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Minimum Wage Increase Poses Some Challenges For Nonprofits

Dana Vollmer
WCBU, Peoria Pulic Radio

Some nonprofits have had to re-envision staffing, as Illinois adds another 75 cents to the minimum wage in a ramp-up to $15 an hour. That comes as many are still grappling with the financial blow of COVID-19.

Andy Thornton is president and CEO of the Greater Peoria Family YMCA. He said today's increase will cost his organization an additional $28,000 through the end of the year.

“That’s a pretty significant impact for us, especially in that short amount of time,” Thornton said. “But we’ve planned for it. We obviously knew it was going to happen … What we didn’t have the ability to forecast for was a pandemic that was going to drastically impact our ability to operate.”

Thornton said they’ve had to make some staffing changes in the past three months--effectively shutting down member services to pivot operations to emergency child care, blood drives, and lending a hand to other area nonprofits.

Eventually, the YMCA began offering virtual fitness classes and other services, and this week welcomed people back into its facilities.

“We’ve been doing really well, but we’ve had to make some changes—and ultimately that comes down to people,” Thornton said. “How many people are employed by the organization now versus how many were before is a different number.”

Many of the YMCA’s staff members are entry level, Thorton said. Pre-pandemic, there were about 80 people on the payroll. He said all but about 10 are part time.

“Those positions are pretty fluid,” he said. “People kind of roll in and roll out of those more regularly than what we’d like. There’s a lot of expense that goes into training and education and things like that.”

He said the agency is now looking to create more full-time positions and opportunities for cross-training that will mean fewer employees, but more efficient and sustainable operations.

Becky Rossman is CEO of Neighborhood House. She said all of the agency's hourly employees, including Meals on Wheels drivers, youth education staff, and development team members, already make more than $10 an hour. But future increases are going to hurt.

The minimum wage is scheduled to go up by $1 the first of the year until it reaches $15 an hour. Come January, Rossman said, that’s going to cost her organization an extra $29,000 for six months of staffing — and likely more than $300,000 once it’s up to the full $15.

“We do think everyone is well worth it, but nonprofits—I mean even my management staff—none of us are making what you’d make in the fair market. We’re here because it’s about the mission," she said.

Rossman said finding the right mission-driven people is getting increasingly difficult as major outlets like Target and Chick-fil-A raise their wages ahead of Illinois’ schedule.

Finding ways to cover the cost of payroll increases is another challenge.

“Typically I would say through more fundraising, but the problem is we just cancelled RAGBRAI and Saddle Up," she said. "That usually gives us about $130,000 that pays for things like admin and occupancy and things that grants don’t cover.”

Rossman said they’re still hoping for a successful fundraising year, but that could be jeopardized by the pandemic.

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Dana Vollmer is a reporter with WGLT. Dana previously covered the state Capitol for NPR Illinois and Peoria for WCBU.