JUST MONTHS into Donald Trump’s second term, Massachusetts nonprofits face seismic changes for the sector. The president and his administration have frozen federal funding for nonprofits, restricted whom nonprofits can serve, and threatened the status of individual nonprofit organizations. Under the guise of “decreasing waste,” efforts to reduce the federal workforce jeopardize a critical relationship with nonprofits that ensures Americans receive crucial services.

It makes for an uncertain moment for frontline nonprofit workers who provide services like housing assistance, health care, legal aid, food access, child care, and arts and educational programs – all services considered “essential” during turbulent times like the COVID-19 pandemic.

As we saw during the pandemic, the accelerating demand for services without increases to salaries led to high burnout and turnover across the sector, disrupting the delivery of vital services to communities across the country. Once again, we are at risk of losing these essential services and the workers who provide them.

Despite these pandemic lessons, we have failed to fix the salary and compensation problems that drive nonprofit professionals out of the sector during times when we can least afford it. Today, 22 percent of the nation’s 12.7 million nonprofit workers experience financial hardship. With a higher-than-average cost of living in Massachusetts, the situation is even more dismal for the state’s 550,000 nonprofit workers.

Recent data from TSNE’s Valuing Our Nonprofit Workforce report, supported by the Boston Foundation, shows that almost two-thirds of nonprofit workers in the Commonwealth who provide essential services may not earn enough to make ends meet. This reality runs counter to Elon Musk’s misleading claims of self-enrichment across the sector. Thousands of nonprofit workers providing services in Massachusetts often are forced to rely on safety net services for their own survival.

They turn to organizations like Bridge Forward Fund, a nonprofit that provides cash assistance to Massachusetts professionals to cover basic needs during destabilizing emergencies and wrap-around services that promote economic mobility.

Cindy, a nonprofit employee providing administrative and direct care support at one of Boston’s biggest hospitals, shared her experiences, which encapsulates the reality for many Massachusetts nonprofit workers.

A single mother of two who fled domestic violence, Cindy works full-time to provide for her family. In her nearly 10 years at the hospital, she earned promotions that came with increased pay and responsibilities. Still, her income was low enough that she relied on benefits like the Supplemental Nutrition Assistance Program (SNAP) and health coverage through MassHealth.

Her most recent promotion, however, came with a salary increase that made her ineligible for these programs. In other words, an unintended consequence of her decade of hard work was the “cliff effect.” While she has health insurance through her job, she pays extra to get coverage for her children to match what they had under MassHealth. Cindy says the new expenses reduced her limited savings to cope with emergencies, plan for retirement, support her children through college, build wealth, or see a future for herself in the sector.

Stories like Cindy’s are increasingly common for nonprofit workers throughout the country. Women in the sector are especially vulnerable. In the Commonwealth, women lead around two-thirds of nonprofit organizations, employing a workforce that is around three-quarters female.

Despite improving gender pay equity in the sector, women of color hold the lowest-paid jobs and fewer positions of leadership compared to white men and tend to run organizations with access to fewer resources. Even with increased cost-of-living adjustments, front-line and even middle management workers across the nonprofit sector, overrepresented by people of color, remain underpaid and undersupported.

The problem lies in nonprofits’ limited budgets. Nonprofits of all sizes struggle to balance budgets amid growing demands for their services and rising operating costs. Societal conditions and public policies, often beyond organizations’ control, limit their ability to pay staff living wages.

Inflation, reduced giving, anti-aid amendments, restrictive grantmaking practices, and the end of pandemic-era investments in the sector are shrinking budgets. A recent study by the Urban Institute shows that federal funding freezes may affect 73 percent of nonprofits in the Commonwealth.

It is unclear how Gov. Healey’s proposed caps on charitable giving deduction would impact the nonprofit sector. Lessons from the 2017 Tax Cuts and Jobs Act, which similarly reformed deductions on charitable giving, suggest the governor’s proposal would weaken nonprofits and their ability to adequately compensate nonprofit staff.

The ripple effects of government policies continue to punish the already precarious state of the nonprofit workforce. A 2023 report by the Provider’s Council, Massachusetts’s largest human services membership organization, estimates that one-quarter of the state’s front-line human services positions are vacant, as high burnout rates and low wages make filling these positions impossible.

TSNE’s report shows that despite significant salary increases for direct care counselors, the median salary remained $11,000 below the state’s median wage and well short of living wage benchmarks. For dedicated workers like Cindy, even career advancement and salary increases can’t close the wage gaps driving people out of the sector.

That illustrates a tension regarding nonprofit work. On the one hand, society expects nonprofit staff—who make up 17 percent of the Massachusetts workforce—to sacrifice wages for the opportunity to advance altruistic causes. On the other hand, professionals need high enough salaries to provide for their families.

Studies show that nonprofit workers are increasingly prioritizing financial stability, resulting in sector turnover. Resourcing nonprofits so they can increase staff salaries would help attract and retain workers who provide timely delivery of high-quality services.

During the three years of working with Cindy, Bridge Forward Fund has helped her avoid eviction, afford basic needs, pay utility bills, insure the car that gets her to work, and envision a future for herself and her family. These interventions have helped Cindy continue her work in the sector supporting people in her community. But we can’t expect a system built on emergency aid alone to support the hundreds of thousands of nonprofit workers who are not being paid a living wage.

Investing in nonprofits’ workforce increases the sector’s resilience during uncertain times and, as a result, strengthens communities across the Commonwealth.

Carlos Muñoz-Cadilla is a senior associate focused on nonprofit sector infrastructure at the Boston Foundation. Luisa Peña Lyons is CEO and founder of Bridge Forward, which helps individuals and families experiencing financial hardship with multi-year financial and coaching support to propel them toward economic stability and greater wealth.

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