How Much Should Nonprofit Employees Make? How Much Is Enough?
It never fails. Every time the United Way is mentioned on my local newspaper's website, at least one person shows up to complain about how grossly overpaid their staff is. Bitter commentary follows about how United Way employees are essentially stealing from the collection plate, and why does United Way even have staff anyway?
I have no idea how much my local United Way's staff gets paid. I applied for a job there seven years ago and didn't get it, but I don't remember what the salary would have been. For all I know, the critics are completely right and the UW folks are raking it in. I doubt it, but I don't really know for sure.
What interests me about this ongoing comment campaign is that it echos a belief that a lot of people have about nonprofit employees. Basically, that they should work for free. Well, maybe not free, but probably only a couple of dollars above minimum wage. Their salaries are taking money out of the resources intended to help people, and as such they are taking food out of hungry people's mouths when they are paid anything more than a pittance.
I don't think such a viewpoint is reasonable. Yes, people who work for nonprofits know that they're probably going to make less than they would in a for-profit company. But part of delivering services effectively and efficiently is having skilled staff who aren't exhausted from working a second job at night to make ends meet.
Whenever a nonprofit executive shows up in the news for their high salaries, though, you can bet that's not helping public perception. The director of the nonprofit that organizes National Night Out makes $300,000 a year. The president of the Charlotte NC United Way (oops!) got a retroactive benefits increase that made her 2007 total compensation about $1.2 million. When people across the country are scraping by to raise their families, it looks completely ridiculous to have these "do-gooders" living the high life.
It actually reminds me of doctors' salaries. I often see stories about how doctors just "can't make enough" in various areas of practice or areas of the country. When I see that "not enough" means $200,000 instead of $500,000 or more, my mind boggles. Who can't manage a decent lifestyle on $200,000? Unless I see the phrase "massive student loans" mentioned, I have no sympathy. This isn't "not enough," this is "not as much as I want."
Back to nonprofits. There are a few different schools of thought on how much to set nonprofit staff salaries, aside from the "minimum wage is too much" idea. From my experience, I divide them up as follows:
- How much did we manage to squeeze into the grant proposal for staff on this project?
- We need to pay competitive salaries to attract talented people. Otherwise we'll lose them to the for-profit world.
- We need to pay decent salaries so our staff don't burn out.
- Part of your compensation when working for a nonprofit is your sense of satisfaction from saving the world, so you shouldn't get paid a lot.
- How much can we scrape together if we turn off half the lights and stop using the copier?
I would like to proffer a sixth option, which is this: don't be greedy. The dollars in your organization's budget are scarce, so don't take more of them than you have to. Just because you CAN get your employer to pay you $300,000, do you really need that much to live on? I'm not saying that everyone in a multi-million dollar organization should only get paid $28,000 regardless of their experience and responsibilities. I'm also not saying that you should hire a terrible executive director because that's the only one you can afford.
What I'm saying is this: can you live just fine on $200,000 instead of $300,000, leaving $100,000 for programs? I'm guessing you can, even if you live in San Francisco or NYC. In a for-profit corporation, you're sharing the profit that you helped make when you get a raise. In a nonprofit, even if you're a kick butt fundraiser, that money isn't profit. It's the organization's ability to do good in the world. Some of that good is having you around to work hard, and some of it is other things. It's up to you to decide where that balance is, and whether a Honda will do just as well for your day to day transportation as a Lexus.
Very few nonprofit employees actually drive a Lexus, of course. As The Nonprofit Quarterly observed in The Secret World of Nonprofit Salaries, the media isn't as interested in information about the actual range of nonprofit salaries as they are in high profile cases of executive compensation that seems to have run amok. So they're asking people who work for nonprofits to share some information with them about what they do and how much they get paid. If you're a nonprofit employee, head on over check it out.
[Image by Billy Alexander.]


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