PJ reader Doris H. asked an excellent question: “What seems to be the trend for salary and wage increases for nonprofit organizations?”
We asked Sherry Heuser, president of nonprofit-search firm Capability Company, to take a stab at the answer:
Not all nonprofit organizations were hit the same by the economic crises over the past few years.
Although donations and endowments in general have decreased in number and value, some organizations rely on revenue streams that did not decline, or have longer-term funding patterns that do not fluctuate as rapidly.
Many of these nonprofits have been able to continue to pay strong salaries and provide regular wage increases according to plan.
However, the majority of nonprofits were impacted by the downturn in the economy. Although many had to lay off employees or reduce salaries, the majority were able to make it through by freezing salaries and bonuses or managing around unfilled vacancies.
For organizations that weathered the turbulence and feel more stable now, although not necessarily flush with cash, reinstating bonus programs and filling vacant positions have become priorities to keeping an engaged workforce.
Recognizing that staff made sacrifices to ensure the program’s continuation, many organizations are finding ways to reward employees and recognize their value, even if the old bonus structures and salary ranges have been modified.
This trend toward thoughtful review of employee compensation, not the expectation that a strong workforce can be maintained indefinitely without providing professional-level salaries appropriate to each position and opportunities for growth, is gaining momentum among the nonprofit sector.
Organizations that were sidetracked by challenging budgets from their previous employee compensation plans are getting back on track, but sometimes a less aggressive one.
The most recent federal data, in this report from the federal Bureau of Labor Statistics, is from 2008 and therefore won’t reflect the full impact of the recession on the nonprofit sector.
However, page six of this report from GuideStar touches on salaries, wage increases and employment issues.