Boston Foundation report surveys the state of employee benefits in Massachusetts’ nonprofit sector

Boston – The Boston Foundation today released new research on the nonprofit sector that offers a first-ever examination of the state of employee benefits. It was designed to create benchmarks for the sector that identifies the types and costs of employee benefits. The report, entitled For the Benefit of Our Workers: The Massachusetts Nonprofit Employee Benefit Study , was released at an  Understanding Boston  forum held at the Boston Foundation.

The report comes at a time when the global economic crisis has placed great strain on the sector, which employs approximately 14 percent of the state’s workforce, and which contributes significantly to the web of support systems that hold fragile families together, supply basic needs to thousands of individuals, and helps define the quality of life for Commonwealth residents in good times as well as in times of crisis.

“The research findings in this report help us to better understand a critical sector of our economy,” said Paul S. Grogan , President and CEO of the Boston Foundation. “Our hope is that it will catalyze a new conversation about how we as a society can provide equitable compensation for workers who serve our communities so well.”

The report was written by Elizabeth Keating , Visiting Assistant Professor at the Carroll School of Management, Boston College. It is published by the Foundation with additional funding provided by Braver PC, a financial services firm headquartered in Newton, and the Massachusetts Nonprofit Network, the state-wide association of nonprofits.

The report, which surveyed a total of 649 nonprofit organizations, found a great disparity among access to benefits based on the size of the organization for which an individual employee worked. The organizations were grouped according to categories developed in the Boston Foundation report Passion and Purpose: Raising the Fiscal Fitness bar for Massachusetts Nonprofits , published by the Boston Foundation in June, 2008.

The largest organizations, labeled Economic Engines have annual budgets of $50 million or more and typically provide comprehensive benefits. These include the region’s colleges and universities, hospitals and as major cultural institutions. Safety Net Organizations, mid-sized nonprofits with budgets ranging from $250,000 to $50 million, offer a more mixed assessment. Because they typically compete for professional staff, about 90 percent of organizations at this level offer health insurance and retirement benefits. Dental, life and long-term disability benefits are offered by half of the organization s in this category. At the other end of the spectrum, only half of the state’s so-called Grassroots Organizations, with budgets of less than $250,000, offer health care benefits. Some of these employees are believed to have access to health care through a spouse. The provision of other benefits was even sparser. Fewer vacation days, less dental insurance and less long-term disability were the rule.

High cost was the most significant impediment to extending benefits. Small organizations—some nonprofits have as few as one employee—pay significantly more for coverage than large nonprofits. In addition, other important predictors of benefit coverage included the sector to which a specific nonprofit belongs and the region of the state in which it is located.

The road ahead

The combined information provided by this report and the prior survey of the sector were designed to create a platform for analysis and reform. Currently, a task force supported by the Blue Cross Blue Shield Foundation of Massachusetts is developing a matrix of improved health care options for nonprofits to consider. This is expected to be completed later this year. In addition, the Massachusetts Nonprofit Network is working with the Treasurer of the Commonwealth to pass legislation that would assist in managing retirement plans and funds for nonprofit employers, drawing on best practice models developed elsewhere in the country.

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The Boston Foundation, Greater Boston’s community foundation, is one of the oldest and largest community foundations in the nation, with assets of $763 million.  In Fiscal Year 2008, the Foundation and its donors made close to $79 million in grants to nonprofit organizations and received gifts of $113 million. The Foundation is made up of some 900 separate charitable funds established by donors either for the general benefit of the community or for special purposes.  The Boston Foundation also serves as a major civic leader, provider of information, convener, and sponsor of special initiatives designed to address the community’s and region’s most pressing challenges.  For more information about the Boston Foundation, visit www.tbf.org or call 617-338-1700.