Fair Nonprofit Staff Compensation: Justifiable? Of course.

Update: please be sure to read the Annenberg Foundation’s amazing report on fundraising: Underdeveloped.

Original post:

The wonderful Annenberg Alchemy program has a blog, and recently they asked a question that’s been bugging me for all my years in the nonprofit sector: Justifying Compensation – Are We Worth It?

Read the short blog and questions, but the answer is simple: yes. Nonprofit staff are worth compensating at a rate comparable to the private sector. If an organization hires talent and bestows responsibility, that talent and responsibility should be fairly compensated. Staffs of established nonprofits are fully professionalized. These are not volunteers; they are professionals with deep knowledge and skill-sets. Justifying compensation to boards that often value not only lower overhead/administration costs but also directing money almost exclusively to programs can be difficult, but it shouldn’t be more difficult than educating them about new program directions and the like. Too often, it’s easy for some boards to lean on the “passion” of the staff to do work that offers public good. That passion too often justifies lower salaries and causes a sense of martyrdom on staffs, who are not only underpaid, but often work even longer hours to show that they have ‘passion’ for the work. (Of course we have passion. Why would that preclude fair compensation?) The burnout rate is really high. I read or heard somewhere that the average life-span of a development officer is 18 months. (And here’s an article with similar observations.) Why? Fundraising goals are usually too high. Also, development staff are woefully underpaid for the responsibility they have. During the economic downturn, I heard so many stories from development people who told me: “If I can’t get this grant or land a big gift, people are going to lose their jobs.” That’s too much.

As a viable industry sector that adds billions of dollars to the economy, if we can’t compensate our talent properly, then we will continue to lose that talent to the private sector. And rightly so.

How can this be fixed?

  1. Educate the board. So many of them are often successful business people. If they like they way things are going, tell them that the reason is the staff and that compensation should be part of that. Find board members willing to give to general operations. The big foundations that give general operating support (thank you!) are spread thin and competition for those dollars is fierce.
  2. Set reasonable fundraising goals. Rather than padding the budget lines with outlandish figures, make better decisions. Sometimes, though boards are loathe to see it happen, programs need to be cut. Make sure that cuts are equitable across programs, overhead, staff. Too often ‘lean years’ just cost people jobs and make it even harder for a nonprofit to recover later. And are ‘lean years’ the fault of the development associate? Of course not.

Look, there are no easy answers here. So much depends on the age, budget size, and board make-up of the nonprofit in question. Every organization is in a different place and facing different challenges. But the sector is going to continue to struggle with talent retention until that talent is valued, not only ideologically, but financially as well.