Jobseekers in Michigan may want to consider careers in the nonprofit sector.
This year, about 45 percent of nonprofits throughout the state said they plan to hire, according to the 2017-2018 Compensation and Benefits Report from the Lansing-based Michigan Nonprofit Association (MNA). Another 53 percent of nonprofits have no plans to hire additional staff, while 1.6 percent indicated that they were planning layoffs.
Bill Gesaman, strategic growth officer for the MNA, said layoffs likely are due to shifts in societal needs.
The report includes detailed compensation and benefits information for 74 full-time and part-time job positions including chief executive officer, development director and receptionist. It is based on responses from 323 nonprofit organizations from 53 Michigan counties.
“One of the main priorities of this report is to help nonprofits attract and retain quality employees who can help drive their mission,” Gesaman said. “Nonprofits can use it to rationalize compensation to their board. The report contains benchmarks which show that a nonprofit may either be ahead or behind in specific areas of compensation and benefits. This allows nonprofits in all regions of Michigan to be more competitive.”
The Internal Revenue Service requires boards to determine CEO compensation based on trends, research, and market forces, said Kyle Caldwell, executive director for the Dorothy A. Johnson Center for Philanthropy at Grand Valley State University.
“Boards are also required to report their highest compensated employees and it’s important to compare those compensations to the rest of the market,” Caldwell said. “It is a competitive marketplace, like any other, and you need to know salary data to remain competitive.”
Nonprofit boards also use the report strategically in the succession planning process, which is becoming an important issue ahead of retirements from key senior positions. In fact, about 60 percent of CEOs and executive directors are baby boomers, according to sources.
Many of these leaders founded the organizations they now intend to leave.
“As that generation continues to age out of the nonprofit workforce, board members are focusing on creating plans to address succession so there isn’t a big leadership gap,” Gesaman said. “They’re looking at how they can develop talent that can move into those leadership roles.”
As part of its analysis of leadership roles, the report indicated that female CEOs have surpassed their male counterparts in years of experience. Gesaman interpreted this to mean that more females are being hired as CEOs.
Caldwell believes the report signals an uptick in opportunities for women and people of color who aspire to leadership.
Millennials, who account for 44 percent of the nonprofit workforce, play a key role in the generational transition of leadership.
“I see the potential for millennials to move into CEO roles,” Gesaman said. “A lot of older millennials have or should be getting that experience.”
Gesaman said when millennials consider careers in the nonprofit sector, they often look for opportunities to make an immediate social impact.
“Nonprofits need to help ensure that millennials are seeing the impact they are having,” he said. “Sometimes when they work for a nonprofit, they may not see the impact they’re having and what their role is in the organization. We need to help them see how they fit into the big picture and highlight in a (meaningful way) how they’re making a difference and making it clear how they fit into the mission of the organization.”
Millennials also are more vocal about asking for flexible work schedules because they have another job or want to participate in other professions. As such, about 80 percent of the nonprofits represented in the MNA report offer flexible hours as a recruitment tool. Nonprofit organizations use maternity leave policies and offer telecommuting as incentives to attract talent, Gesaman said, noting it is up to the organization to define that flexibility.
Despite these incentives, an estimated 2,000 nonprofit employees in Michigan voluntarily left their jobs in 2016. This accounted for 60 percent of all turnover at Michigan nonprofits. That glaring trend serves as an opportunity for nonprofits to work on employee retention and engagement, Gesaman said.
To that end, the MNA created a program two years ago called “Leadership with Purpose” that is designed to help individuals find their ideal career role within a nonprofit. The MNA accepted 50 of the 200 people who applied to participate in the program, which took place over three full days during a three-month timeframe in Detroit, Kalamazoo and Lansing, according to Gesaman.
“We had all different ages, generations, races and sexual orientations represented,” he said. “Participants learned what they are good at and what they’re passionate about and how they can plug that into working for a nonprofit.
“We had community leaders come in and speak to see where their passion could be applied. Just because you want to have impact, it doesn’t mean you know what your specific role might be.”
For example, nonprofits rely heavily on fund development professionals to solicit donations, and people in those positions should be compensated fairly for the value they bring to their organizations, Gesaman said. But he notes that boards of directors need to make decisions regarding compensation with the organization’s mission in mind.
“There is a belief that nonprofit professionals should be donating their time and they shouldn’t be compensated for it,” Gesaman said. “My suggestion is always, yes, we should be cognizant of paying appropriate salaries and being good stewards, but we should also be looking at the return on investment. If you feed more people or serve more youth, you need to look at that impact when determining compensation.”