Lately, it seems that any sentence containing the words “nonprofit” and “compensation” is related to the scrutiny of pay provided to the presidents and other top executives of organizations. However, for most nonprofit organizations, far more compensation dollars are paid to the broader, non-executive employee population.
Continue reading ’2010 Nonprofit Human Resources Conference: Pay for Today (and Tomorrow)’
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My presentation from the June 2010 Nonprofit Human Resources Symposium at the University of San Diego outlines the steps nonprofit organizations can follow to develop an implement an effective, performance-based base salary compensation program.
I’m honored that my recent post “Development in Demand: Challenges for Fundraising Professionals & Employers” was among the four selected for the May Nonprofit Blog Carnival, hosted by Mark Horoszowski on his Helping Help blog.
California, here I come!
I’m excited about participating in the San Diego Nonprofit Human Resources Management Symposium on Wednesday, June 16th, 2010. The event is sponsored by the Institute for Nonprofit Education and Research, part of the University of San Diego‘s School of Leadership and Education Sciences, and will take place on the USD campus.
Nonprofit Employment Trends
I look forward to participating in a panel discussion framed around the results of the recently completed 2010 Nonprofit Employment Trends Survey. This survey, conducted jointly by the Caster Family Center for Nonprofit and Philanthropic Research and Nonprofit HR Solutions, examines the employment practices of over 500 nonprofit organizations nationwide. Our discussion will focus on key findings including staff size and projected growth for 2010-2011, recruitment strategies and budgeting, key staffing challenges, and staffing resource management.
The Path to Pay for Performance
Following the panel discussion, I am conducting a seminar which will guide organizations in preparing for, developing, implementing, and maintaining effective, performance-based salary programs. We will examine the rationales, prerequisites, steps, and tools for a successful program, and participants will have the opportunity to ask questions about implementing pay for performance in their own organization.
Update: Click here to view the presentation
Other panelists and presenters at the symposium include:
- Lisa Brown Morton, Nonprofit HR Solutions
- Laura Gassner Otting, Nonprofit Professionals Advisory Group
- Emily Davis, EDA Consulting and YNPN San Diego
- Christopher Olmsted, Barker, Olmsted, and Barnier
- Ann Shankin, Nonprofits’ Insurance Alliance of California
- Karen Kramer Horning, NextLevel HR
- Sherri Petro, VPI Strategies
Click here for more information and to register for the symposium.
I hope to see you there!
PS: Nonprofit HR Solutions is also the force behind the 2010 Nonprofit Human Resources Conference in Washington, DC this October. I look forward to attending and presenting there as well.
Photo credit: SD Dirk 
For the vast majority of the country’s more than 1.2 million registered 501(c)(3) organizations, the development function and fundraising professionals have always been of critical importance.
Today, while the profession itself faces challenges on a number of fronts, organizations face rising demand for qualified development professionals, the need to maximize their return on investment in fundraising staff and pressure to intensify efforts to attract and retain successful fundraisers.
The Landscape
Recent years reflect significant expansion of the nonprofit sector with the number of registered 501(c)(3) organizations increasing by 90% from 2006 to 2009. Given the current economic climate, these organizations are competing for fewer charitable dollars as individual, corporate and foundation giving have declined. According to a study released last month by the Association of Fundraising Professionals, 57% of American and Canadian nonprofits received less or the same giving dollars in 2009 compared to 2008.
While most organizations are, at best, cautiously optimistic that the economy will improve in 2010, it is reasonable to assume that charitable giving will lag behind any economic improvement. Foundation giving, in particular, is expected to remain flat in 2010 and improve only slightly in 2011 according to a recent Foundation Center report. Government funding for many organizations, particularly at the state level, has also significantly declined. Completing the perfect storm, the recession has led to increased demand for services from many nonprofits.
Changing Field
As if the economic landscape wasn’t challenging enough, fundraising professionals also increasingly find themselves in need of broader skill sets. A recent Chronicle of Philanthropy article summarizes the views of executive recruiters and fundraising experts who say that people skills alone no longer make for a successful fundraiser. Instead, emerging trends will create demand for development professionals who also possess entrepreneurial ability and spirit, who have cross-cultural and generational knowledge and who are strategic, analytical and technologically savvy.
Demand Rises
All of these forces combine to increase the demand for qualified fundraising professionals, and the job market for such positions appears to be on the rebound at least in some markets. The Association for Fundraising Professionals reports that listed job openings for fundraisers have increased every month since January and are now at November 2007 (pre-recession) levels. The job market is expected to continue to loosen especially for seasoned, broadly skilled development pros with a track record of success.
It Takes Money…
While development professionals are essential to a nonprofit’s survival, each fundraising position hired represents a significant organizational investment. The following table details the current median base salary among all organizations nationwide according to salary.com:
According to survey results released earlier this month by the Association of Fundraising Professionals, the median salary for all fundraisers nationwide was $66,000 in 2009, an increase of 3.9% from 2008. The survey found that highest salaries were paid to development professionals working for consulting firms, with a median salary of $80,000. Among charitable organizations, the highest median salary levels were found among fundraisers for educational institutions ($71,200), hospitals and medical centers ($71,000) and other health organizations ($67,000).
None of these figures include the additional expenses related to any bonus or incentive compensation, statutory and other benefits, and taxes.
Keeping Finders
As with any position, turnover brings even higher costs. Penelope Burk, a Chicago-based fundraising consultant, estimates it costs 65% to 83% of a fundraiser’s annual salary to replace him or her. In a presentation at the Association for Fundraising Professional’s annual meeting last week, she also agreed that turnover among fundraisers will increase as the economy improves previewing findings from recent research that suggest 48% of the 1,200 development professionals she surveyed would leave their current jobs for higher pay.
Ms. Burke reasons that this finding may provide an argument for organizations to increase rewards for top-performing fundraisers, but she also suggests other strategies for their retention including increasing their managerial responsibilities, creating succession plans and offering more flexibility and other non-monetary benefits.
In light of the economic and charitable giving climate, the changing nature of the development profession, and the need to compete for qualified talent:
- What demands face your organization’s fundraising function and professionals?
- Have your organization’s development staffing levels or needs changed?
- What is your organization doing to attract and retain high-performing fundraisers?
A version of this post originally appeared on the Mission Connected Blog on April 20, 2010.
photo credit: nDevilTV
In a recent post, compensation consultant Ann Bares questions whether salary ranges, long a staple of compensation programs among America’s companies and organizations, are still a useful tool given the relatively slow pace of annual salary growth during the past two decades.
There is no question that administering salaries — and, in particular, differentiating rewards according to performance — is challenging in what I’ve long described as a “four percent world” (or, perhaps, for the past two years, a “zero to three percent world”). However, I believe that for the vast majority of nonprofit organizations, salary ranges remain an important and effective tool. This is especially true for growing nonprofits which find themselves adding staff and needing to ensure that salaries are equitable and competitive while simultaneously managing compensation costs.
A couple of years ago, I was retained by an organization in just that situation. The organization, which had been in existence for about 20 years, experienced significant growth through the previous decade, growing from fewer than 50 employees to more than 200. One of the problems the organization was experiencing was a high level of employee turnover, particularly among young, high-potential employees in their second and third years of employment. The organization’s management assumed this was related to compensation.
As I began to speak with employees and managers, I found that there was, in fact, a connection to compensation. But, rather than dissatisfaction with the actual compensation levels, an issue that emerged was that employees had no sense of what future opportunities existed compensation-wise in their current jobs or in positions to which they might aspire. Employees also questioned whether there was consistency and equity in compensation levels and the linkage between pay and performance.
Salary ranges are the foundation of a compensation program that can address each of these concerns and can serve the needs of a nonprofit organization and its employees in a rational, straightforward and effective manner.
Continue reading ‘Salary Ranges 101′
I’m honored that my recent post “How to Be A Great Nonprofit Employer” was among the seven selected as the best nonprofit posts of the month in the April Nonprofit Blog Carnival, hosted by Jeff Brooks on his Future Fundraising Now blog.
“Managers are commonly ill-equipped to understand the dynamics of their compensation costs, never mind monitor and control them.”
I was struck by this statement by Chuck Csizmar in a recent post on the Compensation Cafe blog. Chuck was making a case for companies to focus on the return on investment (ROI) for employee compensation, and he went on to discuss the reasons for and consequences of managers making poor compensation decisions.
I have to agree with Chuck about managers’ abilities in this area, as this phenomenon is at the heart of a challenge I have repeatedly faced when working with nonprofit organizations to overhaul and improve their compensation practices. But, rather than ruing the fact that managers lack these skills and looking for ways improve them, I suggest that there is no real need for the vast majority of managers to develop them in the first place.
Continue reading ‘The Buck Stops Where?’
Much conversation and debate in the nonprofit and philanthropic communities these days revolves around how to determine which organizations are the “best”. Fortunately, there seems to be a consensus away from basing such determinations on measures such as overhead ratio and administrative expenses and towards evaluation of impact — but that’s a topic for another day and post.
Employee opinions offer another perspective on a nonprofit’s quality.
Another perspective on a nonprofit’s quality can be found in the opinions of the organization’s employees. A recent study by the NonProfit Times and Best Companies Group used such opinions as the primary basis for identifying the “50 best nonprofits to work for in 2010″.
In the study, employee’s responses to a written survey accounted for 75% of each organization’s score. The remaining 25% was based on assessment of the organization’s benefit offerings and other practices, using a proprietary methodology.
Continue reading ‘How to Be a Great Nonprofit Employer’
In this video, nonprofit executives and board members are reminded of the risks associated with not having a formal executive compensation policy and provided with guidance as to how to strengthen their organization’s governance of executive compensation.
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