Baby Boomers Retirement: An Opportunity for Public Agencies and Nonprofit Organizations to Collaborate

A note for our readers: the views reflected by the authors do not reflect the views of ASPA.

By Linda Jefferson

Over the past decade, the soft cry surrounding baby boomers’ eligibility to retire and the potential impact on the workforce has become a thunderous roar. The U.S. Bureau of Labor Statistics (BLS) in its “Employment Projections: 2012 – 2022 Summary” projected 50.6 million job openings will become available between 2012 and 2022. Of the 50.6 million job openings, 62.7 percent will result from persons exiting the workforce. Many industry leaders attribute the potential mass exodus to the baby boomers (individuals born between 1946 and 1964) retiring and there not being enough individuals in the prime work age group (18 – 54) to replace projected openings.

In the article “Concerns Grow over Workforce Retirements and Skills Gap,” Theresa Minton-Eversole, online editor/manager for the Society for Human Resource Management (SHRM), cited data from the Pew Research Center that indicated, “10,000 baby boomers will reach age 65 every day during the next two decades.” That is approximately 73 million individuals eligible to leave the workforce. Allie Bidwell, reporter for U.S. News & World Report, stated in the article “Report: Economy Will Face Shortage of 5 Million Workers in 2020,” the U.S. economy will experience a shortfall of 5 million workers with the necessary education and training to fill expected job openings by 2020.

Industry leaders debate whether there will be an actual worker shortage. Some believe baby boomers and others eligible to retire may delay retirement because of the impact of the Great Recession. No matter what side of the debate you fall on, one thing is certain. Approximately 77 million baby boomers will reach the tradition age of retirement (65) within the next two to three decades. The next generation, referred to as Generation X, produced significantly fewer births and some industry leaders say those numbers will be unable to replace the exiting baby boomers. In fact, the oldest of the baby boomers turned 65 in 2011.

The potential worker shortfall presents an opportunity for public agencies (government) and nonprofit organizations to collaborate. This column will focus on collaboration between government and nonprofit organizations designated as public charities – those identified as tax exempt under the Internal Revenue Service 501(c)(3) tax code according to the National Center for Charitable Statistics. Specifically, this column will highlight the following:

• Benefits of collaboration.
• Potential pitfalls/barriers.
• Things to consider for a success collaborative effort.

In 2011, the Internal Revenue Service recognized approximately 1.6 million nonprofit organizations, including approximately 1 million public charities according to Sarah Pettijohn in the Urban Institute’s The Nonprofit Sector in Brief: Public Charities, Giving and Volunteering, 2013. Nonprofits employed between 12 to 15 million people and engaged a volunteer base estimated at 65 million adults in 2012. Overwhelmingly, most of the public charities are small organizations with less than $100,000 in gross receipts annually.

Benefits of Collaboration

With governments budgets shrinking and employment growth trending slightly downward, collaborating with public charities make good business sense. The nonprofit sector employment growth is expected to increase between 2012 and 2022. Collaborating with public charities that complement the mission of government broadens the reach of services and increases efficiency.

Public charities have a pulse on the community. The community-based nonprofits are in the community. They have established relationships built upon trust with the community. This places them in a position to know or have a general idea what the community needs. Sometimes government agencies do not have this positive relationship with the community. Working together, the two sectors can deliver services that can benefit the community. One such example is the local health department teaming up with community groups to offer free health clinics.

Volunteer mobilization. Community based organizations can mobilize their volunteer base to get the work done. One such example of this was when the government wanted to educate taxpayers about the earn income credit. Volunteers from a community based organization helped with this initiative.

Potential to reduce labor costs. Working with a compatible community based organization could reduce labor cost for a government agency. The community-based organization delivers the service with its staff and volunteers. The government entity quite possibly may not have to hire employees for those services performed by the community-based organization. In addition, some government agencies may not be able to replace workers.

Leverage resources. As stated earlier, most community-based organizations are small. They have a need for staff development and the visibility and strength of the government entity. Government agencies can help community-based organizations build capacity. By that, government entities could train or offer staff development courses and opportunities for the nonprofit. In addition, government agencies have facilities that can host training or other community events necessary for service delivery. This would allow the community based organizations to free up resources and direct them to providing more services to their clients.

Potential pitfalls/barriers of collaboration

Public perception. Constituents may view a collaborative effort between community based organizations and local government agency as favoritism or not a good use of their tax dollars. Additionally, some business entities may feel they are at a disadvantage and cry foul. Be diligent in explaining the cooperative effort and secure the necessary approvals necessary to form the alliance.

Rigidity. Government is a large and its concern is broad based. This sometimes means government is more structured because of the guidelines and laws that guide its operations. Both organizations need to be flexible where possible. This could be possible new territory and both groups need to work with each other to understand the other and accommodate where possible.

Philosophical differences. Sometimes community based nonprofits and government have differing views about the same issue. Both entities have to determine whether they can work together for the common good. It is difficult to overcome philosophical differences. Be honest when evaluating this matter.

Things to consider when building a successful collaborative effort

Do your homework. The collaborative public charity and government agency must research each other to determine if they are compatible. Research the respective company’s mission, leaders, follow through, ethics and reputation. Check social media in all forms, particularly blogs. Make the most informed decision possible.

Get it in writing. Create a written agreement outlining the details of the collaborative efforts. Be specific about the terms of the arrangements – who, what, when, how and where.

Have an exit strategy. Both the public charity and government entity should develop an exit strategy. Know where to begin and when to end. Outline the conditions and elements to help determine when the collaborative effort is over or when the effort is no longer productive.

Establish clear expectations and be realistic. This requires both parties to take an earnest look at what they can and cannot do. Nothing destroys momentum faster than to have unclear expectations and unrealistic goals. Include these expectations in the collaborative agreement.

Communicate, communicate and then communicate some more. It is critical to the success of the venture for both entities to share information. Engage in strategy sessions, share information, share progress and redirect the project if warranted. Communication is about trust. Trust each other enough to share the good and the not so good.

The Silver Tsunami as some industry experts refer to the potential mass retirement of the baby boomers is on the horizon. The possible worker shortfall presents an excellent opportunity for community based nonprofit organizations to collaborate with government entities. Done right, the collaborative effort is definite win-win for the community.

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