Q: We are in the midst of budgeting and we are wondering what the average percentage increase is that employees are seeing in their salaries this year – if any. We are most interested in the statistics for smaller organizations and would like a sense of what is happening across the board. Any insights would be appreciated. I’m sure you can understand what a hot button this is for people in this environment.
A: This is a tall order, as you may well imagine. The numbers will vary depending on the organization’s mission – human services organizations tend to always lag behind – where in the country the organization is based, the position being surveyed and even the entity that conducts the study – its biases, sample size and methodology. Sadly, according to the Association of Fundraising Professionals’ (AFP) latest Compensation and Benefits Study(requires membership to access), the numbers still also depend on the employee’s gender. In the nine years AFP has conducted its study, no increases have succeeded in closing a roughly $20,000 salary gap between male and female fund raising professionals. Men continue to make more money, whether that is due to higher increases, the fact that they start out at a higher base salary or some combination of these.
In April of 2009 the reported salary picture was bleak. According to a study by the Nonprofit Finance Fundreleased at that time, 41% of nonprofit organizations had reduced or were considering reducing staff or salaries and 22% had reduced or were considering reducing staff hours. As many as 43% of the nonprofits surveyed were dipping into their reserves to stay afloat. I don’t think raises were even a consideration in most organizations.
However, by April of 2010, things appear to have changed. The AFP study referenced above found that the average salaries of its U.S.-based survey participants increased by 7.4%. One could argue that since most AFP survey participants are fund raisers, this is merely a result of organizations recognizing that they need highly-qualified help in order to bring in extra dollars during a difficult period. However, the program managers that responded still saw a mean increase of 4.8% and other staff positions saw a mean increase of 4.5%. It is perhaps helpful to note that 47.9% of the AFP respondents work in organizations with only 1 – 3 staff and 73.9% work in organizations with fewer than 10 staff, qualifying them as small and allowing you to use the numbers here with a fair degree of confidence. The annual salary surveys conducted by Professionals for NonProfits (PNP) in New York City, New Jersey and Washington, D.C. also showed that salaries increased or at least stayed the same. Granted, fund raisers and finance people enjoyed the greatest increases – 10% and 7% respectively. Charity Navigator found in its 5th Annual CEO Compensation Study that top administrators saw their salaries rise an average of 6.1% during this past year, though only by 2.5% in organizations with budgets of less than $3.5 million and by 4.5% in organizations with budgets of between $3.5 and $13.5 million.
By the end of 2010, the PNP surveys project that, at least in the northeast where the data were gathered, salaries will stay the same in an average of 33% of the organizations. But, they will increase 1% – 2.5% in 22% of the organizations, increase 2% – 6.3% in 20% of the organizations, increase 3.1% – 5% in 11% of the organizations, increase 5.1% – 7 % in 2.3% of the organizations and increase 7.1% or more in 3% of the organizations. Only 3.3% of organizations expect to decrease salaries and 5.3% are undecided. It seems nonprofits understand that they have to pay a fair and decent wage to retain good people if they want those people to stick around, not only to help the organizations get through the bad times, but catapult them forward during the good.
Another positive sign from the PNP study is that a large majority of those organizations responding expect to make new hires in 2010. New hires often come in at a higher salaries and this can stimulate a drive for equity, resulting ultimately in increases for all.
While I can’t provide more specific information on the percentage of increases employees of nonprofits are receiving, given the variables stated above, you may wish to check out some basic salary numbers for different jobs in different cities to determine the percentage of increase required to bring your employees up to a comparable salary. Of course, this presumes you can afford to offer raises. There are many paid sites you can reference for this information. The NonProfit Times produces an annual national study that is one of the most comprehensive, providing salary information for most job titles in different regions of the country and broken down by mission area. However, for a simple look at no cost check out “Nonprofit Compensation: Trends for 2009 and 2010.” You will find numbers generated by PayScale that are updated constantly.