In the nonprofit sector, the conversation around overhead costs often ignites debate. However, it’s crucial to reframe the narrative. The majority of nonprofit overhead costs are not excessive expenses; they are primarily invested in human resources — the dedicated people who make our work possible.
A recent study revealed that more than 1 in 5 nonprofit workers (22%) do not earn enough to live and afford basic necessities, such as food, transportation, health care and child care. This is a stark reminder of the financial struggles facing many nonprofit professionals.
Advocating for a Cultural Shift
For nonprofits to succeed in our missions, we must prioritize paying livable wages. When nonprofits skimp on salaries, it’s not just our people who suffer; the entire community feels the ripple effects. Underpaid staff often face stress, burnout and high turnover, rendering nonprofits less effective in delivering their critical services.
Investing in fair compensation is not a luxury; it’s a necessity that strengthens nonprofits’ capacity to serve. By fostering a healthy workforce, we can enhance employee morale, attract talented individuals, and build sustainable organizational structures.
Two Things You Can Do Now
- Initiate and lead conversations with your nonprofit board and leadership team to adopt transparent salary scales that reflect the true value of employees’ work and the local cost of living. Research and benchmark salaries within your region every few years. Create a framework for annual reviews to adjust compensation in line with inflation and market standards. This helps shift the culture within nonprofits to view compensation as an investment in staff well-being and organizational success, rather than as an unnecessary overhead cost.
- Develop guidelines for funders, philanthropists and grant makers that recommend allocating funds for competitive, livable wages within grants. Advocate for funders to prioritize salary support as part of their funding criteria, ensuring that organizations can cover fair wages without compromising service delivery. This ensures that nonprofits are better equipped to allocate necessary resources to staff compensation, leading to greater retention, morale and effectiveness in mission delivery.
Now is the time to advocate for a cultural shift in how overhead costs are perceived. When we support fair wages for nonprofit workers, we’re not just funding salaries — we’re fueling the passion and commitment that drive social change. Together, let’s ensure every nonprofit employee has the means to thrive while making the world a better place.
