Compensation - Charity and Not for Profit

Steve Rennie’s Canadian Press article on the compensation levels of charity and not-for-profit sector leaders made the front page of The Halifax Chronicle Herald on Monday, July 11th – ‘Charity work you can bank on’. Now, I am as conservative as the next Nova Scotian about the ways in which the public’s money should and shouldn’t be used but this article got me thinking about how society views this sector and those that choose to work in it.

I will declare up front that I do a lot of work with leaders and governors in the charities and not-for-profit sector. That might mean that I have a biased perspective but it also means I have more first-hand experience than most about the leadership challenges in these sectors.

So what have I seen? First, leaders in the charities and not-for-profit sectors work every bit as hard as those in the private sector. And because these sectors attract people who are passionate about their cause, they often work harder and become more personally invested in their contribution. Next, these leaders often work with tighter constraints and with greater threats to their sustainability than their private sector colleagues because they don’t have access to investment capital to take risks or to build new revenue streams. Most charities or not-for-profit organizations live day-to-day with an ever present threat that a campaign may under-deliver, a funding grant may be cut or an unbalanced news article may shift public perception against them or their cause. Third, most leaders in charities and not-for-profit organizations are acutely aware of, and sensitive to, the high standards to which they are being held by donors and the public at large and manage their organizations accordingly. Finally, my experience has been that leadership roles in charities and not-for-profit organizations, on average, continue to pay less than leadership roles in other sectors.

In days gone by, when there was less competition for donor dollars, when two income families were a choice rather than a necessity, work in charities and not-for-profit sectors was done largely by volunteers or as discretionary-income work. This has created a bit of a false economy – and some misconceptions – about the value of work in these sectors. Today, increased competition in these sectors and increased expectations on the part of donors make leadership roles in charities and the not-for-profit organizations as challenging as any private sector role. And while the satisfaction that comes from having an impact on some very important causes is valuable, we have moved past the day when the actual compensation for these roles can be significantly discounted in lieu of the reward of making a difference.

While the absolute compensation levels for leaders in charities and not-for-profit organizations may have increased, trying to push compensation levels back to days gone by is like sweeping the tide. The challenge instead is to shift our perspectives about the value and importance of the work that charities and not-for-profit leaders – and their teams – are doing and the value of the impact they are making.

Anna Stuart
Anna Stuart , MBA, FCPA, FCMA, FCMC
Senior Associate
Anna is a Managing Partner with KBRS. She leads the firm's academic and public sector executive search assignments and leadership solutions practices. Anna’s consultative style and pragmatic approach has delivered exceptional results to a range of organizations and leaders across the region.