves to a set of ethics and values that keep them safe and working as a team. And, they can distinguish fire from other issues they need to contend with so they put the right resources in the right places. The lessons are many and one that stands out among them all is that of a culture of trust, ethics, connection, communication, and team at the center of success.
Nonprofit board service like civic engagement overall is a choice to take a deeper and more thoughtful step into society at large and our communities more specifically. It is not an easy choice, and each person goes on their own journey to decide when the time is right for them to invest in the process. Let’s all do our part to make sure the board experience is something people want to keep doing and more people choose to do every day.
Laurie
P.S. If you are ready to take the leap into board service, check out Alaska Board Match and sign up today. It’s free.
You’re invited to the 2025 Foraker Leadership Summit! Join us on April 14 & 15 at the Dena’ina Center in Anchorage to stretch your thinking and discover ways to put new ideas into action. Stay tuned for information on registration, speakers, and more.
The U.S. Department of Labor issued a final rule to increase the minimum salary threshold for the “white collar” overtime exemption under the Fair Labor Standards Act (FLSA) from its current rate of $35,568 to $43,888 per year starting on July 1, 2024 and increasing to $58,656 per year starting on January 1, 2025. To be exempt from overtime pay under this provision, workers must be paid a salary of at least $58,656 and must also meet certain job duties for executive, administrative, and professional employees. Workers with a salary below this threshold must be paid overtime if they work more than 40 hours a week. Currently, the State of Alaska requires salaried employees who are exempt from the minimum wage and overtime requirements under Alaska Statute 23.10.055(b) to maintain a salary that is equivalent to two times the minimum wage for the first 40 hours worked in a work week. In 2024, that rate is $48,796.80/year. The State of Alaska has not yet released Wage and Hour requirements for 2025. That being said, employers cannot pay their employees less than the federal minimum. Now is the time to review jobs at your organization that will not meet the federal minimum and adjust your budget accordingly. We will share information on the State of Alaska changes once it is released. Contact us if you have questions or reach out to statewide.wagehour@alaska.gov.