Income Inequality in Nonprofits

2016-03-30 09.09.10
Amanda Neumann

Economic inequality is a major problem. There are studies upon studies and articles upon articles that discuss the different facets of economic inequality.

Income inequality, one type of economic inequality, refers to the extent to which income (not necessarily wealth) is distributed in an uneven manner among a population.

How can nonprofit organizations help solve income inequality from within?

Nonprofit Quarterly published an article centered on how nonprofits can, at the very least, avoid mirroring practices that perpetuate inequality.

  1. Nonprofit employees should be paid a livable wage, sufficient to afford adequate shelter, food, and the other necessities of life.
  2. Executive compensation should be reasonable and proportionate within the organization’s structure.
  3. Nonprofits should consider capping their pay and publishing their pay ratios.
  4. The civic voice of a nonprofit organization should be applied broadly to advance the organization’s mission and the people it serves, not narrowly used to protect its parochial interests in its own program and revenues.
  5. Governance responsibilities should be broadly shared, not closely held, by recruiting board members who represent the organization’s constituents.
  6. Each organization should assess the ethnic and racial diversity in its leadership as well as elsewhere inside the organization.
  7. Each organization should assess its own equality footprint to examine whether the net effect of its actions increases, decreases, or has no effect on the equality of conditions.

When considering economic inequality, it is important to remember that all inequality is connected. The nonprofit sector must stand to keep equality as a core principle and organizations must take initiative to ensure they do not contribute to, or exemplify, the problem of income inequality.

Questions to Consider:

Is your organization ensuring that all employees are being paid a livable wage that is commensurate with their duties?

Does your organization take the cost of emotional labor into consideration?

Does your organization have pay transparency?

Does your organization have a way to measure its commitment to equality?

Sources & Resources
Not Adding to the Problem: Seven Ways Your Nonprofit Can Avoid Mirroring Practices That Perpetuate Inequality via Nonprofit Quarterly
Fighting Income Inequality Should Be Top Nonprofit Priority via The Chronicle of Philanthropy
Economic Inequality: It’s Far Worse Than You Think via Scientific American
20 Facts About U.S. Inequality that Everyone Should Know via Stanford Center on Poverty and Inequality

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