Nonprofit Salaries DO Exist
I don’t have enough fingers or toes to count the number of times over the past 15 years I have been asked if I work for free. Last month, I ran into an old friend at a local coffee shop and their response to the news of my job: “Wow, so you work for free?” I indulged in a few chuckles before explaining that I don’t work for free, even though that is a common misconception within the nonprofit sector.
Many nonprofits are started by a group of volunteers, or a single volunteer, working for free but that isn’t the case for all nonprofits. However, nonprofits do rely heavily on volunteers to support their missions. Nonprofits are actually America’s third-largest employers according to a number of individual studies and reports like this one from Candid.
This blog features content from Donorbox blog’s piece about nonprofit salaries.
Nonprofits can pay employees
Most nonprofits have full-time team members that are paid reasonable wages. Being a nonprofit organization doesn’t mean that there are no funds to pay salaries, it just means that the organization doesn’t exist to make a profit. A salary paid to an employee is an expense, not a profit.
Nonprofit compensation
Now that we understand that nonprofit employees DO get paid. Let’s dive into what the compensation actually looks like. It is true that most nonprofit employees get paid less than their equivalent at a for-profit company. When it comes to employees of a nonprofit organization, federal and state laws should be followed. For example, each state must pay their employees at least the stated minimum wage.
When it comes to CEO and executive directors, the board of directors have a say in the entire compensation package of those roles. It’s common for nonprofits to determine salaries by researching what other organizations in their area pay.
Nonprofit salary factors
Donorbox mentions several factors that influence the salary of nonprofits. One of the major ones is location. It’s obvious that nonprofit employees in major cities like LA or New York City would make more than their counterparts in Muncie. The major difference would come down to the cost of living for those locations.
Other factors of salary include organization size, nonprofit type, responsibilities, and experience.
Want to learn more about Central Indiana’s nonprofit salaries? Download Charitable Advisor’s 2021 Central Indiana Nonprofit Salary Report.
Due to limited budgets, it may be hard for some nonprofit organizations to pay their staff what they would like and deserve. However, flexibility in work schedules, vacation time, professional development, cell phone allowance, along with other benefits can make a compensation package more attractive. It is important to keep your people happy as they are such an important asset to nonprofits.
