Is The Cost of College Killing The Nonprofit Sector?

From recent, extensive media coverage, most people know that the cost of a college education is increasing. That’s an understatement when one looks at the actual numbers. According to the Institute for Higher Eduction Policy the cost of college has increased a whopping 500% since 1985. Compare that to the increase in medical costs over the same period — 286% — and our much-criticized health care system begins to look reasonable.


This is bad news for everyone, most especially for the nonprofit sector, which provides essential services that businesses and government can’t. There’s not much profit in helping the homeless or trying to save the polar bears, but somebody’s got to do it and that usually means nonprofit groups.

The staff who operate these nonprofits are entrusted to handle some difficult and sensitive tasks, jobs which often require not just an undergraduate education but advanced degrees and professional accreditation. Homeless shelters need counselors who have an MSW (master of social work), a degree that takes five years of college to acquire. Environmental groups need scientists who understand the complexities of ecosystems, food webs and a host of other processes, both natural and human. Even small, local organizations that run on volunteer power, such as soup kitchens and thrift shops, require a few paid staff to procure resources, organize volunteer work and ensure compliance with IRS and other regulatory standards.

Today, the average entry-level salary in the US nonprofit sector is $35,961. The average of all nonprofit salaries, from the least to highest paid employees, is not much higher at $49,000. Compare that to the average student loan debt of $35,200 for a four-year degree. Even the most idealistic graduate is going to think twice about taking a job whose annual compensation is just slightly more than her student loan debt.

Few people are clear about what’s to be done. Perhaps nonprofits could pay more, but higher salaries will bump up against the rules, both legal and ethical, of running a nonprofit, where the goal is to channel as much revenue as possible into mission-focused program work. Another option might be greater use of volunteers, but many will not have the time or the skill to take on major roles, such as legal counsel, IT manager or program expert. It’s unrealistic to think that nonprofits can forgo hiring college grads or rely entirely on volunteers to carry out their important work.

Some nonprofit groups cope with this challenge by offering non-monetary incentives as part of their compensation packages. Variable work hours, telecommuting, generous vacation and other perks can make the difference for prospective employees who need flexibility to meet family commitments or for those who want more control over their work environments. While these adaptations are creative and commendable, they won’t solve the core problem. Something has to give on the cost side of the college equation.

Reprinted with the permission of Bonnie McEwan, specializing in nonprofit communication, media and leadership.

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