The Maytree Foundation has for some time now been running a series of two-hour seminars titled Five Good Ideas on topics of interest to nonprofit executives, then posting a summary of the presentations on its web site. Following is the summary of the presentation on managing union relations with Frances Lankin, President and Chief Executive Officer, United Way of Greater Toronto.

The necessity for community-based agencies to operate on a shoestring often collides with trade unions seeking increased compensation for their members whose salaries are lower than similar jobs in other sectors. The long-term answer is for both parties to convince funders that core, sustainable funding is required. In the short term, the interests of community-based agencies are served by having knowledgeable, skilled negotiators on both sides of the table.

Know the funding environment, and tell the story

All nonprofit organizations are dependent on external funders. Some of these funders are wise, patient and understanding. Other funders will enter into contractual arrangements with an organization to deliver defined services with specific outputs. These funders may or may not have a mandate to worry about the organization’s core capacity, and they may or may not be sympathetic to the pleas that a sustainable organization needs a stable, reliable and professional staff complement.

In any relationship, the ability to communicate effectively depends on a common, shared base of information. Employees need to know and understand the funding environment – particularly the leaders of the union. And they need to hear about it from management.

Employees need to understand the challenges in managing an organization based on the disparate priorities, timetables and approaches of multiple funders. They need to know that the ability to invest in the organization’s biggest resource – the staff – can be compromised by funding arrangements. An understanding of the organization’s budget-setting process is essential. If staff is engaged in this process, it is a step towards understanding the larger strategic planning and/or decision-making process.

Communications is not just about the financial circumstances of the organization. Good employee and union relations requires investment in relationship-building. Depending on the size of the organization and bargaining units, this will mean different things: For example, an employee relations committee, a joint health and safety committee, a well-being committee and a recognition committee. It also includes inclusive practices and developing a shared commitment to the organization’s mission.

Remember that a benevolent social mission never – or at least, rarely – compensates for poor human resources or union relations practices

Workers in the nonprofit sector are generally proud to be working in an agency that is committed to the public good. But a mismanaged payroll or poor labour relations will strain the goodwill of even the most angelic of employees.

The people who work in the nonprofit sector must balance the social purpose of the organization against the bread and butter concerns of themselves and their families. Rarely do people working in the sector expect that compensation will equal opportunities that may exist in some parts of the private sector, but neither should one expect the individuals who deliver public services to subsidize the cost of their delivery.

There are other rewards to working in the sector. It is therefore important that these are shared with employees at every level, as they can affect morale. The stories of organizational accomplishments, lives turned around, and grateful families and communities should be shared.

Recognition and genuine thanks do not replace adequate compensation, but providing them is a strategy for building a strong team. Management is often very good at recognizing the contribution of volunteers. However, recognizing employees is equally important.

One caution – beware of generational differences. Many leaders of community agencies, both management and board members, were involved in founding organizations, and helping them grow; they may have a stronger emotional connection to the cause than their employees. A young poorly paid employee, with a huge student debt, might simply resent the poor pay and benefits.

When bargaining your contract, choose negotiators very, very carefully

One may be tempted to use community board members, or if large enough of an organization, to hire an external negotiator. However, negotiators with a strong personal relationship with employees can smooth many inevitable bumps on the road to negotiating a collective agreement. It is important to have a negotiator who is experienced, understands the process and the laws and is committed to finding win/win solutions.

Collective bargaining is only part of the relationship with unionized employees. The relationship will continue after the contract is resolved. Ensuring that the negotiator understands that context is extremely important. Be very careful about choosing a negotiator who does not have an ongoing stake in the smooth resolution of employee disputes and the effective implementation of the collective agreement.

One may think that the union is bringing in an outsider. But chances are that person is a union employee who will have some relationship with the local, and may even be back at the table next time. Do not assume that the union’s outside negotiator has to be matched by an outsider on management’s side.

Be prepared for external solidarity with your workers, and do not take it personally

Many trade unionists see the nonprofit sector as the next frontier in seeking justice for low-paid, vulnerable workers. Remember that the nonprofit sector is performing some functions that were formerly carried out by the public sector. Generally it has translated into lower pay and benefits for the same work.

The argument for moving certain services out into the public may be about community control, but if it comes with lower wages it is obvious that there will be a negative reaction. This makes the nonprofit sector a natural target for trade unionists and others who worry about the erosion of decent-paying, middle-class jobs.

Management’s job is to overcome the financial vulnerability of the organization in order to provide a public benefit; management do not see themselves as the greedy top-hatted millionaires from the Monopoly game. However, it may come as a surprise to hear them being characterized as a “management scumbag”. But the worst thing they can do is take this personally.

The reaction of well-meaning management to such taunts have sometimes been so bitter that it has made bad situations worse, and led to public and private statements that are extremely unhelpful to resolving disputes and rebuilding a strong relationship between management and labour. Bite your tongue, as everyone must live with each other afterwards.

Adopt a corporate social responsibility model for looking at employee relations

The tightening of the labour market is changing the way that large private sector employers view their labour force. Increasingly, employees are identified as a key constituency for private sector communications and responsibility.

In the nonprofit sector, there are not as many resources to invest in the development, productivity, health and wellbeing of the employees. Therefore lessons of corporate social responsibility – CSR – cannot be directly transferred. But it remains a very sound business practice.

CSR, broadly speaking, describes a corporation’s performance in areas such as community philanthropy, environmental stewardship, and employee relations. Obviously the nonprofit sector is doing quite well in community philanthropy and reasonably well in the eco-friendly area. But the nonprofit sector can do a better job of connecting good employee practices to overall organizational effectiveness.

CSR, it must be remembered, is a business tool. The philosophy is that doing the right thing can also be a profitable strategy. In the area of employee relations, the research supports this. A federal government study found a direct link between improved labour productivity and good employment practices among private sector employers.

The nonprofit sector has work to do in developing the most important resource: a more stable, effective and healthy paid workforce. Good employee relations and good relations with the unions that often represent workers in the sector are crucial elements of this work.

This summary and others, each published subsequent to the seminar to which it refers, can be found at www.maytree.com/fgi/previous.asp.