The Problem with Paying Nonprofit Staff Too Little and Why We Need to Pay Them More

It's time to be more strategic when it comes to compensation.

von Katherine Spinney, January 2, 2018
Problems with Paying Our Nonprofit Staff Too Little

In the nonprofit world, fundraising is a year-round endeavor that touches all aspects of the work. Money is discussed frequently and openly and staff receive the message early and often that fiscal responsibility is essential. Organizations do all they can to keep the doors open through a combination of fundraising and reducing costs. Far too often, the costs they reduce are the salaries, particularly those of the frontline staff who tend to do the most arduous and emotionally-draining work while getting paid the least.

Paying our nonprofit staff below market rate is problematic in a number of ways and, I argue, one of the main reasons nonprofits experience such detrimental turnover rates and why executive directors become stretched even thinner than they already are. Budgets are tight and boards want financial accountability (as they should) so we set our salary ranges as low as we possibly can. This of course limits who we can hire so, quite frankly, we are left taking what we can get. Sometimes it’s someone amazing but many times it’s simply not. When it’s someone amazing, lack of compensation, support and growth opportunity frequently drive her away either to another nonprofit or, in roughly half the cases, out of the sector altogether. When it is someone less than amazing, we expend costly time and resources to properly train and supervise him to fulfill his role as intended. When he cannot, and he either leaves or is let go, the costly process of rehiring begins once again.

It is my argument here and to anyone who will listen, that we need to be more strategic and future-focused when it comes to our staff’s compensation. It is time we recognize that investing in higher quality staff is the best investment our organizations can make. The work will improve, the turnover will decline and the executive staff will have the opportunity to focus their energy on things other than performance plans and rehiring (yet again). On the other hand, if we continue to invest in our teams at the lowest possible cost, the challenges we face with staffing will continue.

In case it needs to be disclaimed, nonprofits come in all shapes and sizes and function differently from organization to organization. It is both unfair and foolish to speak of them as a uniform conglomerate. This post, like my others, comes from my personal experiences combined with the research and conventional wisdom in the field. I am attempting to speak to commonalities that almost certainly don’t affect all nonprofits but equally as certainly affect far too many of them.

1. You get what you pay for

This is not a slight on those who are called to the nonprofit world and want to do their part. But as is the case in most other areas of life, you get what you pay for. Offering low salaries will almost never get you the top candidates, so you put yourself in a position to accept the best person who will accept your low offer. This often means someone who does not have many other options and/or is just starting out in the field and will not bring a lot of experience to the position. Or maybe you will get lucky and grab a top performer, but in these rare cases, that top performer is not likely to stick around for long if the salary structure does not improve down the line.


You will spend more time and energy training and managing less qualified candidates. If they are not strong workers or they leave for more money (or for any other reason), you must go through the hiring and training process all over again. Talk about expense. According to the 2016 Nonprofit Employment Practices Survey, the number one staffing challenge for nonprofits has been the ability to offer a competitive wage. The second most popular challenge was finding qualified staff. These are not unrelated.

2. The revolving door

Turnover is a challenge for all types of organizations but none more so than the nonprofit community. This is due to several factors including long hours, non-traditional schedules, burnout and of course low salaries. Nearly 1 in 3 staff leaves within the first year of being hired and 22% of this turnover happens in the first 6 weeks. In the nonprofit world, these numbers are believed to be even higher. And the highest among the nonprofit group? Frontline staff- the very lifeblood of our organizations. Yet despite these high numbers, 84% of nonprofits do not have a retention strategy in place.


There have been many attempts to quantify the financial cost of staff turnover and while estimates vary, everyone agrees the cost is high- some estimate as high as twice that employee’s annual salary.  Additionally, because the basis of our work is relationship building, there is great cost to the trust and relationships we are attempting to build with our clients. How can we expect them to trust us if we are constantly introducing them to yet another staff member, asking them to start all over again? That is certainly not the type of service I would want to receive.  

3. The guilt and manipulation

Nonprofits frequently send the message, directly or indirectly, that staff need to sacrifice for the good of the client. From skipping lunch to working long hours to the low salaries, we are told it is all for the greater good. On top of this, staff get attached to their clients and feel guilty leaving them. Nonprofit leaders know this and count on this. I was told by a former boss that I wouldn’t receive a raise because the organization wanted people who weren’t in it for the money. There are not enough pages in the world for me to say all I want to say about this, but for the sake of being concise, the message was loud and clear- if you really care about your work, the money shouldn’t matter. In one of the most expensive cities in the country I might add. Puh-leez.


 In the short term, this strategy may work, but eventually, staff will seek something more and leave. Those who stay will grow resentful and the work will suffer as a result. There is nothing good that comes out of this. Absolutely nothing. It is damaging to staff, clients and to the organization as a whole. People rise to the occasion when they are supported, energized and bought in to the work. Guilt and manipulation will never inspire.

4. Taking staff for granted

 It may seem natural in the nonprofit world to put our clients above all else, but the most successful organizations recognize that staff must come first. When staff is supported, trained and bought in, the natural result is a commitment to serving clients the best way they can. When staff is neglected, burnt out and underpaid, there is almost no way they can do so. Unfortunately, many nonprofits don’t operate this way and instead focus all their energies and efforts on the clients at the expense of staff. Further, because the message is that this work is a calling and that self-sacrifice is the norm, many nonprofit leaders do not invest the necessary time and energy into effectively thanking and rewarding their staff. You don’t need me to tell you what happens with unappreciated staff. But I will anyway.


 Burnt out staff who feel unsupported will never perform to their true potential.  Instead, their work will suffer which naturally has a direct effect on clients. Further, disgruntled staff are contagious and can infect the rest of the team. Others will simply leave, bringing us back once again to that pesky turnover. It is vital that we recognize the work and sacrifice our staff has made to work in the nonprofit world. They need to know their work is important, valued and appreciated. If not, why should we expect them to stay?

5. Pushing top talent into other fields

Direct service work is some of the most challenging work out there, and it takes time and dedication to do it well. Building relationships with clients takes time, skill and expertise. Success requires love for the work, and the work most certainly draws those with a passion to contribute and give back. We tell them that the reward is the work itself, but as rewarding as that can be, it cannot be enough. When you add in long hours, exhaustion, the emotional toll and low pay, over time, many decide that the reward just isn’t enough.


 Half of those who leave their nonprofit job will leave the nonprofit sector altogether taking all their experience, knowledge and wisdom with them. I’m not sure how we can quantify this but I do know that the cost is too high. Much, much too high. This causes nonprofits to continue hiring inexperienced staff at lower cost, a strategy that does a true injustice to the work and delegitimizes the field. Despite this, over half of nonprofits say they have no intentions of changing the way they recruit and hire staff.

Nonprofit work at its core is a noble and powerful endeavor but far too often the true potential of its impact falls far too short. In order to effectively serve clients which is the ultimate goal of the work we do, we MUST change the way we approach hiring. It is time to start thinking more long-term by investing in top talent. When service improves and retention declines, the money will move from the reactive column to the proactive column. Many nonprofits have convinced themselves that turnover is inevitable and putting out fires is the norm. This is simply untrue. We need to allow ourselves the time and resources to get ahead of the issue. By building budgets that allow for higher compensation, we can begin to reap the benefits of a qualified, experienced staff who sticks around. I know it will not be easy- that there are boards to convince and funders to sway- but in the end if we truly want to serve our clients effectively, we must be willing to do so with the very best we have to offer.  

About the Author

Katherine Spinney has spent her entire career working to improve the lives of others. Educated at the University of Virginia and the University of North Carolina at Chapel Hill, Katherine has earned Master's degrees in both teaching and social work. She has worked in diverse environments from urban to rural to suburban as well as four years living and working overseas. With extensive experience in the public and non-profit sectors, Katherine has been in management for nearly a decade. She has combined her experience, education and passion to create Katherine Spinney Coaching LLC in order to support others on their own professional journeys.

This article was originally posted on Katherine Spinney Coaching. You can read more articles by Katherine Spinney on her blog, follow her on Twitter here or get in touch directly here. Originally published November 7, 2017