Part 1: The Burnout Crisis: Why "Mission First" is Failing the Nonprofit Workforce

I often hear a similar refrain from nonprofit executive directors: "I am getting bogged down by increasing administrative tasks, and am able to spend zero hours on our mission." It’s a heartbreaking reality. Charitable nonprofits are the bedrock of our community’s health and democracy. Yet, for decades, many of these organizations have served their missions at the expense of their most valuable asset: their people.

The Cost of the "Charitable" Discount

For too long, the sector has operated under the unspoken rule that doing good work justifies subpar wages and anemic benefits. But the "charitable discount" is starting to cost us too much.

When we offer benefits that don't compete with the private sector, we see a predictable result:

• Talent Drainage: Our best and brightest are forced to seek "greener fields" in government or philanthropy just to afford healthcare.

• Stagnation: High turnover leads to a loss of institutional knowledge and a constant cycle of rehiring and retraining.

• Executive Burnout: Leaders are bogged down by the "public benefit business" and the administrative weight of accounting, record-keeping, and complex technology infrastructure.

  
  

The Administrative Weight

Nonprofits fail for many reasons, but a primary culprit is a lack of capacity. The burden of running a corporation is immense. When a leader is drowning in the compliance and accountability requirements of employment and finance, they aren't leading their community; they are managing a spreadsheet.

In Oregon alone, nonprofits employ over 245,000 workers, which is roughly 10.5% of the state’s workforce. We are an economic powerhouse, yet we often lack the economies of scale that allow for-profit corporations to provide high-end HR and benefits at a lower cost.

A New Question for the Sector

During my three-year research project for the Nonprofit Association of Oregon (NAO), I started with a fundamental question:

What if nonprofits didn't have to address pay and benefit gaps individually? What if we could bring organizations together to run the "business side" of the equation collectively?

If we could free up the minds and hands of talented leaders, we could return their focus to the work they actually care about.

The journey to find that answer wasn’t easy. It involved navigating complex state regulations, facing rejection from insurance carriers, and uncovering some uncomfortable truths about how the insurance industry views nonprofit employees.

In my next post, I’ll pull back the curtain on the "why" behind these struggles, including the demographic data that makes insurance carriers so hesitant to partner with our sector and the specific setbacks we faced during our feasibility study.

The North Starr Takeaway: We have to stop treating "mission-driven" as a substitute for "well-compensated." When we provide subpar benefits, we are effectively asking our staff to subsidize our programs. Sustainability starts with the realization that the "business side" of your nonprofit must be as professional and efficient as your programs.

To find out about the entire journey and read the white paper in its entirety, go to the Nonprofit Association of Oregon’s website.