Can Salaries Be Too High In The Non-Profit Sector?

The general public; fundraisers, tax payers and donating individuals have been asking a certain question for a while now. Can salaries be too high in the non-profit sector? International development and humanitarian workers receive varied wages depending on the source of funding and the type of work being done. Some receive atrocious salaries for the long hours and risky conditions, others are quite well paid to sit in nice offices, make trips to the field and earn nice tidy per diem rates. Foundations which depend on fundraisers and individuals tend to pay more conservatively while bilaterals and multi-laterals pay higher salaries. Summarily though, the bigger the nonprofit is, the better its salary usually. Charities like Oxfam, Restless Development, VSO, Merlin, Save the Children, War Child, Water Aid will pay anything between $29,000-$35,000 to Project Coordinators living and working in developing countries while executives at the HQ or Country Directors at the field level can earn up to $80,000 depending on the skills set, qualifications and experience.

UN Meeting
Photo source: demotix.com

For private contractors such as JSI, RTI, FHI 360, Chemonics, implementing projects for bilateral agencies such as the USAID, EU and DFID, project advisors may earn anything from $40,000-$60,000 while a head of project may earn as much as $100,000 and above. Indeed one finds that executives working for private companies implementing international development through bilateral agency funding may earn bonuses equivalent of one month’s salary or more per year. According to the Chronicle of Philanthropy, In 2010, one-third of nonprofits surveyed provided bonuses to their well-paid executives, and the median bonus was over $50,000. More than 20 nonprofit groups paid top executives more than $1 million a year in 2010 and 2011..

The multilateral agencies such as the UN, World bank and the corporate social responsibility branches of for profits (chiefly oil companies) are by far some of the highest paying agencies. Mid-level professionals working for these agencies would expect to earn as much or more than a university professor or a specialist in medicine in government regulated health services. The benefits tend to be great as well and may include health insurance and education for dependents amongst others. The range of salaries in nonprofit really depends on size of the organisation, funding stream, and how large its income is.

Brainstorming session
Photo source: apps4africa

I read an interesting blog post recently where the question of how these organisations got their funding and what got to the frontline eventually was asked, and it stayed with me. Development, humanitarian assistance, charity work have all gone beyond ladling soup at the homeless shelter, or painting the walls of an oprhanage. These are great acts of kindness, and are still needed in the world today. However, the issues of disease, response to natural disasters, poverty, conflict, economic development and systems strengthening, democracy and governance are much more complicated. These need to be tackled through consistent planning and strategy before implementation. The work has become increasingly technical in a bid to meet the MDGs and whatever indicators the donor has set in conjunction with the host country’s government.

Angelina Jolie in DRC with William Hague
Photo source: cntv.cn

As Dan Pallotta; activist and fundraiser argues in his Ted talk video, is frugality equal to morality? These charities set big goals and work very hard at meeting those accomplishments, should they be rewarded for it? Not to take away from the awareness that they have raised about the issues, but sustainable development cannot be achieved by a 3 day trip to the Congo by Angelina Jolie or Ben Affleck, neither will a cure for cancer be found because a well meaning teenager stands in the drizzle in Edinburgh asking for change in a cancer research rain coat. Of course it all helps.

But eventually, we have to ask questions about the 55 yr old guy with a PhD in public health travelling from one health facility to another in the DRC to ensure that the malaria Diagnosis specialists in those facilities are using the rapid diagnostic testing appropriately, or that variations between microscopy and RDTs are recorded, all towards the prevention and control of malaria. One should ask about the researchers spending hours and hours working on potential cure for cancer, practically putting their lives on hold. What about those workers who dedicate their careers towards the management of HIV/AIDS, or finding a vaccine, or dealing with lead poisoning in rural communities where mining activities are not regulated? It’s really quite complex. Shouldn’t governments be taking more responsibility with regulations and integrity issues (more on this another post).

How should the nonprofit sector determine its salaries and benefits? What sort of people do we want running these foundations and multimillion dollar nonprofits organizations? Should nonprofits be discouraged from becoming so large?
But at the end of the day, as human beings, is it possible to think about these salaries though, and not wonder if anybody deserves to live so lavishly off the generosity of others? Should anyone working in aid and development whine so much (as I have seen daily in this sector) about perceived low salaries, or comparatively low salaries (when compared to organization A or B). Will the notion of nonprofit and its complexities be ever understood as non-for-conventional-profit? How much work and impact have these nonprofits achieved? Has charity been used as a tax evasion tactic by donors and nonprofit workers alike?

I personally, am quite ambivalent about so many of these issues. What are you thoughts? On giving to nonprofits or working in the sector?

11 thoughts on “Can Salaries Be Too High In The Non-Profit Sector?”

  1. Hi Anne, thanks for the link.

    I have no real world experience of this area, so I can only really go by my completely uneducated feelings on it.

    Personally I would not donate anything to a charity that paid people hundreds of thousands of Pounds per year (or dollars, or indeed any high value currency), I can only assume that the non profit moniker doesn’t include the salary.

    At the same time, obviously a charity needs to have workers, and they need to be paid a competitive salary to non charity workers, it’s all well and good caring for others, but if charities only paid say 20k and everyone else paid 35, why would you work for the one paying 20, who still need to live yourself.

    The only way I can think way around it is either have a salary limit for the entire organisation or lose the non-profit moniker although I would still not donate willingly to a charity where top people earn silly money, and because I cannot prove that, or have the will to investigate it I do not donate to charity on a money level. Sure I take items to a charity store, but no X amount of money per month from a direct debit.

    I would rather give regular money to two or three homeless people than £10 a month to A N OTHER charity just to fund a top execs mortgage of his sea view mansion.

    1. I would probably split the 10 pounds, give 5 to the homeless person, and give another 5 to a charity working towards dealing with the reason for homelessness. I agree that people should be paid a competitive salary. I struggle with nonprofit that becomes so large that it feels the need to pay outrageous bonuses to its executives though. The truth is that once corporations become that big and operations become complex, there is need to have extremely qualified and experienced people at the helm of affairs. Will there be very high attrition rate if they are not well paid? Definitely. Will it disrupt progress made and implementation of projects? Yes. I think maybe the solution would be to have some form of regulation in place, where salaries in the sector are placed within a certain bandwidth/limit.

      1. The term non-profit is obviously a loose term and one that is misleading, to me non profit means more money would go to the people that they are trying to help. whereas if they are paying millions in salary and bonuses and the salary is part of the costs of it, then it would fall under non profit.

  2. Have experience of working with no salary as overseas volunteer living with the poor up to well paid head of delegation of an international relief and development agency and subsequently as consultant to latter.
    Always considered that the communications and other gaps between the HQ (desk) staff and those in the field was adversely affected by the disparity in wages and conditions*.
    The disparity is ever increasing as HQ staff are paid more and more as organisations get bigger with increased income (increased aid and shift to sub-contracted NGOs) and as status is measured by HQ wages rather than success in the field.
    Development and relief NGOs and agencies waste time and money in unproductive ‘networking’ meetings with internals and externals and expenditure on duplicated activity (each organisation has own needs assessment, own specialist advisers, own logistics /security, own in-country administrations, etc) and generally in maintaining secrecy in their work which could save repeat mistakes.
    Salaries from my experience bear little relevance to responsibility or performance and as you say; vary from organisation to organisation but also within the same organisation because of lack of transparency on all things including salaries and expenses.

    * Wages and conditions are most often kept secret in most organisations so the disparity could be real or imagined.

    1. Am definitely with you on the waste from all the meetings and networking. A huge volume of resources go to meeting expenses and you would think that with all the meetings, there would be better leveraging on existing results and frameworks. I find that development and relief NGOs are all guilty of the same thing, like you mention, each organisation wants to carry out its own baseline assessment, security assessment, or needs assessment. There is no leveraging on existing resources, and the same interventions tend to be recycled in same communities. You see abandoned or dilapidated development projects, and when these agencies move into the community, instead of rehabilitating the existing one, they build new ones!

      These days though, some bilateral agencies are beginning to speak to one another. So for example if UkAid is already implementing a HIV/AIDS prevention and treatment program in the Northern part of Zambia for example, chances are that if the USAID wanted to implement the same type of program in Zambia, it would go to the South. They mandate their subcontractors to speak to one another.

      As for the secrecy in wages and conditions, it is truly hush hush, but you know how these things get out anyway. Apparently HQ staff get the better deal; am not so sure as I have always worked in the field. Salaries are determined by qualifications and experience in some sectors particularly public health. But as you say, sometimes they bear little relevance to responsibility or performance. I find that the more people move from job to job, the higher their pay becomes really.

  3. I don’t have any experience with this other than from a distance through my readings, so I don’t have a worthy response. But I enjoyed reading your take on things. Your post brought to my attention something I hadn’t really thought of before.

    1. Thanks for reading Carrie, your response is a worthy one to me! It’s one post I always wanted to write since I read Steve’s post on giving. Wasn’t really sure how to broach it, but am glad I tackled it and got it out of the way.

  4. Such an in-depth post, well written and straight to the point. I’d always looked at charity organisations afar off, but I’ve heard about directors living large… It’s a complex sector. If I’m very rich, I guess I’ll just dive straight into the line of fire, where the trouble can be seen and dealt with! Great post Anne! 🙂

    1. Yep, it’s a complex sector definitely. More involvement is a good idea, if people can afford to follow their money and see how it travels and what it does. That’s definitely fresh and one seldom seen. Thanks Seyi

  5. non profit for whom? tax break for the doner -excessive pay checks for the executives – non profit should mean more help and money to be used for the needed for whom the money is raised – i think non profit is just another big business venture of smart people who rip off the people. I have never made more than 50,000 a year, but I note that these non profit ceos’ etc make in the hundreds of thousands a year plus bonuses plus expenses – WHAT? THESE PEOPLE MAKE MORE THAN THOSE WHO DONATE

    1. It’s much too complicated to be honest. It ‘s like the UN, those guys earn hefty salaries too, and they are supposed to fix the world! Perhaps that terminology needs to be changed, or the entire modus operandi should be changed as well. Do we really need such huge companies doing good work in different countries? Do they become too big and lose their essence? Thanks Stanley for stopping by

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