Episode 130: Are You Making a Living Wage? The Price of Giving Away Your Value
Big problems require big solutions, stipends, honorariums, and lover offerings aren't enough to get you to the finish line. Learn how to stop undervaluing your programs and role as a nonprofit leader by accepting less than living wages for the work.
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🔦 NONPROFIT SPOTLIGHT 🙌🏿
Kiasi Tech Solutions Pt. 2
👉🏿https://www.kiasitechsolutions.com/
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🚀 RESOURCES TO HELP YOU RUN A SUCCESSFUL NONPROFIT
How to Validate Your Nonprofit Idea
https://fusion.amberwynn.net/product/the-nonprofit-validation-toolkit/
Donation Request Letters
https://fusion.amberwynn.net/product/donation-request-letters/
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Podcast Transcript
Speaker 1 (00:00):
Welcome to On Air with Amber Wynn, where nonprofit leaders learn to fuse passion and commitment with proven business strategies to create long-term funding impact and sustainability. And now here's your host and resident, Philanthrepreneur, Amber Wynn.
Speaker 2 (00:20):
Hey, hey fam, it's your girl, Amber Wynn, Philanthrepreneur, and today we are going to continue my conversation about how can I phrase this about taking care of home. Today's topic is, are you making a living wage and the price of giving away your value? Right? Because there is this misconception that a nonprofit is not supposed to make a profit, which is all the way wrong. There's this expectation that people are supposed to work for free, and what ends up happening is that our people with really good intentions, love for their community. They end up broke because they're tapping into their personal accounts to fund their nonprofits, and they end up more broke than the people that they're serving. So today's topic is, are you making a living wage and the price of giving away your value? When we come back, we'll dive in. Most founders don't realize that they're more applicants than there is money.
(01:30):
This fact impacts a nonprofits fundability. Nonprofit founders should administer research on their competitors, determine if their community is oversaturated, and identify their competitive advantage before they start a nonprofit. Check out how to validate your nonprofit idea, a step-by-step guide on how to administer the research you need to validate your idea before spending hundreds of hours and thousands of dollars only to struggle to fund it. Get your copy today. Welcome back to On Air with Amber Wynn, your girl, Philanthrepreneur. Today we're talking about are you making a living wage and the price of giving away your value?
(02:11):
A lot of times people start their nonprofits thinking that there's this pot of grant money that's just going to fall in their lap, and they quickly realize that that's not the case. And so they struggle for heck, between two to 10 years, self-funding their organization, and that comes at a price, right? Number one, when I talk to my nonprofit leaders, when they're honest with me, they'll say, no, I'm not getting paid. I'm funding my nonprofit. And that's the case more than not. If you look at the IRS's website where nonprofits submit their nine 90, you'll see that over 60% of the nonprofits in this country report a budget of $50,000 a year or less. So you know that they're not generating revenue. No organization can survive off of $50,000 a year. So it's important that you make a living wage because the nonprofit burnout rate is 54%.
(03:12):
That's higher than any sector. And the reason why it's so high is because my amazing leaders are out there working their nine to fives and then working their nonprofits. They're taking their personal money to fund their organization, and they're not making living wages. If you don't get a consistent salary every year, guess what you are? You're volunteer, right? Some people say, well, if I get a grant, I'll give myself a stipend. You getting a love offering, you're getting an honorarium. That is not the purpose of a public charity. A public charity is not supposed to put you into poverty, right? And so a living wage is what you should get if you are at a regular business. A nonprofit is not supposed to hire people at poverty level. That's not the purpose, right? The purpose of a nonprofit is to take the profits and to put it back into the community.
(04:15):
That's the only difference. Outside of that, you, your staff, you should be making a living wage. So when I ask you, are you making a living wage? Because if you continue to deliver services by funding it, if you continue to deliver services by paying your staff part-time minimum wage, guess what you do? You undervalue what it is that you do. You do it for so long. People become comfortable with that and they start to expect it. And that's what's wrong with the nonprofit sector right now. So many people are running their organizations out of their pockets, supplementing those gaps that are not being filled by outside funding streams that it is now the expectation, and I for one, am not here for that. So today I am going to put out a charge to all my executive directors that you stop self-funding your organization. And I know people are saying, oh, that's easier you said than done.
(05:16):
It's because there is a roadmap out there for how to run a business. What you're running is not a business. A business means that you, my executive director, will receive living wages. You've just got to put in the infrastructure. You've just got to do what you need to do to make your nonprofit function as a business so that it qualifies for outside funding streams. The other thing I have to say is if you think your nonprofit can survive off of grants alone, you are mistaken. That is the number one mistake that most founders make thinking that they're going to start their nonprofit and run it solely off of grants. Grants should only be 35% of your budget. You should have a diverse funding streams whereby you have 10 different revenue streams, corporate sponsorships, employee giving, branding, meaning you sell your products, you should have 10 different revenue streams and grants should only be 35% of your whole entire budget.
(06:24):
If that is not your formula, if that is not the case for you, if you've been trying to fund your organization solely off of grants, that is mistake number one want. Mistake number two is trying to scrimp by with getting everything donated to you. Again, your nonprofit is a business and it has business expenses. You have to pay for salaries, you have to pay for rent, you have to pay for program materials and supplies. That is what a business is. There are business expenses. So if you think that a nonprofit is supposed to be getting fully funded from all of this outside stuff, then you are mistaken. So the first thing that you need to do is to shift your mindset and to understand that you're running a business, a business with a philanthropic purpose. Once you make that shift in your mindset, now you can start doing what it takes to build out your infrastructure so that you can qualify for these 10 streams of revenue, because people aren't going to just hand over money to a raggedy business.
(07:26):
You have to look the part. They're systems you have to put in place. They're titles that need to make sense. As a funder, I'm looking for those red flags that says, is this even a bonafide nonprofit? So if you've been making up titles, if you are the president and the CEO, I'm not going to fund you because what it means is that you don't understand that the president is responsible for hiring and firing the CEO or the executive director. I see it right there. You don't know. So why am I going to invest hundreds of thousands of dollars with you and you don't even know what you're doing? So are you making a living wage? The answer is no. How do you get to making a living wage? It's by you stepping back, right? Maybe you take off for 90 days, go on hiatus and learn what it is you need to do to run your organization.
(08:17):
The way that the IR RSS says it's supposed to be run. If you keep doing the same things the same way, then you're going to get the same outcomes. If you pause and say, okay, I am going to learn what it is I'm supposed to be doing with this nonprofit, because the more you make it up, the further away you get from running a viable nonprofit. When you make things up, a funder can tell. They can tell in your budget, they can tell in your budget narrative. They can tell in your program narrative, in your program descriptions. It doesn't look like a bonafide nonprofit. In order for you to get to a living wage, you've got to get to diversified funding streams. You need to have 10 streams of revenue coming in so that you are consistently paid every month. It starts with running a bonafide nonprofit.
(09:09):
And here's the thing. You create value. When you say to a funder, this is how much it costs to run my organization, people say it all the time, if you undervalue your programs, people aren't going to take you seriously and they're not going to pay for it. You see it in the real world, right? You're charging, you're undercharging. But those people who charge appear, people pay for it because they believe that there's value, right? If your stuff is 2,500 and theirs is 25,000, you're like, well, you would think they would pay for the 2,500. No, no, no. The value is in the perception and how do you value yourself if you continue to work for free? You're saying that there's no value in what it is that you're delivering, so I am going to encourage you to just stop with the running on this rat wheel, right?
(10:00):
Stop and say, this is the year that I am going to demonstrate my value to these funders. I'm going to get my house in order. I'm going to create a funder ready budget. My programs and descriptions are going to look like programs and descriptions with measurable goals and objectives. I am going to recruit a seasoned board because your board reflects your leadership regardless to whether you're the founder or not. A funder is looking at your board. So if you have your cousin and you've got your roommate, but they know nothing about nonprofit sector that impacts you, all of this is a part of you making a living wage. You'll never get to the point where you can secure funding consistently if your organization is raggedy. So it starts with you stopping being real about what you're putting out into this space because it matters. And people get frustrated with me when they're like, I'm doing this work, and yes, you are, but if you want somebody to invest six figures into your organization, you can't expect somebody to write you a check and your stuff look raggedy.
(11:14):
And these five, $10,000, they just keep you on that nonprofit poverty cycle. $5,000 is like $20. It goes like that. $10,000 is like $25. It goes like this. You should be bringing in six figures. You should be having contracts, and you should be getting individual donors donate to you monthly so that you have revenue coming in. And the only way that you're going to get to a living wage where you're making in your nonprofit, what you're making in your nine to five is if you create an organization that looks like a bonafide nonprofit. It's just that simple. I know you've been doing the work, but you're going to have to stop and do the work to get your house in order. And that's really what it comes down to. And I am serious about this because people get frustrated. My founders get frustrated. But the reality is, if you create an organization that looks like a bonafide nonprofit, you will start to get funding and not just grants.
(12:22):
Grants are fine, but you will get other types of funding. You will have funders come to you. I've worked with so many nonprofits where when they first started with me, they were raggedy. They were like, I'm self-funding. I'm about to close down. And it took a little time. You have to restructure, you have to reframe. And then a year later, just a year later, I'm talking to my executive director, oh yeah, we Weingart approached me and they're talking, talking, talking. And I stopped him. I'm like, did you hear what you said? A funder approached you and they stopped. And they're like, yeah. I'm like, yeah. When we first started, you were self-funding your organization. Your hair was falling out, and now you have funders approaching you. This is what happens. You go from 30,000 to 120,000 in a year. It's happened for multiple clients of mine, tripled their revenue, their salary because they got their house in order. It is unreasonable for you to believe that a funder is going to fund you when your infrastructure is raggedy. It is unreasonable.
(13:37):
It is unreasonable because a funder has to be responsible with the way that they distribute their money. They have to go back and say to their board, they have to go back and say to their investors, we gave this organization $120,000, $500,000 because that's the type of money that you need. But if they give it to you and you can't even produce a financial statement, you can't even tell them how you will show them that you made an impact, right? Measurable goals. And if you can't do that, you don't think that they're bored, that their investors are going to say, why would you even fund that organization? Because that's what they're going to say. They have to protect themselves. So if you don't come corrective, you can't give them what they need to demonstrate that you are a viable nonprofit. They are not going to fund you, and you will continue to struggle and not make a living wage.
(14:31):
So I'm going to recommend that you go to my website, www.amberwynn.net, and start the process of getting your house in order. I've got a lot of free resources on my website. The first thing you want to do is look at the 90 day calendar because it gives you the 30,000 foot view. Look at the dashboard and it tells you everything that you need to have to be a bonafide nonprofit. You don't have to guess. You don't have to question. It lays it out for you. As a matter of fact, week by week with the 90 day calendar, what you should have if you've been in existence for more than two years, ignore the week by week, but just look at what you should have in your organization in order for you to be a viable nonprofit. That dashboard, and these are free resources, you just download them, is going to tell you what you need to have to have a viable nonprofit.
(15:23):
There's absolutely no reason for you not to be making a living wage because the roadmap is out there for you. You've just got to stop spinning your wheel. Stop thinking that people are going to give you things when you don't look the part. Okay? All right. I'm off my soapbox. I know I went in hard right now, but when we come back, I'm going to answer your question on Ask Amber when we come back. Are you looking to leverage your 501(c)(3) tax exempt status to get products and services donated for an event silent auction or to support your program but aren't quite sure what to say? Get the donation request letters toolkit. It provides you with the templates you can customize to fit any request, eliminate the guesswork of what to say, how to say it, and what to offer potential donors as benefits for their donation.
(16:15):
You had no idea you should offer donors something in exchange for their donation. Did you? Offering benefits triples your response rate. Plus the toolkit comes with the donor acknowledgement form template. It's the form you give them after they donate. This toolkit has everything you need for a successful donation request. Order your copy today. Welcome back to On Air with Amber. Now it's time for your questions on Ask Amber. Today's question comes from Sylvia out of Whittier. Hi Amber. A grant writer is offering to write us a grant for 25% of the grant. Is that too much? I'm thinking maybe 10% would be better. Sylvia, it's illegal to pay a grant writer from the grant that they were not budgeted for. It is illegal. Essentially, you're stealing from the grant to pay for services that have already been rendered,
(17:05):
And that's how a funder looks at it. It's like paying the gardener from your grant. They had nothing to do with all of the negotiations, the budget that you wrote, they had nothing to do with it. You're saying, well, yeah, they wrote the grant. You should have paid them just like you would've paid your gardener for the services rendered. You're not saying to a funder that I am trustworthy, that I'm credible. What you're saying to them is, I will steal your money. Essentially what you're doing, if that grant writer is not included in that budget, then you can't use it for that. And here's the thing, if the grant writer already wrote the grant, you can't include it in the budget. And just to clarify, a funder is not going to cover the fees for a grant writer because that is a business expense. So don't even put it on there.
(17:58):
I was just being facetious. What I'm saying to you is, if a grant writer says to you, okay, I'll write this grant and you can pay me after it run from them because they are unethical, nine times out of 10, you probably won't win that grant. They're going to say, well, there's no guarantee they're making money off of unsuspecting executive directors who don't understand that it is illegal. So they probably are reaching out to 10, 15 different people getting between 2000 to $3,500 from each one of you. That's how they're making their money. You're never going to see a grant if you do, it may be a 5,000, 10,000, but it is illegal for you to pay a grant writer. Once they win the grant, they write the grant, you pay them for their services, and you keep it moving. I hope that helps, and I hope that everyone hears that.
(18:55):
And the last thing I'm going to say about that is if you cannot afford to pay a grant writer, you should not have a public charity because that is a basic business expense. It is your responsibility to be able to pay grant writers. And if you can't, then it just means you're not ready for a nonprofit. It's okay, but you need to know that. And if you're like, but I think I am, then you need to generate enough unrestricted revenue so that you can pay that grant writer. And if that's what you're interested in doing, holler at your girl. I can help you create a budget whereby you can start to generate unrestricted revenue so that you can pay a grant writer and remain legal. That's what you need to do if you have a question. Sylvia, thank you so much for your question. It is a common question, especially with brand new executive directors and founders.
(19:55):
If you have a question for me, hit me up on all of my socials. I'll be more than happy to answer your questions. Now we're moving on to my nonprofit spotlight. It's my favorite time of the episode because I get to shine a light on the individuals who are doing the work in the community, both as a nonprofit, which I really love to feature because my nonprofit leaders are always in the weeds doing the work. And it's through visibility that not only funders see you, but also your clients. But then there's also the people doing the work, like myself, nonprofit experts, contractors, consultants who are supporting you, who can help you scale. And we're on part two with our conversation with Simone of Kiasi Tech Solutions, who's talking about the types of services that she's providing. And how she actually got started was providing the services in the community. So let's take a look at part two of Kiasi Tech Solutions
Speaker 3 (21:12):
Technology is here, and technology includes tools that makes our lives easier. We can do things faster, we can get more exposure. It's really here to help us with what it is that we're trying to do. And so why then deprive yourself of the use of these tools for whatever it is that you're working on. And so I really just strive to eliminate the fears and the apprehensions that people have surrounding technology and really show them that you're not going to break your laptop or your iPad if you try this software, or if anything happens, we have ways to bring it back. So don't be afraid to explore. Because what's different about learning technology and learning other skills and other things is that the way that you really learn is by jumping in hands on and getting in there and trying to get out and figuring it out. That is how you learn the technology. And so if you're afraid to even touch the device, then you're really doing yourself a disservice. And so part of what I do is just really guide people and show them how indestructible these devices are and how it's okay to go in and explore, and then they go off on their own and learn other things once they get that first handoff into the technology world.
Speaker 2 (23:06):
And we are back. That's part two of our conversation with Dr. Simone Washington of Kiasi Tech Solutions. If you are enjoying the conversation, gone over to my YouTube channel so you can hear the entire conversation or join me for the part three and four that's coming up in the next couple of weeks. And so that's it for today's episode. If you're interested in making a living wage, this is what I'm here for. Hit me up on any of my socials, go to my website and it's www.amberwynn.net. Get some free resources, but really learn what it takes to shift your organization from a struggling volunteer led organization to a thriving nonprofit business. I have the roadmap for you. All you got to do is go check it out, invest in yourself because the world needs nonprofits right now. All right, so that's all I got for you this week. I hope you join me next week. If you enjoyed anything that you heard today, be sure to be sure, subscribe and be sure to share this episode with your colleagues in the nonprofit sector. And until next week, take care of yourself like you take care of your community.
Speaker 1 (24:24):
Thanks for listening. If you enjoyed this episode, subscribe and leave a review on iTunes. Head over to www.amberwynn.net/podcast for the links and resources mentioned in today's podcast. See you next time.
