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Competitive Compensation

May 5, 2010

In a recent post, we allowed that the “nonprofit mentality”, while based in admirable altruistic beliefs, could be exaggerated to the point of eclipsing sound economic practices.

A common by-product of this mentality is the belief that nonprofit employees should be compensated less than their profit-driven peers. We find this an absurd and all-too-often accepted concept among the people we meet.

Nonprofits serve society in ways that other entities either have not or cannot, and if they manage to do so successfully over time, then society is in-effect demonstrating its value for the services they offer by continuing to support them through individual, business and government funding.

Not only does society value the services of successful nonprofits, it insists that these organizations be run as efficiently and effectively as possible. Otherwise it eventually ceases to fund them, opting for alternative or no solutions. In order to compete for finite funding, all businesses must compete at the same level for the best talent available.

Not all prospective employees view compensation the same. For some, it includes personal satisfaction, helping others or proudly displaying their “nonprofit badge”; while for others it’s money, security and benefits. Regardless, care should be taken to align total compensation packages with the unique values of the best talent that society has to offer. And yes, that may even mean paying a competitive salary.

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