Dear California foundations and foundations that fund in California:
The California Association of Nonprofits -- CalNonprofits -- is a statewide policy alliance of 9,400 nonprofits that both advocates for the nonprofit community to government, philanthropy and the public, and provides important support to nonprofits such as employee health insurance. With offices in San Francisco, Sacramento and Los Angeles, CalNonprofits welcomes comments and suggestions on this Open Letter as well as all aspects of our work.
On January 1 of 2016, California’s minimum wage will be raised to $10.00 per hour: an 11% increase. In some cities and counties it will rise even higher. We were glad to see that many California foundations supported these increases by funding activists and advocates seeking increases to help working people living in poverty. And many more cheered the increases informally.
CalNonprofits also supports increases to the minimum wage. At the same time, we insist that nonprofits need to be brought into implementation discussions and have certain accommodations to allow for renegotiation of government contracts. (You can see our position here.)
Now we are calling on California foundations to make Minimum Wage Transition Grants to their grantees as a component of supporting both minimum wage increases and nonprofit sustainability.
Although nonprofits universally want to pay above minimum wage, many nonetheless have minimum wage staff — often those in childcare, meal delivery, senior lunch programs, eldercare, after school services and at large arts institutions. If such a nonprofit, for example, has just five full-time employees at minimum wage, on January 1 its budget will need to increase by $12,000, a significant hit to a small nonprofit. Larger nonprofits could see their expense budgets surge by $50,000, $100,000 or even more.
If the foundation where you are a staff member or trustee has grantees in human services in vulnerable or disadvantaged communities or at large arts institutions, your grantees are likely to have some or perhaps many minimum wage staff. These grantees need your help over the next few years as minimum wage increases take effect. Nonprofits want to pay even more than minimum wage — but we depend on support from you and our communities to do so.
We urge you to consider making Minimum Wage Transition Grants to give grantees more time to scale up fundraising activities and make other changes to enable them to afford their increased staffing budgets. By making, for instance, $10,000 and $50,000 grants to current grantees, you will be boosting the sustainability of nonprofits that are already your trusted partners. If your typical grant size is around $10,000, consider making $1,000 or $2,000 transition grants.
Making Minimum Wage Transition Grants to your grantees is another way to reflect the values that lead your foundation to its work supporting vulnerable people. At the same time you will be strengthening the nonprofit ecosystem that binds our communities together.
We encourage discussion and debate on this topic. We welcome your comments on our website, and please don't hesitate to contact us directly as well.
Sincerely,
Geoff Green, Chair, CalNonprofits Board of Directors
Jan Masaoka, CEO, California Association of Nonprofits (CalNonprofits)
