Multnomah County briefing spotlights nonprofit wage gap and recommends contract reforms

Multnomah County commissioners heard data and policy recommendations on Wednesday aimed at narrowing a persistent wage gap in the nonprofit human‑services sector.

The Nonprofit Association of Oregon presented a study, summarized by Echo Northwest economist Kevin Cahill, that compared nonprofit wages, turnover and workforce characteristics to those in the public and private sectors. Cahill said the nonprofit sector employs about 10.4 percent of Oregon’s wage and salary workers and reported substantially higher turnover: roughly a third of nonprofit workers left the sector within 18 months in the study’s sample. After controlling for occupation and worker characteristics, the analysis found nonprofit workers earned between about 5 percent and 15 percent less than comparable workers in the for‑profit sector and about 11 percent less than public‑sector counterparts. Cahill described the gap as “evidence of wage suppression.”

The Nonprofit Association of Oregon urged policy changes that would put more resources into contracts. Jim White, NAO’s executive director, told the board the most effective approach would be adding a cost‑of‑living adjustment (COLA) to government contracts and grants so reimbursements keep pace with operating costs. White said other options include creating workforce‑standards boards or a prevailing wage for nonprofit providers, but warned those approaches would be costly and require multi‑payer coordination.

Speakers from the Modernizing Grant Funding and Contracting Task Force — Mercedes Elizalde of Latino Network and Felicita Montablanca of Northwest Health Foundation — recommended aligning indirect‑cost allowances with the Office of Management and Budget’s de minimis (the federal guidance being adopted by some funders), tracking and penalizing late payments (they proposed a 5 percent penalty mirroring public practice), offering advanced quarterly payments, and standardizing contract language to reduce negotiation friction. Elizalde said inconsistent indirect rates across county departments “create financial insecurity” and slow program scaling.

County staff described local steps already under way. Travis Graves, interim chief operating officer, said a county pilot comparing job matches found county classifications often have higher maximum pay than equivalent nonprofit roles. CFO Eric Cariano and purchasing manager Brian Smith outlined planned and implemented changes: a county‑wide grant policy framework, a contracts administration manual, expanded technical assistance for community‑based organizations, a county invoice‑intake monitoring process intended to meet payment terms more than 90 percent of the time, and a de minimis threshold to avoid holding up small payments. Cariano said recent rebasing work in the joint office of homeless services had allocated “a little more than $3,000,000” to about 15 providers as part of a phased approach.

Board members pressed staff on practicalities. Commissioner Stegman asked when services should be performed in‑house versus contracted out and stressed equity concerns, saying many nonprofit staff who perform front‑line work are women and people of color. Commissioner Broom Edwards requested county‑level comparisons and cost estimates for implementing recommendations; staff said the NAO study was statewide and that a county‑level, statistically adjusted analysis would be more limited but descriptive data could be produced. Several commissioners urged mapping the service landscape, quantifying budget impacts, and aligning living‑wage policy decisions across categories of contracted work.

Commissioner Jesse Beeson closed by urging a shift from treating community‑based organizations as vendors to treating them as partners and suggested exploring sectoral bargaining or workforce standards boards as long‑term tools. The board signaled interest in follow‑up analysis and written answers to outstanding questions.

The county received the report and did not take a formal vote at the briefing; staff offered to provide further data and budget projections in writing and to return with implementation options.