Are You Paid What You're Worth? Nonprofit vs. Forprofit Salaries
Are you paid what you're worth?
It's an interesting question. I think most of us in the nonprofit sector -- especially on the tech side of things -- know that it wouldn't be too hard to walk out the door and find a higher paying job. But does that mean you aren't being paid what you're worth?
Last week, we had an interesting exchange on the NTEN Discuss list about this and other salary related questions. It began with a simple ask (paraphrasing here): "My boss wants to pay a network admin $40k a year. That's not reasonable, is it?" This led to a discussion about what tech staff make in nonprofits vs. for profits.
The answer is, as far as I can surmise, about 25-30% less.
But how real are those number? NTEN Member Jenny Council sent me a link to a TechRepublic Salary report a while back, and I finally got around to doing some numbers comparison with our IT Staffing Survey report on NPTech salaries.
Let's start with the straight up comparison of a few analogous job titles from both reports:
| TechRepublic Survey |
NTEN Staffing Survey | % Difference | |
| CTO | $99,894 | $71,494 | 29% |
| Project Manager |
$90,764 | $50,814 | 44% |
| Network Administrator | $65,567 | $50,127 | 24% |
| Webmaster/Developer | $62,658 | $47,562 | 24% |
| IT Support |
$48,783 | $37,445 | 23% |
At first glance, it seems easy just to say that nonprofits pay a LOT less than their for-profit counterparts -- but there's one important thing to keep in mind: size of the organization/company really impacts how much they pay staff. The bigger you are, the more you generally pay. Check out this excerpt of a graph from our salary survey (the "Very Large" organizations are the lavender bars on the far right).
What we don't have is equivalent data from the TechRepublic survey. I'd be really interested to see if these numbers would line up more closely if we filtered by revenue/budget size of the organization.
But I do expect that a gap of some size would remain.
So I ask you: if you were drafting a job description, would you look at the nonprofit benchmark or the for-profit benchmark? And do you think nonprofits should try to close that pay gap or do we all need to accept working for "a cause" as part of our pay?
Interesting comments. I love the idea of thinking about for profit salaries as out of whack, rather than thinking of nonprofit salaries as out of whack.
There's a lot of discussion about nonprofit leadership right now - and how there might soon be a lack of it. One of the biggest causes cited is low salaries. Nonprofits leaders feel like they can't afford to stay in the sector and retire comfortably.
Outside of one instance, I've always been paid fairly and have managed to save. I can't buy a Jaguar or fancy jewlery, but those don't align with my values anyway. I do have a nice shoe collection though!
So I think your point about a nonprofit webmaster making more than the average NYC household is a great one.
I like what someone else mentioned about "what are others in the office paid". I do think that IT staff, or database managers aren't viewed as being as important as other staff hence one reason why salary may not always be comparable. What I would like to see is IT staff be viewed as professionals, with a skill set, that deserve to be treated like development officers and program managers. This is where the disconnect is. Plus, as we all know IT staff can walk so treating them well is something that should be a priority for any non-profit.
I won't pretend that I wouldn't like more money--of course I would. But the day I start measuring my worth in dollars will be a sad day. Here's what I think about this study ...
The median household income in New York City is 39,285 -- that means that a non profit webmaster in a two income household could be earning twice the city's median income.
I have no plans to walk away from my commitment to choosing my work based on the contribution I'm making to my community. If I'm not a positive force in society, why bother getting out of bed in the morning? That doesn't mean I'll only ever work in a non-profit, and it does mean there are a lot of non-profits I won't work for.
Some of what we need to address is that for-profit salaries are grossly out of scale in our economy.
Plenty of nonprofits have wicked smart IT staff, plenty of for-profits have bone headed fools for IT staff. And vice-versa. If nonprofits can bring in very smart people at subpar wages, what this study says to me is that there are a lot of for-profit jobs that are so dismal, with so little hope of offering a positive impact in the community, that the for-profit world has to make up for the sorry state of their dilbert-like work environments with cash money.
As somebody who works for a non-profit organisation, I'm fully aware that I could earn a great deal more working for a business, but I care much more about the cause my organisation supports than I care about money, and I easily earn enough to live a lifestyle I'm happy with (in fact I often think I earn too much, since I tend to spend a lot of money on consumer products that I don't need). I think the same can be said for many of the people here; they've chosen to work for less money because they think there are more important concerns for the world and more important things than themselves.
In the smaller orgs settings (~5 staff), we don't have IT staff. IT skills is a (hidden) plus when hiring regular program staff.
In today's overheated world, I think it is a tribute to the industry that an increasingly large slice of society's best and brightest is willing to learn to live well on less, and I'd also love to see a comparative analysis of what those workers are spending their money on. My hunch is that we'd see differences in spending patterns to show that workers in this field are doing even more for society than is in their lower paid job descriptions. Comparisons on some happiness indicators would also be insightful. In short, there's more to this picture than I think can be measured with a quantitative salary comparison. Thanks for the very thought provoking piece!
One constraining factor in NP sector IT salaries, is the salaries of the other staff in the organization.
Nonprofits i've worked in, have set IT salaries within the salary scale the org uses across the board.
In a for-profit it is easy to imagine that the financial consultants, stock dealers, Sales managers etc would have salaries that are in proportion to the IT dept. In a non-profit human services org for example, that is far more likely to be an issue.
This must factor into the large differences, on top of the "doing good" discount.
Yup - it was a great conversation that only led to more questions. But it's nice that smart people are thinking about these things.
I agree about those lifestyle questions. Fresh out of college I had a job that paid me less than $20k a year. I didn't have subsidies from my parents, but lots of my colleagues did. In the end, I was working so much that I didn't have time left to figure out how to live on under $20k a year. It was definitely unsustainable.
Holly - couldn't resist jumping right in, as one of the principles in the NTEN Discuss thread.
First, I'm paid fairly by my org. I could make a little more at a similarly-sized for-profit. The gap is far less than the one represented above, and there should be a gap - I certainly consider the opportunity to do meaningful work as a part of my compensation. But I think that part should be in the 5% to 20% of the commercial market range. Putting it at 20% to 40% changes the equation from the value of mission oriented work to the willingness to starve -- or not be able to support a family or buy a house.
Here's another metric for the survey: Are you married? Is your spouse the main breadwinner? Do you own a home? How old are you? These are personal questions that most salary surveyors wouldn't dare ask, but it makes me wonder, again, if we're limiting the candidate pool to the people who can afford to take the jobs.
I've stated my support for salaries being set as offsets of the commercial market, as opposed to averages at nonprofits, at http://techcafeteria.com/blog/2008/04/04/fair-pay/. I really appreciate you taking it a step further. This is an issue that needs to be addressed.






Holly, I love knowing you have a grand shoe collection!
Amanda Hickman, you suggest the higher pay in for-profits has some correlation to the jobs being terrible Dilbert-like situations? That seems like a leap. Dilbert lives in non-profits too. Plenty of of corporate folks get paid big bucks because their contribution generates big bucks for their employers. I've been working for years in a software vendor's consulting group. Our software can save or make our customers many millions of dollars, so these customers pay big to have consultants come in and help them use it. My employer realizes they need top notch consultants to do the job, and they can afford to pay us quite well. It seems obvious to say, but sometimes salary ranges are driven by economics rather than work conditions. The first five years I was in the job, I loved it! The money wasn't compensation for living terribly--though I admit that I'm ready for a change. I want to be
"a positive force in society," as you say, so I'm planning my exit from serving purely corporate interests.
I wonder about salaries at companies that serve non-profits. I know Kintera is a train wreck right now, but what about Convio? That seems like an employer that might offer the best of both worlds. I wish I had come to this thread earlier to get input on that.
Anyone know what Convio consultants bill out for? Anyone know their salary range?
;-)
Thanks,
Bill