While much of the conversation about nonprofit pay focuses on how we are not paid enough given the work we do, every now and then someone will attract the wrath of the public for having what is considered a salary that is too high. Honestly, I generally don’t share the indignation because there is never any context given to the numbers. There are a few questions I think we should answer when deciding whether or not pay is excessive:
- What percentage does this take of the organization’s budget? We accept that, as a rule, the larger the organization, the larger the salary but have we come up with a percentage that shows once executive pay reaches this point it can have negative consequences on the organization?
- What is the overall financial health of the organization? Connected to the first question, have we established processes to determine whether the pay makes sense given how well the organization is doing and that nothing is being done inappropriately?
- What is the treatment of other employees? The argument that high salaries and benefits should only be given to executives doesn’t sit well with me. Talent is needed at all levels, so in order to recruit and retain the best throughout the organization, everyone should be paid well.
- And of course, the biggest and kind of silly question that I like to ask: what’s the organization’s impact on the community it serves? If they are doing what they set out to do, what’s the concern?
Without context, we can’t develop methods to defining and providing a competitive yet fair salary. It becomes arbitrary and reveals more about how we expect nonprofiteers to only be in it for the love of social change without accepting that social change requires excellence, competence, and tenacity, not just warm feelings or sweet ideas.
We’ve done a great deal of comparing and measuring when it comes to classifying nonprofit pay as being too little. Why haven’t we done the same when determining whether it is too much (especially when, to be frank, it’s RARE. High salaries are the exception, not the norm).
The outrage concerns me because it extends beyond the executive in question. People begin to demand that the entire sector be checked and begin to doubt whether their donations are making a difference. Feelings of mistrust, however misguided, fester because an explanation of the pay and and more rigorous debate of our expectations of nonprofits do not occur.
How do you determine whether or not pay is excessive?
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Not sure if this is directly related, but I happened to have had a very interesting conversation with a woman who owns a pre-school in Inglewood, CA. She has had the school for X amount of years (I forgot to ask how many), and before that, was a principal at other elementary schools and middle schools.
The area where her school is located is fairly low-income, mostly people-of-color, and she says she has Social Services showing up here and there to make sure that the kids are actually coming to school, and the parents are actually bringing them, and picking them up, etc. Other than that the kids don’t care, and the parents care even less because the value of education is not emphasized beyond the walls of the school. Her jadedness was a little discouraging.
But I understood where her jadedness was coming from. It’s like if your passion and big ideas are not rewarded with the results you wish for, you could end up being very ho-hum about what you’re doing. But I kept thinking “isn’t this where the people need the help?”
Her message was clear — stay out of the ‘hood, and make sure I get paid. I’ve had other conversations like this before, ones where you have to negotiate your passion/desire to do good, and make sure you can pay your rent on the 1st. And you wish that you could do both, without them being in opposition to each other.
Maybe you have had conversations like these — with folks who have been in the game a long, long time, and it seems like they’re all but wringing their hands in frustration. What might you say to someone like this? And isn’t it messed up that it seems like you can’t save the world and get paid too?
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ajlovesya Reply:
February 1st, 2010 at 1:37 pm
I think you are bringing up a separate, but closely related issue. Working towards social change and not seeing it happen as quickly or in the manner you envisioned can certainly lead to not disillusion. The assumption is that if you are taking such a deep pay cut that you will get a return in some other form (in particular the benefit of seeing change).
Unfortunately, any time in the field will tell you that it simply isnt that easy. if at all it took was some kind words to make people stop abusing their children, for example, then guess what? We wouldve solved child abuse a long time ago. Instead I think it speaks even more to the need to ensure that nonprofit employees are better compensated. Simply put the psychic benefits of being in the nonprofit sector are overrated and it takes a long time to see the change we work so hard for.
And to be perfectly honest, there is something really annoying about people saying “stay out the hood and get paid.” For one, you dont need to work in the “hood” to bring about change, secondly getting paid will not console you for abandoning the desire for change that drove you to the sector in the first place, and lastly, just because folks arent doing what you want them to do doesnt make them unworthy of assistance. There is a level of entitlement that many people in the sector have that the people they are working with owe them something.
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Hi, Allison. I appreciate your post – recognizing that context must be understood before we begin to critize. I have also blogged about the controversies surrounding executive pay. You may be interested: http://jessicajourney.wordpress.com/2009/10/23/toohighinthesky/ Thanks for sharing your thoughts!
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ajlovesya Reply:
February 1st, 2010 at 1:38 pm
Thanks for sharing, Jessica!
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I agree with your points and commend you for including the criteria of compensation for non-executive employees, which relatively few of the other commentators re: executive pay have mentioned. Regardless of the impact on the community served, nonprofits also have a responsibility to take care of their community of employees–that means good pay and benefits for ALL employees.
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ajlovesya Reply:
February 1st, 2010 at 1:43 pm
Absolutely! Too often we neglect other employees and a change in this approach would benefit the sector.
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“How do you determine whether or not pay is excessive?”
My answer would be that you don’t determine whether or not it is excessive. Rather, you ensure that the level of pay is publicly known to donors and potential donors and you let them decide firstly, whether or not they are interested in that information, and second, whether the pay is at such a level as to influence their giving or not.
The non-profit sector should not be shy about paying equivalent wages to the with profit sector. For a non-profit to survive it needs to be sucessful. If wages are ‘capped’ for whatever reason, you may lose some othewise highly talented people.
The ‘usp’ or unique selling point of non-profits isn’t and shouldn’t ever be that they pay less. It is and should be that they pursue a particular kind of agenda devised to support a cause or mission.
http://www.non-profitplace.com
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