JUNE 2019 • LONGISLANDPRESS.COM 9
MINIMUM WAGE HIKE
UPPING NONPROFIT COSTS
The increased minimum wage is making it harder for some local nonprofits to provide services.
(Getty Images)
BY CLAUDE SOLNIK
Long Island’s nonprofits help many
of the region’s most vulnerable populations,
from the homeless to those
with disabilities. So when New York
State decided to hike the minimum
wage, some people served by local
nonprofits started earning more.
Groups typically see that as good
news. But something else happened:
Nonprofits themselves sometimes
face higher costs due to the hike.
Groups in general want employees to
make a higher minimum, but employers
also want to make sure they are
reimbursed if their costs rise — and
that often is not the case.
“Of course, we want our communities
to be able to earn a living wage,” says
Rebecca Sanin, president and CEO of
the Health and Welfare Council of
Long Island, a Melville-based umbrella
agency for hundreds of nonprofits.
“And there’s value in increasing the
minimum wage.”
As minimum wages rise statewide,
Long Island’s rose to $10 an hour at
the end of 2016, $11 at the end of 2017
and $12 an hour at the end of 2018. It’s
slated to hit $13 at the end of this year,
$14 at the end of 2020 and $15 at the
end of 2021.
The other side of the proverbial coin
means some nonprofits pay more —
while not necessarily receiving more
as contracts remain flat.
“The challenge is when you talk about
nonprofits with hourly employees,
perhaps childcare providers and other
folks,” Sanin says. “They could be significantly
impacted when there’s an
increase in wages, but not contracts.”
Stanfort Perry, executive director of
Brookville-based AHRC Nassau, leads
a group which, including affiliates,
employs 3,200 and has a budget of
more than $220 million.
“Because we rely on government
funding for our survival, we cannot
raise the price of the services we
provide,” Perry says. “We rely on government
and legislators to pass bills
that fund appropriately the services
for the neediest folks on Long Island.”
Groups that pay more than minimum
wage in some cases are reimbursed at
minimum wage, so a hike in minimum
means they’re reimbursed more. But
contracts often span multiple years
without mechanisms to make adjustments
based on rising wages.
“Government contracts need to reflect
that wage increase,” Sanin adds.
Nonprofits have to find other ways
to make up for shortfalls, possibly
ramping up donations.
“It puts a significant burden on the
need to fundraise for additional
dollars,” Sanin says. “Organizations
already are working on tight
budgets.”
LI nonprofits face other challenges
since the region’s “demographics
have shifted dramatically,” Sanin
says, changing the mix of services
needed.
“We are continually getting increases
in the cost of health insurance,
general liability coverage, workers
compensation, utilities,” Perry, who
would like to see cost of living increases
built into agreements, adds.
“Those costs continue to go through
the roof.”
At the same time, some contract
amounts decrease, putting pressure
on bottom lines.
“You make adjustments as necessary.
Many agencies have to lay off people,”
Perry says, noting his has not. “Agencies
are merging, because they can’t
stand alone to provide services.”
Volunteering remains a key component
in the nonprofit mix. The New
York State Department of Labor notes
nonprofits’ “volunteers, students,
trainees, or learners/apprentices”
often are exempt.
Low unemployment can make it
tougher to recruit qualified workers,
Perry adds. And the cap on state and
local tax deductions impacts donors
and those in need.
“A very significant amount of folks
owed money for the first time in their
lives or had reduced refunds,” Sanin
says. “Traditionally their family had
relied on those to catch up with bills.”
Nonprofits continue to extend a safety
net, helping those in need and, in
most cases, meeting their own needs,
although they want to make sure that
as mandates increase, payment keeps
pace.
“We find a way,” Perry says. “We work
with government as our partners to
make sure we continue to grow and
develop new opportunities.”
IN THE NEWS
“Government contracts need to
reflect that wage increase,”
says Rebecca Sanin.
/LONGISLANDPRESS.COM
