Legislature(2023 - 2024)BELTZ 105 (TSBldg)
01/30/2023 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
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| Start | |
| Presentation(s): Workforce Overview from the Nonprofit Perspective | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
January 30, 2023
1:33 p.m.
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Click Bishop, Vice Chair
Senator Elvi Gray-Jackson
Senator Kelly Merrick
Senator Forrest Dunbar
COMMITTEE CALENDAR
PRESENTATION(S): WORKFORCE OVERVIEW FROM THE NONPROFIT
PERSPECTIVE
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
LAURIE WOLF, President and CEO
Foraker Group
Anchorage, Alaska
POSITION STATEMENT: Gave an overview of the nonprofit sector in
Alaska.
ACTION NARRATIVE
1:33:18 PM
CHAIR JESSE BJORKMAN called the Senate Labor and Commerce
Standing Committee meeting to order at 1:33 p.m. Present at the
call to order were Senators Dunbar, Gray-Jackson, Merrick,
Bishop, and Chair Bjorkman.
^PRESENTATION(S): WORKFORCE OVERVIEW FROM THE NONPROFIT
PERSPECTIVE
PRESENTATION(S): WORKFORCE OVERVIEW FROM THE NONPROFIT
PERSPECTIVE
1:34:08 PM
CHAIR BJORKMAN announced that Lauri Wolf from the Foraker Group
would give a presentation. It is a 501(c)(3) organization whose
core purpose is to strengthen nonprofits. The Foraker Nonprofit
Sustainability Model guides the organization by advancing
dedicated, skilled, compassionate professionals and volunteers
to serve Alaska's nonprofit and tribal organizations. Founded in
1998, the United Way of Anchorage set a strategic goal to create
a model of shared services for the nonprofit sector based on the
consolidated services of several oil companies on the North
Slope. That idea germinated over time and was cultivated in a
moment of great change in Alaska's philanthropic and corporate
landscape. Foraker was launched under the United Way umbrella in
January 2001 with the clear intent to serve all Alaska
nonprofits and tribes by building their internal capacity and
promoting philanthropy. He invited Ms. Wolf to put herself on
the record and begin her presentation.
1:35:35 PM
LAURIE WOLF, President and CEO, Foraker Group, Anchorage,
Alaska, presented an overview of the nonprofit sector in Alaska
based on full 2020 employment data. She said that she plans to
share specific examples of how "the great resignation" in the
workforce and the overall lack of workforce in nonprofits and
state agencies has affected the health, safety, and well-being
of Alaskans. She plans to offer a few significant, concrete
action steps for consideration.
[For tracking the numbered pages in the slide deck, each full
page contains two independently numbered half-pages. For
example, slide 1 contains half-page slides 1 and 2; slide 2
contains half-page slides 3 and 4; and so on throughout the
presentation. These minutes use the half-page slide numbers.]
MS. WOLF advanced to slide 1, The Foraker Group's Core Purpose
is to Strengthen Nonprofits:
Educational
Opportunities
Shared
Services
Organizational
Development
Public
Policy
Fiscal
Sponsorship
1:36:54 PM
MS. WOLF summarized slide 3, Overview of the Nonprofit Sector
with an Employment Lens and slide 4, Alaska's Nonprofit Sector:
Generating Economic Impact. She said the data on Alaska's
nonprofits is hard to compile, especially regarding the
workforce. It took countless steps to collect the data presented
today because employment is not tracked by sectors in Alaska;
for this reason, this full set of data is only captured every
three years. She expressed gratitude to the Department of Labor
and Workforce Development (DOLWD) and the Center for Economic
Development at the University of Alaska Anchorage (UAA) for
their deep data analysis. They worked together to provide this
comprehensive look at nonprofits. The full report is available
for download on the Foraker Group website.
1:38:35 PM
MS. WOLF advanced to slide 5, stating that for those interested
in a deeper dive, an interactive map is available on the Foraker
Group website. It contains specifics on each census region. She
encouraged members to explore the interactive map at:
www.forakergroup.org/speak-up/nonprofit-economic-impact/.
1:38:50 PM
At ease.
1:40:09 PM
CHAIR BJORKMAN reconvened the meeting. He requested Ms. Wolf
identify the name of each slide as she moves through the slide
deck.
MS. WOLF summarized slide 6, Alaska's Nonprofits are Currently
Contributing to the Alaska Economy in Six Ways. She said that
Alaskans hear the state should have fewer nonprofits and no
financial relationship with them. That would be a big mistake
for many reasons, including the cost the government would incur
to provide those services or the complete loss of those
services. It would impact the health and quality of life of
Alaskans.
Nonprofits are part of everyday life in Alaska
Nonprofits are a major economic driver.
Nonprofits leverage public funds for maximum return
Nonprofits partner with government in delivering
essential services
Nonprofits provide community investment and civic
engagement
Nonprofits met the demands of COVID head-on
1:41:38 PM
MS. WOLF displayed a pictograph on slide 7 to illustrate it
would be highly improbable for any Alaskan to move through their
day without using the services of a nonprofit organization. She
pointed out that Alaska does not have a county system of
government, so nonprofits play that role alongside and in
partnership with federal, state, local, and tribal governments.
For some, even turning on their lights could start the day
powered by a nonprofit. For others, it might be:
- listening to public radio
- dropping a child off at a nonprofit daycare or school
- ensuring their elder is safe and supported
- recreating on trails maintained by nonprofits
- attending a religious service
- working for a nonprofit organization alongside 38,000 other
nonprofit employees in the state, or
- participating as part of a professional association; the
backbone of every industry in the state.
MS. WOLF said Alaska's nonprofits provide essential services,
like medical care, housing and utilities, joy and purpose
through art, religious and cultural expression, education, and
recreation. They ensure quality of life, sustain the Alaskan way
of life, and attract employees to the state. In short,
nonprofits care for Alaskans, our pets, and the planet to foster
healthier and more prosperous communities. She invited everyone
listening to look around and notice how often nonprofits enrich
communities.
1:43:22 PM
MS. WOLF summarized slide 8. There are 5,620 nonprofits and 29
different types of nonprofits activated in Alaska and regulated
by the Internal Revenue Service (IRS). They represent various
missions that provide public service and contribute to Alaskan's
quality of life, health, and economy. She said most people think
of 501(c)(3) organizations when they think of nonprofits or
charitable nonprofits with missions like health, art,
conservation, education, religion, and others. While this
represents the majority at 78 percent, other types of nonprofits
are important contributors to Alaska's economy. Slide 8 depicts
four categories of 501(c) nonprofits:
Charitable Nonprofits Reflect a Variety of Missions
78 percent/4,384
501(c)(3) nonprofits
25 percent Religious
14 percent Education
13 percent Human Services
12 percent Recreation, Sports
10 percent Arts, Culture and Humanities
8 percent Public and Societal
7 percent Environment and Animals
6 percent Health Care
4 percent Philanthropy
1 percent International/Foreign Affairs
.5 percent Science and Technology/Unknown
10 percent/561
Other 501(c) nonprofits
including credit unions and utilities
5 percent/302
501(c)(6) nonprofits
social welfare organizations like civic leagues,
Rotary clubs, and employee associations
7 percent/373
501(c)(4) nonprofits
business leagues like chambers of commerce
1:44:32 PM
MS. WOLF expounded on slide 9, Nonprofits are a Major Economic
Driver. Most of the nonprofits just talked about exist without
staff and on volunteer labor alone. Nonprofit organizations
operate understaffed because they lack the financial resources
to employ people. Like all businesses, stability comes with the
consistent ability to compensate staff and provide a healthy
workplace. Looking at the nonprofits that employ Alaskans, data
indicates that a significant number of jobs are in the nonprofit
sector. It is easy to lose sight of the scale of their economic
impact because nonprofits are not considered to be a single
industry. When the state tracks jobs, it classifies them by
industries: oil and gas, tourism, healthcare, etcetera, not by
the sector where the work originates: nonprofits, government, or
private sector. Alaska's workforce is unique because all three
sectors are integrated into the state's industries.
1:45:47 PM
MS. WOLF reviewed slide 10. She said using the same economic
modeling as other major industries, the nonprofit sector
directly employed 38,105 Alaskans. Slide 10 shows how nonprofits
create jobs and income that ripple through communities:
38,105 Direct Jobs $2.8B Direct jobs
employment within nonprofit
organizations
12,679 Induced jobs
jobs created when nonprofit $773M Induced jobs
employees and employees of
supplier businesses spend their
paychecks
7,138 Indirect jobs
employment within businesses $463M Indirect jobs
as a result of selling goods
or services to nonprofits
57,992 Total jobs $4.07Billion
in total income
1:46:35 PM
MS. WOLF reviewed slide 11, based on the same economic modeling
used in oil and gas, fisheries, and other tourism industries.
The nonprofit sector is the third largest industry in Alaska
when considering indirect and induced jobs for all sectors.
Nearly a quarter of non-government jobs are tied to nonprofits
through indirect and induced effects. This information is
detailed on slide 11 as follows:
If we thought about nonprofits as an industry . . .
Providing jobs to Alaskans
77,600 Oil and Gas
58,700 Seafood
57,992 Nonprofit Sector (Nonprofits constitute
Alaska's third largest industry, by total impact).
9,400 Mining
One in four non-government jobs tied to nonprofits
57,992/25 percent tied to nonprofits
251,896 private sector jobs in 2015
1:47:03 PM
MS. WOLF said another way to understand a nonprofit's role in
Alaska's major industries is to examine their work as "frontline
and backbone" workers, from associations engaging in the public
policy process to economic development agencies promoting job
opportunities. Nonprofits contribute to the vitality of
commercial enterprises. For the business community, nonprofits
are often a vehicle for collaboration to improve the business
climate or pursue shared objectives like visitor marketing. In
other cases, the major players in an industry are the nonprofits
themselves, such as hospitals, credit unions, and electric
utilities. The Alaska seafood industry hosts unique nonprofit
entities like community development quota (CDQ) groups that
generate revenue for community investments and aquaculture
associations that enhance salmon runs. Slide 12 lists these
nonprofits and more:
Nonprofits are Essential Partners
to
Alaska's Workforce
Resource Development
Oil and Gas, Mining Industry Associations
Vendor/Supplier Associations
Oil Spill Removal Organizations
Workforce Development
1:47:45 PM
Seafood
Commercial Fisheries Associations
Regional Aquaculture Associations
Seafood Processors Associations
Community Development Quota (CDQ) Groups
Finance
(43 percent of industry employment is with nonprofits)
Associations for Banks and Credit Unions
Community Development Financial Institutions (CDFIs)
Credit Unions
Healthcare
(53 percent of industry employment is with nonprofits)
Hospitals
Tribal Health System
Associations for Healthcare Professionals
Research
Economic Development
(All Industries)
Local/Regional Economic Development Organizations
State and Local Chambers of Commerce
Vocational Programs
Visitor Industry
Industry Associations
Local Convention and Visitors Bureaus
Recreational Associations
Environmental Conservation
Construction
Contractors Association
Homebuilders Associations
Research Organizations
Homeowner Associations
Utilities
(56% of industry employment is with nonprofits)
Industry Associations
Electric Cooperative
Trade Unions
Alaska Native Corporations
Regional and Village Corporation Associations
Education Foundations
ANCSA Regional Nonprofits
Telecommunications
(39 percent of industry employment is with nonprofits)
Industry Associations
Telephone Cooperatives
1:48:02 PM
MS. WOLF advanced to slide 13, stating that one way to
understand the impact of nonprofits is to look at how essential
services are delivered. Every day nonprofits deliver efficient
and effective services to all Alaskans as a predictable and
stable partner to government. Without a county system of
government, Alaska's unique structure means that in urban and
particularly rural areas, nonprofits supply various public
services like water and sanitation, fire service, utilities,
libraries, and public transportation. Partnerships with
nonprofits create a social safety net that strengthens the
fabric of communities; by way of example, over 40 communities
depend on nonprofit volunteer fire departments. These
organizations embody thrift and resourcefulness with limited
budgets, small staff crews, and a duty to protect the public.
Roughly 47 nonprofit libraries operate across Alaska to ensure
access to information and life-long learning is available across
generations. Electric cooperatives present another example;
roughly 75 percent of Alaskans receive power from a nonprofit
cooperative utility. These organizations also account for a
majority of utility employment. These are just a few ways
nonprofits work closely with government.
1:49:32 PM
MS. WOLF advanced to slide 14, which indicates nonprofit jobs
play a key role in regional economies. The slide highlights the
percentage of jobs worked in the nonprofit sphere in regions
statewide. She noted that nonprofits are important to regional
economies. Nationwide, nonprofits employ 10 percent of the
workforce. In Alaska, nonprofits employ roughly 13 percent of
the workforce; nonprofits are responsible for up to 40 percent
of direct employment in some rural areas. In at least six of
Alaska's 30 boroughs and census areas, nonprofits provide 20
percent or more of all employment. This is largely because of
Alaska's tribal health system, which nonprofits run and is often
the largest employer in the area.
1:50:08 PM
MS. WOLF summarized slide 15, which showed nonprofit employment
by sector in 2020. Not represented in the chart below are
nonprofits that:
- employ less than 300 positions,
- are running on volunteer power, or
- live not only in nonprofit space but also in for-profit space,
government space, and many other spaces like childcare.
Job distribution across the sector
Health Care 20,366
Social Services 6,523
Other Services 3,863
(except Public Admin)
Finance Services 2,116
Utilities 1,279
Educational Services 1,031
Information 713
Professional and 699
Business Services
Amusement, Gambling, 364
and Recreation Industries
Agriculture, Forestry, 353
Fishing and Hunting
Nonprofits create half of all healthcare jobs.
MS. WOLF said it should be no surprise that healthcare and
social services are the largest employers. Healthcare and human
service nonprofits were the first responders to the [COVID]
pandemic. Alaskans should be grateful for workers who provided
leadership, extreme adaptability, and critical care for Alaskans
in 2020 and 2021.
1:51:32 PM
MS. WOLF reviewed slide 16, Nonprofits Leverage Government
Funding to Generate Earned and Charitable Income (in billions).
A graph from 2016 to 2020 on slide 16 divides funds, generated
from income-reporting Alaska nonprofits, into the following
three categories:
- Earned income - insurance reimbursement, tuition, program fees
- Other - gaming, investments, and fundraising events
- Contributions and grants - donations, membership fees,
government grants
She pointed out that there are a lot of myths to bust about how
nonprofits are funded. It is not possible to talk about
workforce without talking about budgets. The full employment
cost in a nonprofit budget, like government and for-profit
industry, is the largest driver in the budget. Nonprofits
generate revenue from various sources, including grants and
contracts from many layers of government. Many of those sources
were challenged before the pandemic and were turned upside down
during the pandemic. They continue to be greatly hindered by
prompt payment challenges, shifts in philanthropy, and workforce
shortages. As nonprofit organizations seek financial resiliency,
each one will strategically decide whether to focus
predominantly on mission-based revenue, earned income, or
charitable contributions. Every dollar, including those from
grants and contracts from the state and federal government, are
leveraged to raise more money for more mission.
1:53:06 PM
MS. WOLF advanced to slide 17, Specific Examples Impacting
Nonprofits Now. She said the following examples only scratch the
surface of a deeper set of issues, hampering the ability of
nonprofits to attract and retain the workforce needed to serve
Alaskans' health, safety, and well-being. The ripple of real-
world challenges illustrates the work ahead. These problems
stretch far beyond this administration; some are decades in the
making. The realities of the pandemic shifts in the workforce,
the outmigration of Alaskans, and the state of Alaska's economy,
create a clear opportunity to fix these issues. Alaska cannot
wait another year or decade to address its workforce challenges.
1:54:29 PM
MS. WOLF advanced to slide 18, The Reality of Pandemic Impact.
Nonprofits felt the pandemic's effects differently depending on
various factors. She said the demand on health and human service
organizations increased almost overnight. Many organizations had
to adapt to providing services with their physical doors closed.
Nonprofits nimbly adapted to meet the needs of Alaskans while at
the same time enduring the economic hardships of a pandemic
economy. The [COVID] health emergency has shifted. Still,
nonprofits will face the economic and workforce impacts for many
years with ever-changing health precautions, staffing shifts,
the great resignation and reshuffle, unexpected costs in a
lagging supply chain, waning volunteerism, and uncertain funding
sources. As nonprofits face rebuilding their business models in
this economy, they do so knowing that the ability to recover is
part of building a foundation for a strong economy for all of
Alaska. She said that perhaps there is no more perfect example
of the consequence of the pandemic than its role in the state's
workforce and the recognition that childcare needs to be
addressed statewide.
MS. WOLF said the bottom line is that nonprofits are still
trying to recover in the face of increased demand, loss of
workers and volunteers, and deep shifts in funding.
[Slide 19 was not included in the slide deck.]
1:56:04 PM
MS. WOLF advanced to slide 20 to discuss "The Reality of Delayed
Payment." She said ensuring nonprofits are paid promptly for
work rendered is essential for a nonprofit to attract and retain
employees. The state needs to process grant and contract
payments, and Medicaid reimbursements timely. Unreliable cash
flow not only creates undue stress on state and nonprofit
employees but can also create life-and-death consequences when a
nonprofit organization cannot meet the needs of those it serves.
She said the additional weight of not paying for food or medical
expenses for those in greatest need could have worse outcomes
for people, nonprofits, and local governments.
MS. WOLF said that she has two stories to share. One story is
from the Tundra Women's Coalition (TWC) in Bethel, and the other
is from the Kodiak Senior Center. The stories describe the
ripple effects when payments are not received on time. She cited
Eileen Arnold, of TWC, whose testimony is paraphrased:
The agency is a cash-poor agency, in a cash-poor
community, in a cash-poor region. State funds, both
directly and indirectly, are supposed to advance . . .
a quarter's worth of general funds and reimburse
monthly for federal funds to keep the doors open.
Advances almost never arrive in advance. First quarter
started July 1, and the advance arrived on August 2. .
. . I have to spend a lot of time calling vendors,
asking them if they can wait on payment. ... I cannot
pay people, or taxes, or utilities. I actually
considered holding payroll ... because we didn't have
the cash. ... It's a lot of effort for my finance
staff and me. We should be able to depend on prompt
payment instead of spending time calling vendors,
asking them to go without payment, so that we can stay
afloat.
MS. WOLF cited Pat Branson, of the Kodiak Senior Center, on her
payment woes as paraphrased:
Quarter (Q) 1, starting in July, grant payments were
received on October 3 after the quarter had ended. We
had to show expenses to complete our Q1 reports, which
triggered our Quota 2 payments. So, we had yet to
receive any revenue to reflect those expenses. The
Kodiak Senior Center did not receive Q2 grant payments
until November 4 and December 2. To complete our Q2
reports, we had to expend those funds received on
December 2 by December 31. Our agency had funds set
aside; ... otherwise, we would not have been able to
meet payroll or deliver services to those 60 and older
on Kodiak Island. I am unsure how other agencies
managed with this payment glitch.
MS. WOLF said prompt payment issues are happening statewide as
everyone struggles with workforce shortages. The challenge is
exasperated by an outdated and overdue information technology
(IT) overhaul and a needed update on how the state codes and
processes payments.
MS. WOLF said the bottom line is that the substantial payment
delays hurt people, workers, and the state's economy. These
challenges will take more people, in both the state and
nonprofit entities, to solve.
[Slide 21 was not included in the slide deck.]
1:59:54 PM
MS. WOLF advanced to slide 22 to explain "The Reality of Under
Funding and Cuts." The following example comes from Head Start
but applies to many. Head Start currently serves over 2,600
children in over 100 Alaska communities. They have a workforce
crisis coupled with an inability to serve more children. Part of
the story for Head Start is that they lack a full match from the
state, which they could leverage from other funds to turn into
better wages and benefits. This would mean more children could
receive care and more parents could go to work.
MS. WOLF said the bottom line here is that the cuts and/or flat
funding over the last decade decreases the ability of nonprofits
to serve Alaskans in need, compete in the workforce for quality
staff, and reduces the ability of nonprofits to leverage every
dollar lost with other funding.
[Slide 23 was not included in the slide deck.]
2:00:55 PM
MS. WOLF advanced to slide 24, The Reality of Vacant Positions.
She said the great resignation and reshuffle are not reserved
for one sector or place. It is currently a universal truth in
every workplace.
MS. WOLF said that the bottom line is that there are not enough
qualified workers to do the work, causing services to close and
creating great stress on those who stay. She hears daily that
many state agencies that engage with nonprofits have a high
administrative staff vacancy rate and are greatly under-
resourced. The Foraker Group job board, updated daily, provides
a visual reminder that nonprofits are experiencing the same
staff shortages. A lack of nonprofit staff affects the health
and safety of Alaskans. She read a statement from Hope Community
Resources about a situation that is echoed by many service
providers within the Alaska Association on Developmental
Disabilities network, paraphrased below:
Hope has closed and consolidated eight assisted living
homes over the past year. A significant contributing
factor to closures is the lack of staffing. The
closures have resulted in limited residential choices
for residents. Hope values choice in its mission, but
choice is significantly reduced without adequate
staffing. People seeking Hope services must wait or
seek support elsewhere, so intake is delayed or
referred to other providers. One in three people
authorized and funded to receive services in natural
homes with their own apartment need staff. Mandatory
requirements for Hope to staff licensed assisted
living homes have become a priority. These families
are experiencing extra stress and crisis risk but do
not choose to move to another provider because the
same workforce shortages affect them. Covering
vacations increases strain and burnout on employees,
exacerbating the shortage. Overtime costs have soared
to cover essential shifts in 24/7 residential
environments. Hope's annual budget for overtime has
been exceeded in less than six months, further
increasing burnout risk.
2:03:13 PM
MS. WOLF said the Alaska Network on Domestic Violence and Sexual
Assault covers 22 agencies with common themes impacting their
ability to provide services. Themes include the inability to
compete in the marketplace to retain and recruit employees and
the lack of staffing to achieve the safety components of their
missions, which run 24/7, 365 days a year. She shared the
following testimonials:
One program said "We have a huge workforce shortage
here that has really impacted our agency. We had to
close our childcare assistance program last year due
to a lack of staff and not being able to hire anyone
to take those positions. We are currently facing the
potential of closing our transitional housing facility
that has been in operation for over 40 years."
Another program said, "All of our current staff, who
were hired to do prevention work in our community, are
covering shelter shifts because we do not have enough
advocates to cover the 24/7 shift necessary to ensure
safety. Everyone is working overtime, and they are
getting tired."
And again, another program reported, "We have to
reduce the number of individuals we can assist due to
our low staffing levels. The impact is that victims
who have come to us for emergency shelter are being
turned away because of reduced capacity."
MS. WOLF said the overall system in place to protect and provide
services to the victimized is experiencing the consequences of
workforce shortages. Across the board, there is a shortage of
village public safety officers (VPSOs) and state troopers. Many
medical facilities do not have a sexual assault nurse examiner
to work with sexual abuse victims. These are sobering stories,
and they are just a few of many.
[Slides 25 through 28 - not included in the slide deck.]
2:05:08 PM
MS. WOLF advanced to slide 29, stating the committee invited
Foraker Group not just to share the challenges nonprofits face
but solutions. Foraker does not have all the answers, but some
solutions will have an immediate and long-term effect. All of
them are within the purview of the state to take the lead, and
all of them will be fast when everyone locks arms to do the work
together.
2:05:32 PM
MS. WOLF reviewed an excerpt from the 2020 Foraker Group
Economic Report, slide 30:
[Original punctuation provided.]
Our call to action in 2020 is more true than ever
We call on government, business, and philanthropic
leaders to work together to reassess grant agreements,
government contracts, and philanthropic investments
with a focus on operating support, wage adjustments,
rebuilding financial reserves, and program adaptation
that addresses staffing shortages. Give nonprofit
leaders the support they need to reimagine workplaces
that attract and retain a high-quality and high-
capacity team. By doing this, you nurture vibrant
communities and help Alaskans enjoy healthy,
productive lives.
MS. WOLF said that in its 2020 economic report, Foraker Group
discussed the need to address staffing shortages. The
handwriting was on the wall in 2020 and had been building for a
long time. The report recommended adjusting grants and contracts
for inflation and that nonprofits offer better compensation to
compete for scarce employees. The report predicted nonprofits
would do vastly more work than before the pandemic. She said
that back then, she was optimistic that nonprofits could rise up
and do it by adjusting business models, creating collaborations,
and expanding services where needed. Those things can only
happen well with some additional work; nonprofits cannot and
should not do it alone.
2:06:25 PM
MS. WOLF advanced to slide 31, to propose five "Concrete Action
Steps to Foster a Thriving Alaska Workforce and in Turn ALL
Communities:"
Prioritize Prompt payment
MS. WOLF said that the prompt payment problem stems from a
workforce capacity issue, declining technology, and a process
issue. Other states seek workable prompt payment solutions, and
Alaska can lead the way if the state pays attention to it. The
executive branch departments have good ideas, as do leaders in
the nonprofit sector. She suggested everyone learn how to do it
right from each other and other states.
Overhaul the State's IT systems
MS. WOLF heard in a recent legislative hearing that the state's
outdated and overburdened technology system had become a source
of many woes. More than a decade ago, there was an effort to
update, streamline, and network the systems for efficiency and
effectiveness, but these goals have yet to actualize. The cyber-
attack made bad worse. It hindered prompt payment to people,
nonprofits, and others, as well as the background check system.
The background check system is the core for hiring workers in
all health, human service, and childcare jobs. The state must
move away from the manual, slow processes and significantly
overhaul the IT system, so that background checks stop delaying
hiring. Concrete solutions have been offered for background
checks by the Alaska Mental Health Trust, the Alaska Association
of Developmental Disabilities, and others. She encouraged
consideration of these solutions as a legislative and/or
regulatory fix for background checks. The state can access other
experts to guide the way in overhauling the whole system and is
encouraged to do so.
Recognize the essential workforce
2:08:27 PM
MS. WOLF said if the work is essential, so must be the worker.
Workable solutions to workforce challenges will not be found
until a living wage, affordable healthcare, and other benefits
are offered. It is necessary to see, recognize and thank the
workers we do have for doing an extremely hard job day in and
day out. Nonprofits have never been fully staffed
administratively because there are insufficient funds to pay for
full staffing. She said the state had suffered significant cuts
in vacant administrative jobs for longer than she can remember.
One argument that supported eliminating jobs was that the
positions were vacant. For nonprofits, this only means staff
will endure more over-pressured and overworked years, doing more
with less. The consequences delayed payments cause are visible
in programs like the Supplemental Nutrition Assistance Program
(SNAP) and the inability to process Medicaid and other grant
payments on time. This, coupled with a piecemealed IT system,
hurts workers and Alaskans. She recommended fixing the problem
by asking each department to identify their actual
administrative needs to get the work done and build the state
budget from this stable place.
Address the complex factors hindering the workforce
MS. WOLF quoted from a recent Anchorage Economic Development
Report, laying out the complex factors hindering the workforce.
These factors are applicable statewide:
The city has struggled with several factors that
contribute to workforce availability and overall
quality of life. High housing costs, low availability
of childcare services and uncertainty surrounding K-12
education funding being three of the most prominent in
2022.
MS. WOLF said there are no single solutions to the state's
workforce woes. Solutions lie in the willingness to see and meet
the complexity of the challenge together, and she encouraged
committee members to do that.
Invite nonprofits to the table
2:10:26 PM
MS. WOLF requested committee members invite their nonprofit
partners to the table. Nonprofits have diverse experiences and
skills and are on the ground in communities statewide.
Nonprofits are a resource and the state's partners. They will
come to the table with problems and solutions. She said she
heard great ideas on regulatory reforms, rate reviews, process
overhauls, and new collaborations to serve Alaskans better as
her group prepared the presentation today. She said that her
colleagues across the state have been living with these
challenges for a long time; and have come up with solutions.
Nonprofits are eager to work with the Legislature to ensure
nonprofits stay in business and serve Alaskans. She encouraged
committee members to invite nonprofits in because everyone is
stronger when working together.
MS. WOLF said that her message today is that nonprofits want the
same thing, a strong economy, and a stable workforce. She
acknowledged that the safety net is thin, resources are short,
and the tendency is to cut instead of invest high. That dialogue
must change for Alaska's economy to thrive. She said that
everyone is ready to work on a plan with the legislature on
behalf of Foraker Group and all nonprofits.
2:12:05 PM
CHAIR BJORKMAN invited committee members to ask questions.
2:12:14 PM
SENATOR DUNBAR referenced Ms. Wolf's term "waning volunteerism,"
asking why Alaskans are volunteering less now than in the past.
MS. WOLF answered that the last time there was good data about
volunteerism, Alaska ranked fourth in the nation. She said
Alaskans know how to help each other. Like the reshuffle in the
workforce, nonprofits see a reshuffle in volunteerism. People
are taking stock of deeper commitments made to nonprofits
through board service and other longer-term commitments. Foraker
has initiatives underway, including the Alaska board match site,
to encourage more Alaskans to serve on boards. The effects of
the pandemic are visible in the volunteer pool. It is helpful to
recognize that many volunteer programs had to shut down during
the pandemic in the name of public health. Many nonprofits face
restarting volunteer programs with limited resources and
staffing. Volunteer programs do not magically happen; people
must organize the programs to make them happen. She said that
nonprofits need people to organize more people. This is a ripple
effect as a result of the pandemic.
2:14:28 PM
SENATOR BISHOP dovetailed off of Senator Dunbar's question. He
asked whether the ten-year outmigration of 8,800 people annually
affects volunteerism.
MS. WOLF replied that is an amazing question and she would like
to see the data on that. She replied that she had some anecdotal
moments in the last couple of years that make her want to say
maybe. Many board meetings and other opportunities have gone
virtual. A lot of people remain committed to their organizations
and continue to serve, doing what they can. However, they are
not doing it from within Alaska. She answered that she is unsure
that there is a correlation but would like to see a study that
figured it out. She surmised that as soon as people who have
migrated out of Alaska settle into their new location, they will
let go of their Alaska connection and make new connections. She
guessed that in the interim, as people resettle, they are not
letting go of their Alaska connections too quickly.
2:16:02 PM
CHAIR BJORKMAN asked for specifics about how nonprofits save
government money.
MS. WOLF replied that there are many examples of how nonprofits
save the government money. She reiterated that there are no
county governments in Alaska. Nonprofits partner with local,
state, and the federal government to deliver services; volunteer
fire departments are an excellent example. She said she would
find the dollar amount that volunteer firefighters save the
state and provide it to the committee. Another example is
independent living supported systems. It is more cost-effective
for a person to stay in their home than reside in a state
facility like the Pioneer Home. Organizations focusing on
independent living have calculated how much money they save the
state by keeping people in their homes. A few years ago, Foraker
Group had a call to action and named it "Do the Math" to figure
out how much money nonprofits are really saving the state. Many
organizations have taken up that call, and Foraker Group is
happy to provide that data to the committee. There are many
examples where nonprofits do it "better, cheaper, and faster"
because they are on the ground and in the community, working
hand in hand with those served.
CHAIR BJORKMAN agreed that nonprofits work closely with and
provide value to those they serve. He said it would cost the
government much more to implement substitute services;
nonprofits do it for much less.
2:19:29 PM
CHAIR BJORKMAN commented on the term "leverage," which Ms. Wolf
used in the presentation. He sought verification that she meant
matched contributions.
MS. WOLF replied yes, meeting matches. She harkened back to the
testimonial from the Tundra Women's Coalition. State grants or
contracts create stability within an organization. Nonprofits
should expend their energy on the work and finding alternative
funding sources rather than fending off debtors. She said the
state provides stability to the partnership that cannot be
overstated.
2:20:03 PM
SENATOR GRAY-JACKSON asked whether employee burnout,
frustration, and anxiety affect the stability of nonprofit
organizations and the workforce.
MS. WOLF replied that she listened to the testimony of SNAP
employees who struggled to get payments out the door, and her
heart hurt. The employees worked hard in the face of animosity.
She surmised it took a toll on the employees' mental well-being.
She thinks about both state and nonprofit employees in this
conversation. Many nonprofits are a "helping" profession and
feel deeply about the work they do every day. She always thinks
about the well-being of her team as an employer with 22
employees. She considers what employees need to do their jobs
and their complete wellness. She said it is an important
question, and there are not enough resources to meet everyone's
needs.
2:21:43 PM
CHAIR BJORKMAN asked what solutions she sees for the state's
childcare issues.
MS. WOLF recalled a statistic when she was a working mom. There
were 14,000 childcare spots in Anchorage for 28,000 kids. She
said her kids are grown now, and she no longer needs childcare.
She expressed gratitude that so many are picking up this
conversation and talking about its urgency. Alaska has not had
enough childcare to meet the needs of its children for as long
as she can remember. The pandemic exacerbated the problem. She
expressed that there are childcare experts in the state with a
lot of ideas. She encouraged the committee to invite childcare
experts to the table. She said that childcare is an interesting
conversation because it is one of the services in the state
delivered by every sector: government is involved through Head
Start, partnerships with nonprofits in government, tribes, mom-
and-pop in-home care, and major corporations. She expressed that
she is not an expert on the subject, and the complexity of the
subject warrants one. There are people in the state that have
concrete solutions.
CHAIR BJORKMAN spoke to delayed payments discussed in the
presentation, asking where the choke points are and how the
committee can help.
MS. WOLF said challenges primarily lie in processes,
procurement, technology, and lack of people. She said the
Department of Administration needs to be involved in the
solution. Even if the technology worked, which it does not, and
even if the process were streamlined, which it is not, the state
has a worker shortage problem. There are not enough people in
the state system to do the processing, and the people who are on
staff, are overworked. She expressed her belief that state
workers are overburdened with these issues. She said there are
things to fix clearly, adding she does not pretend to know how.
2:27:11 PM
CHAIR BJORKMAN said this serves as an all-call to all interested
parties.
MS. WOLF said the department heads see the issues and solutions.
She invited the department heads to provide that information to
the committee. She noted that nonprofits have suggestions for
regulatory changes that would help.
CHAIR BJORKMAN said that the committee looks forward to hearing
those suggestions. He directed attention to slide 24, asking
what the state can do to help with the worker shortage issue in
the human service space.
MS. WOLF sought clarification on whether the question pertained
to the nonprofit or state human service space.
CHAIR BJORKMAN answered in the nonprofit space. He asked if the
committee could do anything specifically other than the big,
broad suggestions talked about so far.
MS. WOLF answered that it would be remarkable if the state could
adjust existing grants and contracts to match inflation. She
said it would help to discuss how many workers are needed to
complete a job, expressing her belief that budgets are built
without those numbers. This is true for the state and
nonprofits. Nonprofits have never been fully administratively
staffed because they cannot afford it. Figuring out what it
costs to do the work should be calculated first, then decisions
and choices made. This does not happen often.
2:29:43 PM
SENATOR BISHOP concurred and commented that a base budget must
be determined before establishing a spending cap.
2:30:34 PM
SENATOR GRAY-JACKSON directed attention to the five concrete
action steps to foster a thriving workforce on slide 31. She
commented that the committee and legislature need to figure out
how to implement those suggestions.
2:31:08 PM
SENATOR DUNBAR spoke about prioritizing prompt payment. He
commented that various nonprofits work with various state
agencies, questioning where relevant payment holdups are
occurring. He asked what percentage of prompt payment holdups
flow through the Department of Administration.
MS. WOLF answered she has been trying to get to the heart of
that question. She said nonprofits know which agencies they
contract with on the front side but do not know the process on
the back side. She answered that she does not know what flows
through the Department of Administration, emphasizing this is an
important question to ask and unravel. She said this question is
best answered with all commissioners at the table because the
process is different between departments. Alaska does not have a
streamlined, one-stop process. A lot of processes have developed
over the years. The Department of Administration has a
challenge, not of its own making but of decades in the making.
She mentioned SNAP, stating an antiquated IT system does not
help the situation.
MS. WOLF spoke to a previous question about the issue of
essential workers and the workforce. She said healthcare in
Alaska is incredibly expensive and difficult to access. In
addition to a living wage, which many essential nonprofit
workers do not receive, they also do not have access to benefits
or healthcare. These are issues the nonprofit workforce faces.
2:35:36 PM
There being no further business to come before the committee,
Chair Bjorkman adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:35 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| The Foraker Group-Nonprofit-Economic-Impact-Report-2.23.22.pdf |
SL&C 1/30/2023 1:30:00 PM |
|
| 1.30.23 Foraker Group-Nonprofit Presentation.pdf |
SL&C 1/30/2023 1:30:00 PM |
Foraker Group Presentation |