How Much do You Make and Should You Make More?

I would like to start a discussion on a very private matter. Money and how much the non profit industry tends to pay people. Now that I have opened a can of worms, let me dig deeper.

I was talking to a friend the other day who works in the non profit sector, and she confessed that she was having a tough time making ends meet.  She felt that without the added income she made in her small business, after hours, she would not survive financially.

At the risk of being forward, I asked her, what she made. Her reply? About $45,000 she said. Her answer floored me. Here she was in a senior position at a good sized organization, university educated and over 15 years of professional experience, and she was not even at average income .

I then started thinking about others who I know in this sector, and realized this is challenge that most organizations struggle to deal with. For years, I have been an advocate of higher pay in the sector. Talk to any board I served on, worked with or leaders I advocated for. People need to be paid what they are worth. But how do we determine what an employee is worth?  Fortunately, there are some salary guides for the sector  —Payscale  htttps://www.payscale.com/research/CA/Job=Executive_Director%2C_Non-Profit_Organization/Salary or the Non profit salary report (https://charityvillage.com/cms/knowledge-centre/sector-reports/2017-salary-report)

What I see, straight off the bat, is a sector that pays its employees 20-40% less than someone in the private sector would make for similar work. The non-profit sector has a chronic problem with underpaying its staff.

I have heard arguments supporting this salary differentiation, that the sector is not as “productive” as the for profit sector and to an extent this may be true. On a per capita basis, compared to the average SME, many non profits are more stagnant and less innovative, albeit this is changing in many areas of the sector which are entering into social enterprise.

Critics of the sector will cite it being underpaid because it is a largely feminized workforce. In theory they may be right, however part  of the fault lies with those who work in the sector. When we stop accepting lower salary norms, and start demanding higher salaries, wages will rise. There is a mentality that suggest that sacrifice is required of those who work in the sector—this is an attitude that needs changing. If you want excellence, you have to be prepared to pay for it.

Another consideration in determining pay, should be the level of risk the organization engages in. Social enterprises, by definition, are riskier ventures in that they are market oriented. In my mind, the riskier an enterprise, the more its leader should be paid. This may seem counter-intuitive, since start-up social enterprises are often on tighter budgets, but any individual with the vision to scale an organization through a market orientation, needs to be compensated appropriately, or guess what, they will soon leave for greener pastures.

Further as a manager, I would want to pay my people well.  Consider my friend. As her manager, do I want her stressing about having to make money from a side business during work hours? Will she not be a better employee if she doesn’t have to worry about she will make her rent or car payments and can focus on giving herself 100% to her job? Will she not be a more engaged employee?

I know the sector is always underfunded, but I think as talented individuals, our key employees, need to be compensated adequately. Now money is not always the solution. For some, it is extra vacation time, benefits or even title changes. There are many ways to compensate, but at the end of the day, everyone has to pay their bills, do-gooder or not. Isn’t it time, we paid people what they are worth?

Are you a chronically underpaid employee? Are you a manager who wants to pay your staff more but does not know how? What are your thoughts?  Looking forward to hearing your insights and thoughts.

 

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