Get Ready, Here It Comes… Increasing the Minimum Wage

On September 1, 2014, Michigan’s Workforce Opportunity Wage Act, Public Act 138 of 2014, will go into effect. The new Act will increase the minimum wage for workers in the state from $7.40 to $8.15 per hour.

In Michigan, one out of 11 workers are employed by nonprofit organizations. Many employees of Michigan Nonprofit Association member organizations are paid at the minimum wage. We also know that nonprofit organizations in Michigan and across the country provide many valuable services and support to Americans who are living in poverty, including the “working poor.”

Nonprofits in the state directly employed 438,000 individuals in 2013. Together the nonprofits in Michigan pay their employees over $4.9 billion per quarter. Our members have weighed in on both sides of the debate around raising the minimum wage.

The minimum wage increase is a policy that will have significant impact for our member agencies and for the state. While our nonprofits provide valuable services, many operate as lean small businesses. And just like small businesses across the country are grappling with the impacts of a minimum wage increase, so will our nonprofits in the coming weeks and months. The key thing to remember is that the debate is over.  Starting in September, nonprofits, along with small businesses and large corporations will be expected to raise the minimum wage payments for their hourly workers.

Wherever you personally weigh in on the issue of an increased minimum wage, as a nonprofit with employees, this increase will initially impact your bottom line. And it will require lots of planning and reviewing as a part of the sustainability for many of your organizations.

Many of you have already begun your strategic planning to address the financial implications that this increase may have on your budgets, staffing and reimbursement levels for direct services. There is no question that the increase in wages will require an increase in revenues and donations, much in the same way that small businesses will have to think strategically about creating more revenue to support the wage increase. We will continue to revisit this subject and share with you some of the strategies that your colleagues are implementing in the field to make this a seamless win-win.

For information and questions on compliance, contact Michigan’s Department of Licensing and Regulatory Affairs (LARA) at http://www.michigan.gov/lara/0,4601,7-154-61256_11407_32352-140972–,00.html. Organizations seeking professional assistance can search MNA’s Consultant & Resource Directory for companies that specialize in accounting & auditing or human resources for nonprofits. The Consultant & Resource Directory is available at http://mnaonline.org/consultantsearch.aspx.

 Submitted by Donna Murray-Brown, President & CEO, Michigan Nonprofit Association

MNA President & CEO Donna Murray-Brown on the Impact of the Government Shutdown on Nonprofits

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When the federal government shut down last Tuesday, no one ever thought it would be shut down for more than a couple of days.  As we go into the second week of the shutdown, there has been great impact to the nonprofit sector’s ability to do their work.  Nonprofits are experiencing increased demand for services, stalled payments on government contracts, inability to conduct routine data inquiries, uncertainty of how to engage with their AmeriCorps members, and difficulty in their continued ability to employ staff.

With nearly 30% of nonprofits receiving revenues from government contracts, stalled payments from government contracts are placing a huge strain on nonprofits to meet the needs of their communities while keeping their doors open.  Additionally, the impact of sequestration, a fragile economy, and now thousands of government employees suddenly without income, nonprofits are becoming further strained in fulfilling their missions.

Simple daily activities such as internet searches for data and information on government websites are now impossible due to the shutdown rendering the websites inoperable. The U.S. Census Bureau, one of the “go to” websites, is no longer available to assist a nonprofit in gathering key demographic information to make decisions on every day work, future planning, and creating strategy.

Many nonprofits leverage national service programs to build capacity or provide direct service to those they serve.  Just last week, the Corporation for National and Community Service informed AmeriCorps members across the country they are required to serve during the shutdown, but without any compensation.  AmeriCorps members already receive a modest stipend for their service and, as a condition of their service commitment, are not able to hold a second job while serving.  This has become problematic for national service members because they find it increasingly difficult with each day of the shutdown to feed themselves and pay for housing.

As the days and weeks of the government shutdown continue, the aforementioned challenges will only become greater.  Nonprofits must brace themselves for additional trials and the reality of making painful decisions that may compromise the quality of their programs and services.  Decisions such as whether to buy much needed supplies and equipment, whether to forego important training and professional development, and ultimately, making decisions pertaining to staffing.

Making a decision regarding staff may become a reality for some nonprofits heavily reliant on government funding.  Understanding your legal options is key to making the best decision during this time of uncertainty.  Nonprofit HR, an organization providing guidance to nonprofits on Human Resources related topics and issues, is a great source for nonprofits faced with making decisions regarding staffing. Visit their website at http://www.nonprofithr.com/wp-content/uploads/2013/09/Legal-Considerations-in-Layoffs_final_2013.pdf.

If you are experiencing challenges linked to the government shutdown either similar or dissimilar to that I have highlighted, I want to hear from you.  Please email me directly at dmurray-brown@mnaonline.org.

Donna Murray-Brown Submitted by Donna Murray-Brown, President & CEO, Michigan Nonprofit Association

Donna Murray-Brown – Detroit Bankruptcy: What’s the Impact to Nonprofits?

It was July 18th- I will always remember where I was the day Detroit filed for bankruptcy.  I was on business in Sault Ste Marie and remember feeling helpless because I was so far away from my hometown when I heard the news.  While I wasn’t surprised, I was saddened by the news initially because it gave the city of Detroit yet another undesirable distinction: largest municipality to file for bankruptcy.  Later, I remember the sense of anxiety I felt thinking about what this meant for the hundreds of nonprofits serving the needs of those in and around Detroit. What would the impact be of such a drastic and bold measure?

I immediately began doing a bit of research about the impact to nonprofits after the Jefferson County, Alabama filing and then the Stockton, California filing. Although these municipalities filed for bankruptcy, the scope and size of their debt was not comparable to Detroit’s $18 billion in debt.  I spoke with nonprofit leaders in state and out of state to get their opinions regarding their thoughts of what I should be concerned about.

Some of the things I was asked to consider were very logical, such as, if the city of Detroit is not able to pay it debtors, they may rely more heavily on the nonprofit sector to deliver more services than before.  This could be devastating for the sector which has already stretched itself thin from the demand in services from a high unemployment rate, the fallout from foreclosures and the reduction of city services over time.

Then there was learning more about the unsecured creditors.  Were there any nonprofits listed as unsecured creditors?  Detroit Economic Growth Corp was listed as a creditor for roughly $20 million of the debt.  I was certain there were many more nonprofits that were creditors that paled in comparison to the amount owed to DEGC, but would suffer still the same without payment from the City of Detroit.

Over time, things became a bit more complicated, when there were talks about seizing art from the Detroit Institute of Art to satisfy bad debt.  While this might be a viable option for generating cash for a cash-strapped city, it raised more anxiety about the scope of how deep and wide the filing of bankruptcy could be.  At the moment the assets of the DIA seem protected, however, the very threat of such an impactful asset to the community is enough to take the wind right out of its sails.

Being a statewide, nonprofit member-based organization, I was afforded the opportunity to survey members serving residents in the City of Detroit.  I was also able to ascertain some insight to nonprofits that contracted with the city of Detroit for Community Development Block Grant dollars which were unsecured creditors with no real means to extract their funds from the City to keep their programs and services intact.

I learned there was quite a bit of anxiety around the notion of difficulty associated with retrieval of CDBG dollars owed to the organizations.  Additionally, there was a need to advocate on behalf of the nonprofits who are unsecured creditors but may not have legal counsel on staff or available to them to attend the bankruptcy hearings and state their claim.

The prospect of having federal funds not being activated because the city is going through this process seems counterproductive to the outcomes the Emergency Financial Manager seems to be striving for.  While the financial challenges of the city are overwhelming, we in the nonprofit sector realize there needs to be a stronger partnership between public, private, and nonprofit sectors to reach a sustainable city.

So over the next several weeks, I plan to dig deeper and attempt to connect, with the help of others, with Kevyn Orr and his team in earnest.  My specific goal in doing this is to position the nonprofit sector as a partner, one that is used to adversity and has creative ideas to solve some of the challenges the city is facing.  This isn’t just a good thing to do, it is a more efficient and cost effective way of addressing a better financial path for the city.

There seems to still be a window of time to create a partnership that realizes everyone’s goals: a thriving, financially solvent Detroit.

ImageSubmitted by Donna Murray-Brown, President & CEO, Michigan Nonprofit Association

MNA’s tour of Detroit with D:hive

On June 28, 2013, Michigan Nonprofit Association staff toured the City of Detroit with D:hive for a professional development day. The tour gave the staff a chance to get together and learn about Detroit, its communities, and how MNA can better serve its constituents in and around the city. It also provided staff a chance to collaborate and communicate in a new and different way outside of the office.

The day began at the offices of MNA affiliate Data Driven Detroit, also known as D3. D3’s offices are located in TechTown in downtown Detroit.

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From D3’s office, we boarded a bus and headed out to the D:hive office. D:hive operates out of a storefront in the Central Business District of Downtown Detroit and acts as a welcome center for the city.

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The office is loaded with great items like a storefront within a storefront for rent to fledgling businesses, a huge map of the city, and a chalkboard where people write their wishes for the city.

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From D:hive, we took in some of the sights of the city, stopping to check out the incredible decor of the Guardian building.

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The Guardian building is just one of the many gems of Detroit’s downtown area. D:hive also took us past Campus Martius (which is very close to MNA’s Detroit office) where there are frequent lunch concerts, art displays, and even a makeshift beach!

Later on the tour, we drove past the iconic Renaissance Center and statue of the fist of Joe Louis to the Detroit RiverWalk and Rivard Plaza. At the Plaza, we were treated to the sight of a massive sand sculpture, which made for quite the view with the RenCen in the background.

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Around noon, we passed by Earthworks Urban Farm. The farm is a program of the Capuchin Soup Kitchen, which is sponsored by MNA members The Province of St. Joseph of the Capuchin Order, and which operates on the land of another MNA member, Gleaners Community Food Bank. It was a great example of the type of urban agriculture that is popping up all over the city.

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One of the most interesting stops on the tour was the Heidelberg Project. This community art project is unlike anything else I have ever seen. Entire houses have been transformed into works of art, with found art sculptures in the yards between, made out of various items left and dumped in the surrounding areas. MNA staff listened as Executive Director Jenenne Whitfield explained the project and the impact it has had on the participants and residents of the community.

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At the conclusion of our tour, we had lunch at Traffic Jam and Snug in Midtown, before taking a moment to visit some of the surrounding stores in this vibrant commercial district.

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Other sights on our tour included New Center, Historic Indian Village, Eastern Market, and many more.

All in all, it was a wonderful opportunity to see what Detroit has to offer, what some of the area’s nonprofit organizations are up to, and what MNA can do to better serve the Detroit area. Big thanks to D:hive Detroit for the fantastic tour!

Terry StreetmanSubmitted by Terry Streetman, Membership & Advocacy Coordinator, Michigan Nonprofit Association

A note from MNA President & CEO Donna Murray-Brown

Charitable giving incentives have been a strong vehicle to support the work of nonprofits serving communities across the country.  While we were not successful in retaining the charitable deduction in Michigan, we know there has been an adverse impact to the level of giving received since its elimination.  It is imperative we advocate protecting charitable giving incentives at the federal level. 

Congress has taken a “blank slate” approach to tax reform, and will analyze everything to arrive at a comprehensive set of reforms including consideration of reducing or eliminating incentives for charitable giving.

The following blog titled “The Lab Results Are in on Tax Reform,” is an opinion piece written in support of the charitable giving incentive that was published in a recent The Hill e-communication, a publication widely read by congressional and White House staffers. The blog gives an inside look at the work of key states advocating for charitable giving incentives and strongly suggests the impact of these incentives on the nonprofit sector and the services they provide in communities.

Please take some time to read, share and educate our law makers, media and networks about this very important topic.

ImageStatement by Donna Murray-Brown, President & CEO, Michigan Nonprofit Association

Statement from MNA President & CEO Donna Murray-Brown on the impact of Detroit’s bankruptcy filing on the nonprofit sector.

Below is a statement from MNA President & CEO Donna Murray-Brown on the impact of Detroit’s bankruptcy filing on the nonprofit sector. A longer statement will be forthcoming.

Donna Murray-Brown, president and CEO of the Michigan Nonprofit Association,  sees the bankruptcy as an opportunity “for not just nonprofit organizations but residents to really create the next Detroit” , Although Murray-Brown acknowledged that the demand for services will probably continue to rise, she’s optimistic. “Nobody wanted to be here, it’s a scary thing to be in a city that just filed for bankruptcy, but it’s also an opportunity,” she said. “Kevyn Orr wants to maintain services to residents. This is a time not to acquiesce but to be proactive and figure out the best role for nonprofits.”

Donna Murray-Brown

Statement by Donna Murray-Brown, President & CEO, Michigan Nonprofit Association

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