Working at a nonprofit organization can be rewarding and challenging. Many people thrive in mission-driven organizations and love seeing how their work makes a difference. Still, there are some drawbacks, so if you’re thinking about pursuing a career in the nonprofit sector, it’s important to spend some time considering the advantages and disadvantages and looking at all the information.
Read on to learn about what nonprofits are, how they function, and the impact they can have on your career.
What Is a Nonprofit?
Nonprofits are organizations that serve the community and public in areas such as charitable work, education, science, research, the arts, religion, and other important contributions to society.
Nonprofit organizations are tax-exempt under Internal Revenue Code Section 501(c)(3), meaning they are not required to pay income tax on their revenue because of their societal contributions. Any revenue the organization earns must be used to further the cause or purpose of the nonprofit after operational expenses such as employee salaries.
Examples of Nonprofits
Many of the organizations you know, respect, support, and perhaps give donations are nonprofits. Some well-known names include:
• The AARP
• Audobon Society
• Boys and Girls Clubs of America
• Boy Scouts of America/Girl Scouts of America
• Council on Foreign Relations
• Habitat for Humanity
• Planned Parenthood
• The Red Cross
• The Salvation Army
• Save the Children
• Teach for America
• TED Talks
• The Trevor Foundation
Many college and universities, museums, libraries, and other societies are also nonprofit organizations.
Who Typically Works for a Nonprofit?
Nonprofit work isn’t for everyone. While the work can be rewarding, there are some drawbacks, as we’ll discuss further. People who thrive in this type of setting, whether it’s a charitable foundation or an after-school tutoring program, often have qualities such as:
• Passion for a mission over salary
Working at a nonprofit often means earning a lower salary. If you’re someone who wants her work to have meaning—over factors such as earning a high paycheck—then the nonprofit world is for you.
• Diverse skill sets
Employees of nonprofits tend to play many different roles, even if they were hired for a specific position. Often, teams at nonprofits are small because of funding constraints, so you can expect to perform work that falls outside of your job description. That’s why it’s helpful to have a diverse skill set—so even if you were hired as a copywriter, you can pitch in when a computer glitch arises.
• The desire to learn and grow
Because teams to be small and mission-focused, you’ll often have the opportunity to work closely with leaders at your organization and may be able to move up the ranks quickly. Furthermore, because you’ll be working on many different tasks, you’ll be able to learn about a wide range of aspects of business and the working world.
Education for Nonprofits
Many people who begin working in nonprofits can do so with a bachelor’s degree. In some cases, it may be useful to have a degree in the field related to the organization’s mission or the kind of work you’ll be performing there. For instance, someone working at an education-related nonprofit might have a BA in education or a humanities discipline. An accountant at a nonprofit, on the other hand, will often have a BS in accounting or a related discipline.
Depending on the nature of the work and the individual’s role in the organization, she may choose or need to pursue a more advanced degree. Some common advanced degrees for those who want to take on leadership positions in the nonprofit sector include:
• Master of Nonprofit Management
• Master of Public Health
• Master of Public Policy
• Master of Publication Administration
• Master of Urban Planning
• Master of Social Work
Pros and Cons of Working for a Nonprofit
As with most kinds of work, there are advantages and disadvantages to working at a nonprofit. Here are some of the main pros and cons:
• Like-minded colleagues
While not everyone working in a particular nonprofit may be extremely passionate about the mission—after all, every business has employees who mainly care about the paycheck—many of them are. Working in a nonprofit is usually less lucrative than working in other spheres, so most people work there because they want to.
• Opportunities for growth
Often, employees of nonprofits have the opportunity to move up the ranks fairly quickly. This is because teams tend to be small and resources are limited, so fast learners who can do more with less have the advantage of making a real impact—and doing so in a way that’s visible to their supervisors. Furthermore, because you’ll be able to learn new skills and assume a range of responsibilities, you’ll be more marketable for future positions you choose to pursue.
• Less hierarchy
In contrast with for-profit organizations, there is often a less established hierarchy at nonprofits. While there is usually a leader or leadership team, other employees generally remain in frequent contact with these individuals, so you won’t feel forgotten or as though the work you put in doesn’t matter.
• Focus on mission
Perhaps the biggest advantage to working at a nonprofit—and probably the one that drives you to work there in the first place—is that you’ll be working on a cause that excites you and make a difference in the world, even if the day-to-day work moves slowly. Passion for your work is extremely important, and it’s a lot easier to find when your work involves a cause that drives you.
• Long hours
As discussed above, nonprofits often consist of small teams that require their employees to wear a number of different hats. Because of this, many nonprofits require their employees to work long hours. Given that that cause is one the employees support, they may have a vested interest in working longer and harder, since they are furthering an important cause.
• Low pay
Nonprofits generally don’t have big budgets, since the money is supposed to go toward furthering the cause that is the mission of the organization; donors want to see their dollars being spent toward the mission, not high salaries for personnel. This is often a drawback for current and would-be nonprofit employees.
• Limited resources
Nonprofit employees must be adept at doing more with less. Systems are often outdated or not advanced, tools are limited, and there’s a low budget for new resources. This goes hand in hand with the low-salary drawback: Nonprofits want a greater percentage of their revenue to go toward the mission rather than operational costs, because this will attract new sources of funding.
• Focus on fundraising
Nonprofits live and breathe fundraising to the point where employees may become frustrated or overwhelmed. Depending on the organization and job duties of the individuals in question, people may be fired for failing to achieve fundraising benchmarks.
Typical Nonprofit Benefits
While nonprofits tend to offer comparatively lower salaries to employees, many provide additional benefits and resources due to relationships with other organizations, internal programs, and other arrangements and opportunities. Some common benefits include:
• Continuing education or tuition reimbursements
• Time off to volunteer
• Health insurance (and sometimes vision and dental insurance)
• 403(b) (functions similarly to a 401[k])
• Recognition or service awards
• Group memberships to museums and other cultural institutions
• The services of the organization (e.g. free museum admission)
• Cell phones or tablets
• Telecommuting options and other flexible work arrangements
Popular Nonprofits for Recent College Graduates
Nonprofits can offer plenty of opportunities for recent graduates. Since you’ll learn a lot working at these organizations, they can be a great way to boost your skill set while gaining work experience. Plus, you’ll have a better chance at performing higher-level work (and possibly having a fancy title to go along with it).
Some other organizations that frequently have entry-level positions or opportunities for recent college graduates include:
• 826 National
• AmeriCorps VISTA
• The Aspen Institute
• The Bill & Melinda Gates Foundation
• Boys and Girls Clubs
• The Peace Corps
• Teach for America
There are many local organizations that have positions open to recent college graduates as well. If you want to get your foot in the door, volunteering or doing a paid or unpaid internship is a great way to start. This puts you on the organization’s radar, so if a full-time job opportunity arises, you’ll already have an in.
Also, keep in mind that many successful nonprofits, such as the Food Recovery Network, were started by college students. If you have a mission in mind, check out How to Start a Nonprofit Organization to learn how you can make your idea happen.
How Do Employees of a Nonprofit Get Paid?
Employees of nonprofits are paid from funds that are acquired through fundraising efforts, grants, or the compensation earned from the delivery of goods or services, such as college tuition. Often, salaries come from a combination of these resources. Salaries are part of the organization’s operational budget.
There’s no exact limit to how much a nonprofit can pay an employee, but the IRS may penalize organizations for excessive pay, as well as the individuals who receive overly high salaries at the nonprofit. This is usually a matter of circumstance and depends on the overall budget and operating budget of the organization in question.
How Do You Make Money If You Own a Nonprofit?
Technically, a single person or multiple people cannot “own” a nonprofit. Nonprofits must have a board of directors who are considered the leadership or councils for the organization. They may be appointed by the founder of the organization.
The board of directors should help determine an appropriate salary for the founder and leader of the organization. As with employee salaries, the leader’s salary comes from the operational budget for the organization. The caveat regarding excessive pay comes into play here because often the CEO or president receives the highest level of pay at the organization and can raise some red flags if her salary is deemed too high in comparison to the amount spent on organizational mission-related activities.
Do You Get a Tax Deduction for Working for a Nonprofit?
While a nonprofit organization is tax exempt, employees who work in the organization do not receive any tax deductions or special tax statuses for working within a charitable organization.
However, if you must subsidize benefits such as health insurance due to the organization’s budget constraints, you can usually deduct them from your taxes. Donating money or items to the organization can often give you a tax deduction as well.
Interested in working for a nonprofit? Check out employee reviews of hundreds of nonprofits in a wide range of industries on Fairygodboss.