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Mayor’s Proposed Budget Disproportionally Impacts Women and People of Color

October 25, 2022

Leaders of regional nonprofits implore Seattle Mayor and City Council to reconsider human services COLA cap

Mr. Mayor, we are confused. We know you are a champion for diversity and equity. So why are you capping inflation-based pay increases for a set of vendors who are disproportionately women and people of color—those predominately serving our most vulnerable populations? Or did you plan to cap compensation for all vendors who supply goods or services to the City?

Capping inflation-based adjustments for human services workers at 4 percent when the Seattle-area inflation rate is hovering around 10 percent would be a devastating blow – and would widen the significant wage gap for women and BIPOC employees. (https://www.zippia.com/human-services-worker-jobs/demographics/).

If providing health care for all and ending homelessness are still critical service priorities on the City’s agenda, starving our human-services sector makes no sense. Our region is already losing human services organizations at a steady clip due to underfunding and lack of support. Nonprofits are going out of business because they can’t afford to do business in the City of Seattle or King County. Nor can human services employees afford to live near the Seattleites they serve.

When these nonprofit agencies fail, our region is left without a critical human-service infrastructure. If this continues, the City and the County will need to build new infrastructure systems to fulfill their commitments to citizens. Developing these services in-house will be significantly more expensive and less effective than retaining the expertise and experience of those currently employed in the human services sector.

While local and state governments rely on human service organizations to deliver basic services to their citizens, most government contracts pay, on average, less than 80 cents for every $1 in services human service organizations deliver. Most contracts cap overhead costs at 10 percent while actual overhead rates are 20 percent or greater.

As a direct result of this systemic underfunding, many, if not most, human service organizations are now in financial distress. Several long-standing, crucial service providers have already permanently closed their doors. Governmental entities must change the restrictions and expectations associated with human service funding or risk losing essential service providers.

Whether voters know it or not, nonprofits are required to subsidize the City’s human services. This happens because City contracts do not pay the full cost of fulfilling the contract.

Capping COLA at 4 percent does not begin to cover what competitive nonprofits need to pay to retain and recruit employees as evidenced by the current staffing shortage in human service organizations across our region. In order to thrive and meet our growing community service needs, we must pay market rates which have gone up closer to 25 percent over the last year and one-half.

At this critical juncture we implore our Mayor and City Council to reconsider this meager cost-of-living adjustment during these most challenging economic times to protect Seattle’s essential human services infrastructure.

We are writing on behalf of Brave Commitments, a group of more than 40 organizations committed to building a sustainable human services sector:

Janice Deguchi, Executive Director, Neighborhood House
Mahnaz K. Eshetu, Executive Director, Refugee Women’s Alliance
Heather Fitzpatrick, President and CEO, Wellspring Family Services
David Newell, President and CEO, Children’s Home Society of Washington