Corporate at the Top, Nonprofit at the Bottom

This recent article in the Jewish Telegraphic Agency, titled When did $650,000 become a reasonable Jewish nonprofit salary? highlights a growing disparity in the Jewish nonprofit world: executive salaries that can reach $650,000 and much, much more, in a communal ecosystem where many organizations operate on annual budgets smaller than that. It raises an important question about how we value nonprofit leadership, and an equally important question about who benefits from that valuation.

Women lead an enormous share of the nonprofit sector, yet women-led organizations are often smaller, with fewer resources, and women executives continue to earn less than their male counterparts. At the same time, some of the largest organizations in our community are paying executive salaries that would constitute an entire operating budget for many small organizations.

There is also a gendered dimension to how we value the work itself. So many nonprofit jobs, particularly those with words like “engagement,” “programming,” “community,” or “relationships” in the title depend on skills that are too easily dismissed as simply being warm, friendly or good with people. And because women disproportionately hold many of these roles, I wonder how much that perception contributes to what organizations are willing to pay.

But building community is a skill. Cultivating a donor is a skill. Reading a room, navigating competing personalities, designing a program that people actually want to attend, turning a first-time participant into a long-term member, managing volunteers, resolving conflict and maintaining relationships across years are skills. They require judgment, strategy, emotional intelligence, institutional knowledge and experience. We need to stop treating these skills as personality traits and start recognizing them as professional expertise. In fact, the people who are best at this work often make it look easy. That shouldn’t make the work less valuable, it should make us recognize the expertise involved.

I believe deeply that nonprofit professionals should be paid well. I have spent most of my professional life in this sector. “Mission-driven” should never be code for underpaid. Talented leaders deserve competitive compensation, and we should stop expecting people to sacrifice their own financial security simply because they chose careers of service. 

I once worked alongside senior leaders who earned more in outside income, speaking fees, honoraria, and teaching, than many of us earned in an entire year. That disparity is even more striking because many other nonprofits don’t permit their executives to keep that kind of additional income. Honoraria and stipends earned because of your role are expected to be paid directly to the organization. So the gap isn’t always just between salaries. It can also be about who has access to opportunities to earn beyond their salary, and permitted to benefit from them.

There is a larger contradiction here, too. Too often, nonprofits want to operate like corporations, but only when being corporate benefits the organization, and rarely when it benefits the employee, especially the more junior employee. We invoke the corporate world when setting executive compensation: This is what we have to pay to attract talent. We invoke it when expecting long hours, constant availability, extensive travel and measurable results.

But somehow the comparison disappears when we talk about bonuses, meaningful raises, expense accounts, professional development, adequate staffing or opportunities to build wealth. You can’t justify compensation at the top by pointing to the private sector while asking everyone else to accept less because they are doing mission-driven work.

As a seasoned Jewish professional, I have counseled dozens of people about negotiating starting salaries and asking for raises. And the advice I find myself giving most often is also the advice I wish I didn’t have to give: If you want to make significantly more money, you may have to leave. Sometimes that means changing jobs. Sometimes it means getting an offer from another organization with a better salary and benefits package and giving your current employer the opportunity to match it. Staying loyal to the same organization, particularly as a junior employee, can mean getting locked into a salary range that never catches up with your growing experience or your market value. An organization may suddenly discover that it can pay considerably more when confronted with the prospect of losing you. But without that outside offer, what leverage do you have? You can’t leverage yourself against yourself.

And there is something deeply wrong with a system that rewards people financially for leaving while asking them to demonstrate their commitment by staying. If we’re going to import corporate compensation practices into the nonprofit world, we should be willing to have the conversation about which corporate practices we import, and for whom. 

And then there is what happens at the other end of the spectrum. I once had a donor tell me how much they appreciated that the organization where I worked was so “lean.” I appreciated the compliment. But I also wanted to tell them what lean sometimes looked like.

It meant that when I took a donor to coffee or breakfast, I often paid for it out of my own pocket. It meant using my own phone, my own laptop and my own resources because there wasn’t a budget to pay for or subsidize their use. It meant taking the train at terrible hours because the cheapest ticket was the ticket the organization could afford, and more nights than I can count couch surfing because there wasn’t money for a hotel. And it meant thinking twice before submitting even perfectly legitimate expenses because I knew exactly how little money there was to go around.

Lean isn’t always attractive. Sometimes “lean” just means someone else is absorbing the cost.

Which is why there is something particularly distasteful about highly compensated nonprofit executives, sometimes with generous expense accounts, substantial travel budgets, drivers and other perks, talking about how their organizations are “like a family” while junior staff members struggle to pay rent, afford childcare or build any meaningful financial security. Families don’t ask the people with the least to make the greatest sacrifices.

This isn’t only about whether $650,000 is too much. And it shouldn’t become an argument that nonprofit executives ought to be paid less simply because they work for nonprofits. It is about proportionality. It is about equity. And it is about what our compensation structures say about whose work we value. If there is money for extraordinary executive compensation, there should be money for living wages. There should be money for professional development, parental leave, and decent benefits, for the people delivering the programs, raising the money, answering the phones and keeping our institutions running.

And boards should be asking not only, “What do we need to pay to attract this CEO?” but also: What is the appropriate CEO pay ratio, distance between the person at the top of this organization and the person at the bottom, and are we comfortable with what that distance says about us?

Our budgets are moral documents. Our payrolls are, too.