4.16.2008

My Pet Issue #5: Equal Pay for Equal Work in the Nonprofit Sector



I feel like if organizations won't pay their employees a competitive salary, then they are obligated to recognize the deficit between the for-profit and non-profit industry salaries as actual in-kind financial donations that employees can then write off their taxes.

Click for full article.

As nonprofit groups increasingly compete with business and government employers to attract young workers, many people in their 20s and 30s are pressing charities to improve salaries, offer greater opportunities for career development, and do more to promote the diversity of their work forces.

In follow-up conversation to a survey of 1,650 released by the Young Nonprofit Professionals Network last year, which found burnout and low salaries threatening to drive young charity workers away, members of the group held a conference here to discuss how they can bring about changes that will reshape nonprofit organizations in ways that make them more inclusive and give greater opportunities to emerging leaders.

9 comments:

  1. "I feel like if organizations won't pay their employees a competitive salary, then they are obligated to recognize the deficit between the for-profit and non-profit industry salaries as actual in-kind financial donations that employees can then write off their taxes."

    I think that's an incredibly interesting idea, and one that would definitely attract people to non-profits. Thanks for the article link.

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  2. Hmm. So are you saying that taxpayers working in for-profit industries should subsidize those choosing to work in non-profit?

    So someone working at McDonalds or Target or Bank of America would pay their full tax burden, while their counterparts at non-profits would reduce their tax burden?

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  3. Essentially. I'm saying that people who contribute funds to nonprofit organizations are provided a tax benefit by the federal government for their gifts.

    Volunteers who are considered "professionals" (as determined by IRS tax law) are also able to consider their donation of labor a financial donation. The nonprofit organization can itemize that labor as a received contribution of cash value.

    That said, professionals who work for nonprofits at a rate below their for-profit counterparts should be entitled to write off their labor contribution (the unsalaried portion they are "giving up" by working for a charity).

    If, for example, McNonprofit, a not-for-profit restaurant chain, paid its employees $6.50 an hour while a comparable for-profit restaurant in the same location paid $7.50 per hour, the nonprofit employee should consider that $1 discrepancy a charitable, tax-deductible contribution to the nonprofit restaurant. Since pay rates in the for-profit arena are market-determined, it makes sense that nonprofit salaries should also be market-equitable.

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  4. Of course, nobody goes into the non-profit sector the for $$. I think it would benefit non-profits if they treated their people better, ie offering better benefits, more flexibility, better perks, in exchange for what they know to be lower wages...the folks I've known who have worked as full-time employees for non-profits have seemed to have very demanding schedules, unreasonable bosses, and unpleasant working conditions, on top of the low pay. What do you think?

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  5. Because people don't go into the nonprofit sector for the money, the sector ends up attracting a lot of otherwise unemployable people, workers who wouldn't survive in a more demanding, more cutthroat, less touchy-feely corporate-style environment.

    And this, then, leads to poor management, long hours, demanding workloads, etc., as you mention.

    Imagine if the most talented workers were attracted first to the nonprofit sector. Talent acquisition has been a corporate priority for years, but nonprofits tend to fill empty seats with butts, not skills, and they haven't done a good job of developing employees to take over open management positions.

    Salary isn't the most important compensatory action, but it's a significantly metaphorical one to employees.

    But I don't support the ideology that "nonprofit employees just accept lower pay rates because they're doing work they care about." I think that's a fallacy, and one perpetuated by many workers themselves...

    What do you think, Jeannine?

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  6. Yes, I have the same concerns. I'm very attracted to working for non-profits, and at the same time, scared off because of the low pay AND the scary work environments I've seen. My mother also had one of her worst work experiences working for a very worthy cause (and a terrible, insane boss.)Sometimes I've found the volunteers get better treatment than the non-profit employees.
    I think there is a long-standing fear of paying employees in non-profits "too much" because of overhead criticisms? At least that's the justification I've heard. But you're right - if you want the best people, you have to be willing to pay a premium, profit or non-profit - that's just logic.
    I bet the Poetry Foundation pays decent salaries. Mmm, dream jobs...

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  7. Are non-profit salaries not market-determined?

    Don't they have to be, by definition, as evidenced by the fact that anyone at all works in non-profit?

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  8. Nonprofit salaries are really driven primarily by organizational capacity, not by the market.

    But there's a kind of "habit" among nonprofits, a guiding prejudice, that dictates an overwhelming majority of a nonprofit's expenses go toward programs (service delivery)--say, a healthy 75% minimum, a modicum toward administrative costs (operating expenses and salaries) of about 15%, and 5-10% toward fundraising costs.

    People are drawn to working in nonprofits for many reasons:
    1. They are inept and cannot survive in a for-profit/corporate atmosphere
    2. They have an existing connection to the target population (family member survived cancer, for example) and want to make a difference, offer help/relief/support to others like them
    3. Their sense of personal justice and charity supercede their desire to self-preserve.

    Yes, it's an interesting mix. 1 and 2 (or a combination thereof, as they aren't mutually exclusive) seem to be the norm, by and large, but keep in mind that the people representing 1 and 2 typically have no formal business education or training in administration, so they are:

    trained on the job
    unprepared for advances in responsibility

    and because of the funding sources for nonprofit salaries, they are often

    doing conflicting job functions in a single position.

    In my first job, I: planned events, published a magazine, was the organizational accountant, managed supplies, wrote contracts, created websites, modeled for ads.

    It's a strange world. But small businesses tend to run the same way much of the time, but small business owners profit from excesses of revenue, while nonprofit employees do not.

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  9. I agree with most of what you have discussed here except for the generalization that many who choose to work for non-profits are inept and end up working there because they can't cut it in the business world. Although that may be true for a small percentage in the non-profit world, it's certainly not true for all and it should not be generalized. I have had several different experiences in the human service/social work world, both for-profit and non-profit and feel that many non-profit employees posses a great deal of talent in their fields and should be paid accordingly. Most are not simply "butts" that have been hired to fill spots. I agree that there is a major discrepancy between what non-profit employees make and pretty much everyone else but I also think that that stems from the overall attitude of our society. Unless policies that support our non-profit causes are written, lobbied for and passed at the state and federal levels, non-profits will continue to struggle to both provide quality services and pay their employees. Our society values professional sports stars, not those "touchy-feely" social workers. That needs to change first.
    Despite the fact that I disagree with some of what you've said, as I personally do not fall into any of the three categories that you listed, I am interested in your idea of counting a portion of a non-profit salary as an in-kind financial donation that employees can write off in their taxes. And I also feel that non-profits should offer better benefits, greater flexibility and improve working conditions. I too have had many scary and horrible experiences due to bad working conditions.
    I'm glad someone is talking about this. I'm currently working on a master’s degree in social work and this is something we discuss all the time in my classes.

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