Testimony of Joanna Blotner, Director of Government Affairs, on behalf of the Coalition for Nonprofit Equity before the Committee on Public Works and Operations

April 22, 2024
Testimony
Person Testifying: Joanna Blotner
Title: Director of Government Affairs, DC Action
Testimony Heard By: Committee on Public Works and Operations
Type of Hearing: Budget Hearing

Good morning Chairperson Nadeau and staff of the Committee on Public Works and Operations. My name is Joanna Blotner and I am the Director of Government Affairs at DC Action. DC Action uses research, data, collective action, and a racial equity lens to break down barriers that stand in the way of all kids reaching their full potential. We also convene four coalitions composed predominantly of nonprofit direct service providers (the Home Visiting Council and the Under 3 DC, Out-of-School-Time, and Youth Economic Justice and Housing Coalitions) and we serve on the Steering Committee for the DC Coalition for Nonprofit Equity. I am testifying today on behalf of the Steering Committee of the Coalition for Nonprofit Equity.

The Coalition believes that community-based nonprofit service providers are critical players in combating the effects of poverty on children, youth, and families and are important partners to the DC government in fulfilling the District’s duty to its residents. We are grateful to the Council and Mayor for passing the Nonprofit Fair Compensation Act of 2020 (L23-185; D.C. Official Code § 2-222). This was a critical step forward in recognizing the true costs that nonprofits take on when providing services for District residents through DC government grants and contracts.

However, while the law became effective in March 2021, three years later it is still not being consistently or fully implemented. Due to lack of payment for true costs, nonprofits face a loss every time they accept a DC grant or contract. Organizations are then left scrambling to fill the gaps with other sources of revenue, often private philanthropic grants that are not long term. This is putting nonprofit service providers in a perilous position, with many being forced to consider cutting services, staffing, and more in order to partner with the District as a service provider. This is not only harming the District’s nonprofit partners, but it is also causing very real harm to District residents by putting critical services at risk.

Years of not having true costs covered, flat funding, and increasing costs – all amidst increasing need for social services – have created an untenable situation for nonprofits, and this cannot continue. Action and funding is needed now to bolster the work of District nonprofits and the nonprofit workforce. The average nonprofit salary in DC is $44,000, indicating that they are “asset-limited, income constrained.” By contrast, to live comfortably in the Washington region, a single individual (without children) must earn at least $76,194, as of 2023, and to live within the District’s boundaries can increase an employee’s cost of living expenses significantly. In a recent study by the National Council of Nonprofits, 45% of nonprofit employees reported they were thinking of leaving their jobs because they can’t afford to stay.

If we wait any longer to fully fund this Nonprofit Fair Compensation law, the nonprofit workforce will be decimated and will not be able to perform the critical services that our community needs. With more than one fifth of Black District residents living below the official poverty measure and current violence unprecedented since the 90s, this is no time to let the foundation of our community services crumble.

The District was a leader in passing the Nonprofit Fair Compensation Act yet is now failing to enact the law they passed. If the nonprofit sector is to survive, keep and train talented staff, and continue to provide the quality services that residents deserve, the sector must be treated equitably and fairly. Paying the true operating costs – on top of direct service costs – is the first step in that direction.

We are requesting that the Office of Contracting and Procurement take the following actions to effectuate the full implementation of the law:

  • Ensure that indirect costs are to be paid in addition to direct costs for all non-profit contract agreements executed by OCP.
  • Ensure regular and ongoing training for contracts officers in OCP and across all District agencies to improve full and consistent compliance with the law.

The Office of Contracting and Procurement has been a leader in recent months in ensuring that RFPs released include the language of the law. This is an important step forward, and taking the above actions will move OCP and the District closer to full implementation – and eventual full funding – of the law. This law supports the livelihood and workforce challenges of the nonprofit sector, the very workforce which supports vulnerable populations across DC. Included in my written testimony are supplemental materials detailing the District’s noncompliance with the law and the risks associated.

Thank you for this opportunity to share feedback from the Coalition for Nonprofit Equity and I am happy to answer any questions.