Why does a Nonprofit Salary Survey Matter?

Last week, we launched the first Central Indiana Nonprofit Salary Survey. We are encouraging all 501c3 nonprofits from Marion and surrounding counties to go to www.CINSS.org and take about 15 minutes to complete the short survey of benefits and management level salaries (Excluding hospitals, universities, and schools this cycle).

We have been surprised by the wide range of feedback we have received. Many people are as excited as we are about this project while others see it as a lot of work to get enough organizations participating. Still others aren’t familiar with why a salary survey would be of value or interest.

One reason salary and benefits surveys may not be of common knowledge in the nonprofit sector is because more than 90% of nonprofits are not large enough to have staff dedicated to the Human Resources function. HR staff members are commonly the people who research salary information, buy salary data from national surveys, and help in developing compensation and benefits frameworks that make an organization competitive for talent.

While few nonprofits can offer truly “generous” compensation packages, it is critical to remain competitive in the marketplace in order to keep strong leaders and attract more strong leaders. Survey data like this helps the organization walk the line between competitive compensation for good staff and appropriate stewardship of donor funds.

For those organizations that do not have HR professionals, establishing compensation levels is often informal and viewed as an occasional “project” of a staff or board leader or committee. Sadly, many nonprofits get into a routine of paying what fits in their budgets and avoids a staff exodus. We hope easier access to this information will allow more organizations to set goals of working toward raising their overall compensation levels.

I would be the first to tell you that you have to look really hard to find a nonprofit leader who is overpaid, but the IRS has taken a few abusive situations and put rules in place that require every nonprofit board to objectively justify the compensation package they provide to top leaders. A survey like this will go a long way toward meeting that requirement.

We are pleased that more than 60 nonprofit organizations have already responded to the on-line survey at www.CINSS.org since it opened last Tuesday. We encourage you not to wait until the deadline of July 8 to complete it for your organization. We have set a goal of 200 nonprofits to provide worthwhile data for the eight nonprofit areas we have identified.

As a reminder, we will be coordinating our data with the recent survey from the United Way of Central Indiana to publish combined results at the end of the summer or early fall.

Bryan