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3 Ways Nonprofits Get Compensation Wrong

Posted by David Fantin on 7/27/15 1:05 PM

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Most nonprofit organizations have very profound and honorable missions. Unfortunately, some of these organizations are held back from accomplishing their mission due to staff turnover or failure to attract quality staff.

Many of these problems can be traced back to the compensation scales that the organizations use. Sadly, nonprofits have a reputation for poor compensation.

Here are a few ways that nonprofits miss the mark in the compensation arena.

1. They rely on staff to be sold out to the mission.

Many people who work for nonprofits do so because they buy into the vision and mission of the organization, which is a wonderful thing. Unfortunately, sometimes the mission of the organization is used to leverage a lower pay scale for staff. While it is true that our “reward is in heaven,” that is not an excuse to pay your staff pennies for their hard work. As a nonprofit organization, if you are unable to compensate your team properly, then consider hiring fewer staff members and compensating those you do have better. Don’t leverage your mission and use it as an excuse to pay your team less than you should.

2. They fail to compare their salaries with for-profit organizations.

Let’s say a nonprofit organization is looking for a Video Content Editor who has extensive experience with both shooting and editing videos. They need the candidate to have at least 3 years experience and a strong portfolio full of high caliber examples of their work. However, they are only paying this Video Editor $35,000 a year.

Experience and talent comes with a price, and in the for-profit sector, the Video Content Editor I described would be making over double what that nonprofit is planning to pay them. If you are unwilling to pay someone competitively and based on their experience, chances are you will have to scale back your growth or settle for staff members with less experience. Before you begin hiring for a position, consider a compensation analysis using a large sample size of other nonprofits similar in size and budget to yours. Most importantly, use a tool that allows you to use comparables in your same zip code. Our team here at Vanderbloemen Search Group conducts compensation consultations including zip code analysis, so we are happy to help you determine what you should be paying your staff.

3. The staff is not a priority.

Some organizations fail to see the value in searching for and retaining quality employees. Your nonprofit may have a wonderful service to offer, but when you have a subpar staff, you’ll find growth quite difficult for your organization. Recruiting great staff members and then compensating them at a fair rate shows that you are invested in their success, and it allows you to build a team that can propel your mission and vision forward. Your staff is the greatest asset to your nonprofit organization.

If you are interested in where your organization stands in how you compensate your team, we’d be happy to talk to you about our custom compensation consultation.

What are ways that organizations can ensure they are compensating their team properly?

If you liked this, then you’ll also like 8 Costly Church Budget Mistakes.

Topics: For Profit & Parachurch, Senior Leadership

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