Whether you are a founder, board member, or managing director of a non-profit, you have the distinguished responsibility to ensure that the organization achieves its declared mission. Sometimes, it may seem like as your organization accomplishes more, people expect more. The stakeholders are numerous. General public opinion, the media, donors, and even the satisfaction of your employees are constant reminders that the job really is never over. Therefore, once you achieve the operational goals that you and your colleagues diligently planned for, maintaining the balance of vision and fiduciary responsibility is a challenge.
Although employees believe in the mission, non profit organizations remain part of an industry and workers desire to be competitively compensated. While employees may love what they do, non profit salaries are a topic that must also remain part of an ongoing dialogue with managers. After all, when employees feel heard and valued, they are in a much better position to propel their organization forward with energy and inspiration.
Non Profit Salaries, Funding, and Overhead Costs
As you know, guaranteeing that your organization is adequately funded is always a task at hand. Expanding your programs to address a pervasive need is noble; however, before you commit to developing a new program, you must first know what impact the additional work will have on the health of your organization overall. Questions arise, such as, do we have the resources to take on another project?
New funding may come in which will cover the costs of materials, insurance, transportation, salaries, and goods distributed; however, what indirect effect will it have on the present cost of overhead? Will you need to increase office hours or staff? Do you have the space you need? Do all parties involved in accomplishing the mission agree with the execution of your plans?
Make sure communications are thorough and well-documented because failures in this area can be embarrassing if not costly. These are key considerations that increase the likelihood of the continued success of current programs as well as ones only in infancy. Don’t be hesitant to raise a warning to your Board early on if you see some potential gaps in budget or forecasting calculations. Fortunately, once you get donor commitment and can report on program impact and statistical outcomes, you generate the excitement and confidence you will need to solicit their continued support.
How Leading on Compensation Keeps Employees Satisfied
While you might be eager to propose new programs or simply improve present ones, you rely on the dedication of your staff to fulfill their roles and responsibilities. Unfortunately, human resources (HR) departments of non profits nationwide report that 1/3 have had difficulties in both staff retention and recruitment. This means that many experience constant turnover, which poses a huge problem for management. Translation: managers spend many working hours on interviewing and exiting staff alone. These are hours spent away from running the programs you cherish most.
Employee satisfaction presents another challenge for HR and management. What satisfaction is can vary widely depending on who you ask, but according to 2018 statistics, about 1/2 of employees are not pleased with their non profit salaries. Businesses, like non profits, have this in common. Salaries are costly, notwithstanding other employee benefits, such as sick leave, vacation, health care, and 401(k) plan sponsorship.
At this point, you might also want to start looking at what hiring, training, and lost productivity from terminating staff cost your organization each year. If you aren’t convinced, begin asking departing employees why they are leaving during their exit interviews. Or, seek the advice of a non profit expert on how to boost employee compensation while keeping your eye on the budget. It can be done! In the age of the internet and social media, employees can find out what others are being paid with similar tenure and experience as theirs in seconds.
Remote work also adds flexibility to work arrangements. This can be a plus for people who commute to work, are in school, or have children at home sick. It also demonstrates that your organization values your employees’ judgment that they can continue to be productive at their jobs no matter where they are. Consider adding a secure external link to your network which allows employees the flexibility of working remotely during bad weather or other inopportune events.
The Business of Non Profit Organizations
Running an organization that is inherently non-financial is not a straightforward mission. You rely on funding from a variety of sources, including:
- Foundation Grants
- Fundraising Events
- Government Grants
You have a fiduciary responsibility to stabilize and increase revenues from those resources year after year to secure an uninterrupted flow of capital into your organization. Non profit consultants such as SD Mayer Non Profit Advisory team can investigate how you use those resources to potentially uncover new ways of increasing your bottom line without cutting corners where it matters most. Through the years, numerous non profits have benefited from this knowledgeable team of professionals who can help you balance your employees’ professional goals with the core mission of your organization.
If you’re interested in striking a better balance between non profit salaries at your organization and keeping your mission on track, SD Mayer advisors can help. They can do a holistic assessment of your finances and help you craft new and exciting ways to ensure that you can continue to serve both your employees and your community. Contact us today to get started.
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This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. The services of an appropriate professional should be sought regarding your individual situation.