The Michigan Nonprofit Association’s sixth annual Michigan Nonprofit Compensation and Benefit Survey looked at the salaries associated with 76 different positions held by staffers at over 400 participating nonprofit organizations across the state. The report found salaries for full-time CEOs range from $12,000 to over $320,592. Industry and annual budget are the two main determinants of salary.
The report, available for purchase and download on MNA’s website, is a valuable resource for hiring managers looking to attract and retain top-notch talent. This information is also highly relevant to nonprofit boards which are legally required to research and compare executive salaries before hiring a CEO — a key difference between nonprofit organizations and for-profit firms, said Kyle Caldwell, president and CEO of MNA.
“The survey allows boards and CEOs to look at nonprofit salaries … and see what the market is bearing,” Caldwell said.
Researchers found that Michigan’s market bears average salaries in the high $70,000s for nonprofit CEOs and CFOs. Nationally, 50 percent of nonprofit executives make between $50,000 and $100,000 per year.
“Nonprofits have to be remarkably transparent,” Caldwell says. “It’s part of their process. This tool helps them do their job.”
In addition to benefits information, the survey compares the salaries paid to staff members at every organizational level — from executive directors to administrative assistants, and every position in between.
Administrative assistants tended to make the least, with at least one group paying wages of just $7.00 per hour, which is 40 cents less than Michigan’s minimum hourly wage. The survey also revealed a more than $20,000 gap between the average salaries of male and female CEOs.
But even a robust median income for all executives, $67,000, may not be enough to compete with what a recent Forbes article termed “gravity defying CEO pay” in the for-profit world.
Though Caldwell personally eschews comparisons with for-profits, and within the highly diverse nonprofit field itself, even he admits: “The trends are not good.”
“There is far greater growth for CEOs in other sectors than in the nonprofit sector,” he said.
In part, this is because nonprofits have to justify their entire budget, not just revenue, to multiple stakeholders, including grantmakers, donors and constituents. That affects the amount they can justifiably offer new hires, and, in turn, the talent they can attract and retain.
“Nonprofits are mission-driven organizations so they tend to find people who are mission-driven,” Caldwell said. “But you wouldn’t run any business on the model ‘be sure to pay your CEO less than they’re worth.’ You don’t do talent management that way.”
Instead, organizations could learn how to manage talent the way the Grand Rapids Community Foundation does.
First, the foundation conducts its own semi-annual compensation survey to make sure its salaries are at or above the median market rate — in 2011, the salaries of the five highest paid staff were between $89,416 and $195,764.
GRCF also offers a competitive benefits package, insurance coverage for partners — including for same-sex couples or those “just living together” — and quirky perks like a dog-friendly workplace.
These progressive policies help GRCF attract new talent and retain current staff, said Roberta King, vice president for public relations and marketing at GRCF. Though King estimates that about two-thirds of the foundation’s 23 employees measure their tenures in decades, she says there are also quite a few new hires.
“I think that’s why we instituted a lot of those perks, to be relevant to new employees,” she said. “The partner benefits, certainly … (and) the dog-friendly workplace policy, which (cost) nothing to institute, has a certain aura to it.”
Other low-cost or no-cost amenities include a basement gym filled with employee-donated equipment and a nearby shower. The foundation also outfitted an extra room with a DVD player and a computer, so employees who have children could bring their kids with them to work on snow days or unexpected days off from school.
All these changes came in response to employee input, which leaders actively solicit, and then act on — a highly inclusive and organic decision-making process.
King says the GRCF office is the “best proof” that this system works. The executive team decided to move to 185 Oakes in downtown Grand Rapids in 2008, but only after all staff members had expressed their thoughts about the location, look and layout of their new home-away-from-home.
“We wanted lots of light, certain kinds of spaces for working and co-working,” explains King. “And a lot of the employees wanted privacy. We divided the space up so that some of the nicest real estate didn’t necessarily go to the president. Two of three corner offices went to support staff.”
Many businesses try to shoehorn their way into “employer of choice” status, following recommended practices for optimizing this and truth-telling that. But few will get as far as GRCF unless they have the foundation’s willingness to rethink top-down structures and ingrained corporate notions like who gets the corner office.
But it’s a dynamic and ongoing process. GRCF employees continue to shape and design their work experience, implementing things like flexible work arrangements and health and wellness classes, options open to all but mandatory for none.
“The senior leadership team really tries to recognize employees for the work they do and reward them with a workplace where they can be innovative and experiment and try new things in their jobs,” King said.
It’s not in the MNA survey, but Caldwell points to GRCF as a model of what he sees as a “growing trend” among nonprofit organizations: prioritizing work-life balance.
“I think one of the things that nonprofits are looking at is how do they do the work-life balance, like time you can take off to volunteer or to take care of your family,” Caldwell says.
“I think how you treat people is as important to some people as making a lot of money,” King said. “It’s stuff like that which really makes you think.”