Nonprofits and Pay

Most non-profit workers attach themselves to their agency’s mission, leading management to think pay is far down on the priority list. I’ve participated on several non-profit boards and usually cringe when executives report how much money is dedicated to client services and how little to pay, benefits, and other “overhead” expenses. For sure, donors want to know that the majority of their donations go to the agency’s cause but the risk is that non-profit employees are willing to take substantially less pay that they can make on the for-profit side. A study published in the Review of Public Personnel Administration tells us employees are aware of the pay issue and have loyalty limits, that sometimes mission is not enough. The solution includes benchmarking pay against similar jobs in the private sector. If your best employees can make more elsewhere and are critical to your service delivery, why not pay them to keep them?