Equipping nonprofits to advance social change

Understanding the Next Generation of Nonprofit Employees: The Impact of Educational Debt

A study conducted for The Building Movement Project by Amanda Ballard.

Educational debt rates have skyrocketed in the past decade, raising concern that educational debt will deter graduates from public service careers.  However, the findings presented in this report tell a remarkably different story about debt and graduates who choose to enter public service in the nonprofit sector. It is a story about an extraordinarily dedicated workforce drawn to the sector by non-monetary rewards, but who are struggling to meet growing financial responsibilities with significantly lower salaries than their classmates entering the private sector or government.  This generation of graduates enters the nonprofit workforce with greater financial obligations than any previous generation.  The strong majority of graduates entering the nonprofit sector are burdened with educational debt, which forces graduates to stretch low salaries even further.

The findings suggest that younger workers are drawn to the sector for non-monetary rewards and are fairly unresponsive to changes in financial circumstances.  While this is encouraging news for nonprofit employers trying to recruit graduates to enter the sector, it raises concerns about the retention of younger workers.  More research is needed to assess the impact of educational debt on turnover rates among younger workers.

(© 2005)

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