by Rob Meiksins, CEO
As we all know, working for a nonprofit has many rewards, but it also has many challenges—one of which is low compensation. As someone in one of NPC’s recent listening sessions said, “Mission doesn’t pay the bills.” And in most cases, it doesn’t offer retirement savings. To help with that, the Nonprofit Center of Milwaukee is partnering with Principal Financial Group to offer employees of any nonprofit organization in Milwaukee, Wisconsin, a deferred compensation plan, no matter how big or small the organization is. You’ll find more information below.
Why We’re Taking Action on Deferred Compensation
Human resources is on the minds of many people in and around the nonprofit sector in Milwaukee. We’ve read it in surveys we’ve conducted and heard it in conversations with executives and HR directors and listening sessions.
The Nonprofit Times recently reported that only 50% of nonprofits offer a retirement package of any kind. This problem affects a large number of local residents: A report from the Monthly Labor Review suggests that 12.2% of jobs in Wisconsin are attributed to nonprofit organizations (New York and Rhode Island are tied for the highest percentage, at 18.1%).
HR Beyond Retirement Plans
When it comes to salary, there’s widespread acknowledgement that nonprofit staff are underpaid; Vu Le of the blog Nonprofit With Balls puts it well. I haven't been able to find any data quantifying the average salary of all nonprofit employees in Milwaukee, but the NPC salary survey of agencies in the Milwaukee area, conducted by MRA, suggests an average of $110,300 for chief executives of nonprofits (on par with the national average). CEOs (presumably at for-profit companies), on the other hand, are earning a median salary of $694,105, according to Salaries.com.
$110,300 may not seem bad for nonprofit executives, however, at organizations with an annual budget of less than $500,000—a significant portion of the sector—the average salary drops to about $60,000, according to the national average.
Workers for youth programs are a good example of how low salaries can go: these workers often have to work split shifts (morning and evening in the same day), and our salary survey shows a weighted average of $11.50 per hour, which is well below the $15 per hour that is increasingly cited as a basic level to escape poverty. HR staff tell us these conditions make it hard to attract these workers, and retention is also tough, as training programs don’t always prepare these staff for what they're walking into.
The Nonprofit Times report says nonprofits nationwide are doing a little better in the area of health insurance, with 85% of nonprofits offering coverage of some kind to our employees. We are also pretty good at giving them paid time off for holidays (88%), vacations (71%), and offering some kind of medical coverage (85%). It is an odd statistic that we are more likely to offer paid bereavement time (70%) than paid sick time (66%) – we may have to work on that.
Retirement Plans as a Competitive Advantage
Jobs in the nonprofit sector have grown faster than any other sector, even through the recent Great Recession. We need the brightest and the best in our sector to help people with their health, education, recreation, and all the other things the community relies on our sector for. We need to talk about how to pay people to do this work: nonprofits need to budget for higher wages and better benefits, and our funding sources (philanthropies and government agencies) need to realize that it costs money to attract and retain the people we need.
Nonprofits are in a “physician, heal thyself” kind of moment. We keep talking about the need to pay people a livable wage, raising the quality of life in our community, and making the world a better place. And yet we keep offering our workers low wages and weak retirement plans. Of course, a lot of this comes from the economic realities we have to face on a daily basis. It is hard to pay a worker money you don’t have.
Getting Deferred Compensation for Your Milwaukee Nonprofit
As I wrote above, the Nonprofit Center of Milwaukee is partnering with Principal Financial Group to offer a Milwaukee, Wisconsin, deferred compensation plan for employees of all nonprofit organizations, no matter how big or small. This is a low-cost program with a significantly reduced annual fee, no per-enrollee costs, educational opportunities so employees can learn how to start thinking about their retirement, and more. Some nonprofits may be eligible for a program that would cover the cost of that annual fee for the first year.
If you’re interested in signing up for a deferred compensation plan for your nonprofit, please come to an information session on April 5 at 1 pm at our offices; you can learn more and register here.