Why compensation matters

A while back, Dan Pallotta wrote a piece on nonprofit compensation for the Harvard Business Blog.  It wasn’t about ‘CEO’ compensation.  It’s about regular ‘ol us, those in the nonprofit workforce who occasionally realize that the warm fuzzy feeling of helping a cause may not be enough to pay our bills, send our kids to college, or live our own American dream. (Note: if you ARE an Exec – read on, you can help too)

The crux of Pallotta’s point is “The fact that someone makes a one-time sacrificial gift doesn’t mean you’re obligated to make a lifetime sacrificial career choice.” Besides all the known looming issues of the nonprofit leadership shift, it seems we’re adding the personal dilemma of compensation to the list of reasons NOT to work in the social sector and paying people just enough that they don’t quit.  I’ve often heard “Just because I WORK for a charity doesn’t mean I AM one”.

The longer the sector settles for no raises, decreasing help but more work (in both hours & need) and no adjustment for inflation (note: we’ve done it for years – not just since ’07 like everyone else) the less attractive we become to the increasingly talented pool of Gen X-ers, Y-ers and Millenials who are leading major social efforts today…not tomorrow…but TODAY.

Executives and decision makers – you’ve got a choice, and it’s all in the hiring. You can hire for spots paying low-mid 20s and continue to cycle through less-qualified, less-educated, less-prepared folks who (shockingly) produce…less.  OR, you can push the envelope, take calculated risks and bump the salary range in crucial areas and hire a rockstar, who will stay longer, engage more people, improve the organization, and push us all to be better at what we do. If enough of us take that step – the sector hires better talent, becomes stronger and eventually (heaven forbid) competes with the other sectors for the TOP talent available, not just the leftovers.

Every time we settle for an absurd entry level salary or accept a pat on the back after a stellar review – we devalue ourselves, our work, our  sector AND often feed the stereotype that ‘nonprofit professionals’ are really ‘those people who don’t have to work’ or ‘who couldn’t make it in the real world’.  Worse, we further the notion that society values the size of your bank account over the size of your community impact.

Instead, be proud of your skills, the cause you move forward and your great results. Next time – push a little harder to be compensated for it.

Agree or Disagree? Please share your thoughts in the comments.

11 thoughts on “Why compensation matters

  1. This post is spot-on. Generation Y has already built a reputation for being transparent, entrepreneurial, and public service motivated– which are all extremely important qualities for the nonprofit sector right now. (Not to mention, public service motivation can help *bring* them to the nonprofit sector.) However, low wages will make these self-starters take on social change projects on their own, making finding high-quality workers even harder. There’s also a huge risk that Gen Y will overpass the nonprofit sector and bring these traditionally-nonprofit skills into the private sector which will create direct sector competition for creating change… which may not turn out so well for nonprofits. In short, abiding by Guidestar’s low administration cost standards may LOOK good to uneducated donors, but celebrating super-low administration costs may have a detrimental long-term effect on the evolution of the sector.

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