Employee Compensation of Nonprofit Child Welfare Agencies in New York: Crises and Strategies

Abstract

ABSTRACTWhile existing literature documents the low compensation of nonprofit human services workers, it is not well understood how managers of these organizations perceive and respond to the problem. Adopting resource dependency and competing institutional logics perspectives, we chose the New York nonprofit child welfare sector—a heavily government‐funded field—as a collective case to study these issues. Based on interviews with 17 leaders of the primary NY nonprofit child welfare agencies, we found that these agencies' employee compensation was primarily constrained by government contracts, and they were torn by conflicting institutional logics from the state, the labor market, private funders, and unions. Overall, government contracts and market competition determined worker pay, and nonprofit child welfare agencies faced labor competition not only from peer organizations, but also from the government and for‐profit sectors. With the “great resignation” atmosphere and increased cost of living intensified by the COVID‐19 pandemic, agencies were under tremendous pressure to raise worker pay. However, programs chronically underfunded by the government were incapable of providing competitive wages and were experiencing high staff turnover and vacancies. Agency leaders agreed on the need to push the government to pay programs adequately but disagreed about advocacy goals and messaging. Most leaders had reservations about aggressive collective bargaining measures such as “going on strike.” These common but attenuated labor dynamics, related managerial responses, and implications for the future of the sector are discussed, particularly in response to competing institutional pressures.