Overtime Regulations: Nonprofits Object. Don't.

Overtime Regulations: Nonprofits Object.  Don't.

The Nonprofiteer is irate (so new?) about the response of some nonprofits to the Department of Labor’s proposal to adjust overtime regulations, so workers are entitled to overtime if they make $50K a year or less. (The current ceiling is less than $24K, below the Federal poverty level.)

As reported by our indispensable colleague Rick Cohen at the Nonprofit Quarterly, many nonprofits have reacted as if the sky were falling, though the regulations exempt agencies’ income from mission-based services and don’t apply at all to those whose budgets are under $500,000.  But rather than considering the improvement this proposal will bring to the lives of their staff, a number of nonprofits have decided to oppose the change, pleading poverty and setting up a false conflict between nonprofit workers and nonprofit clients.

For years, in the absence of financial capital, nonprofits have abused human capital instead.  (Back in the day, it was the unwaged labor of women; now it’s merely underpaying them/us.)  Very few agencies have Board members who contribute as much money as their workers, when the workers’ imputed incomes (what they would have made elsewhere) are figured in.  Or, more bluntly: when the Nonprofiteer was a $50,000-a-year lawyer (yes, yes, back in the dark ages), her decision to become a $25,000-a-year Executive Director constituted a $25,000-a-year donation to the organization—more, she assures you, than any Board member thought of giving.  No, it’s not money the agency could spend elsewhere—more like a directed donation to subsidize the hiring of top-flight personnel (if she does say so herself).

Rather than kvetch about the regulations, nonprofit executives should go to their Boards and tell them: “The jig is up.  We’ve been balancing our budgets on the backs of the workers, and now we have to do it some other way—like, say, by your giving and getting more money to sustain us.”

Nonprofits are in the business of fighting poverty, not creating it.  Let’s rejoice in the Department of Labor’s decision instead of resisting it.

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    The Nonprofiteer is Kelly Kleiman, principal of NFP Consulting, which provides Board development, strategic planning and fund-raising services to charities and philanthropies. Through her consulting practice and in her guise as The Nonprofiteer, Kelly has spent the past 25-plus years helping small and mid-sized nonprofits organize themselves better and raise more money. These days she focuses especially on helping them use high-skill volunteers. Kelly is also a lawyer and freelance journalist whose reportage and essays have appeared in the New York Times, Wall Street Journal, Washington Post, Christian Science Monitor and other dailies; in magazines including In These Times and Chicago Philanthropy; in the alternative press; on websites including the Huffington Post; and on the radio, including the BBC and WBEZ Chicago Public Radio. She and her fellow "Dueling Critic" Jonathan Abarbanel present a weekly podcast of their reviews of Chicago theater at DuelingCritics.net. Earlier in her career she was dean of admissions of IIT Chicago-Kent College of Law and Executive Director of the Chicago Children’s Choir, and practiced real estate and zoning law with the firm of Rudnick & Wolfe. Kelly holds undergraduate and law degrees from the University of Chicago. She was a founding Board member of the Association of Consultants to Nonprofits and also served for 5 years on the Board of the Association for Women Journalists–Chicago. She can be reached ("Dear Nonprofiteer . . .") at KellyNFP@yahoo.com.

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