Working at a non-profit organization that "can't afford" merit increases

38 Comments

1. AnonymousJune 7,2024 at 5:20PM UTC

   If you need to make more money, then honestly, your best bet is to start up a job search. They have already made it clear that increases aren't going to happen right now.

   My one and only foray into the nonprofit world may have made me a bit jaded, but I would definitely not go back to it. The one I worked for was not cash poor. However, try as I might, I couldn't get decent increases for our lowest paid employees. I was told that they should feel blessed to work there (or something along those lines) while the new COO there was higher compensated than nearly every single VP and executive I currently work with at a for profit company.

2. SarahJune 7,2024 at 5:35PM UTC

   This was the same situation at the non-profit I used to work for.

3. SarahJune 7,2024 at 5:33PM UTC

   They used to call them "cost of living" increases but in the last several years switched to "merit increase." I think that is a strategy to avoid paying it in certain instances. I, too, used to work for a non-profit. They had a max "merit increase" % and sometimes inflation was higher than that. Usually, those with higher paying salaries got the max and the lower salaried employees got nothing (or so very little it may as well have been nothing). Meanwhile, the very top of the salaried employees got maxed out merit increases plus bonuses! They SHOULD offer cost of living increases (which just keeps you afloat at the same level) and give merit increases. All this to say, it's probably best to look for another job.

4. AnonymousJune 7,2024 at 5:41PM UTC

   Companies that don't budget for pay increases are not well run. Over time, they will only employ people who can't do better somewhere else. Or, worse, they will only pay well for those people who are stellar negotiators, at the expense of the rest of the workforce. Understand the difference between loving your profession, loving your immediate supervisor and loving your employer. Then dust off your resume.

5. AnonymousJune 7,2024 at 5:57PM UTC

   Welcome to the world of nonprofit. This is pretty common.

   If you want to stay put, then I would look for a side hustle that can bring in extra $ to help your financial situation.

6. AnonymousJune 7,2024 at 7:55PM UTC

   NO company can really guarantee merit increases, you shouldn't expect them and feel it their responsibility to fill that COL need. IMO, now I get it, it would nice, however, what I appreciate that you shared is that if they have money it should include all, that in some companies is not the case. Relying on grant money and align with fiscal responsibility of utilizing funds for the purpose and not staff is a regular and important practice.

7. AnonymousJune 7,2024 at 8:46PM UTC

   I've sat on several nonprofit boards and seldom does management include increases to staff compensation when calculating and budgeting for grants, funding etc.

   It seems the sophistication level of your average leadership of running most nonprofits is very shortsighted and limited.

8. AnonymousJune 8,2024 at 12:42PM UTC

   I am sorry. I don't have any advice, other than sending you solidarity. I also worked at a nonprofit that had a policy of not allowing salary negotiations at any point (hiring, review time, promotion, etc.) We got COL increases but it wouldn't surprise me if some of my former colleagues had left because there was negotiation.

   If there are enough of you in the same boat, any chance you might collectively as a group ask for at least some sort of small increase to cover the COL? A long shot, perhaps, but other than getting another job or a side gig I don't know if you have another option.

   Good luck! I am sorry.

9. AnonymousJune 8,2024 at 1:02PM UTC

   Look for another job, this will not change. Were you expecting something different working at a nonprofit?

10. AnonymousJune 9,2024 at 5:03PM UTC

    That's a bit crass. I didn't expect to be rolling in the dough, but I also didn't expect to never get a raise of any kind. I just want to be able to make ends meet and inflation is real. I'm closer to my retirement years vs. working at entry level and I think I should be able to make a living working one job rather than having to supplement my income with a second job.

11. AnonymousJune 10,2024 at 12:52AM UTC

    I’m not sure what’s crass about this response. You seemed to have known the answer to your own question as soon as you hit post. Non-profits are notorious for low pay. This is not the place where you’ll accumulate wealth or hefty pay bumps and bonuses. If that’s what you’re after, move to a corporate role. I’m unapologetically focused on high pay and massive bonuses. That’s why I work for a publicly traded Fortune 25 company. Large corporations can do really good, meaningful work too.

12. AnonymousJune 8,2024 at 1:02PM UTC

    Welcome to the world of the non-profit. I love this sector because they do good work for the community and most employees are very committed to the company's mission. That said, one of the sad realities of the non-profit world is that the pay isn't that great, so it becomes a good place to do an internship and be hired if you make a good impression. The downside is that there is no steady stream of income. While some that have reached full national attention have CEOs/EDs that make six figures, this represents a small percentage of the non-profit world. In the ones I have worked at (all local and relying on foundation grants and grass-roots fundraising events), the ED was not making twice what I was, so it was a labor of love for them and most employees. I could have made more in the for-profit world, but I didn't want to (and still don't). If money and title are what you are looking for in the job, (more than the work), this can be a frustrating sector. Many of my coworkers have had second jobs or side hustles to help boost their incomes. Some non-profits can't even afford COL raises.

13. GirlBossanova934974June 8,2024 at 1:05PM UTC

    Having actually run a non-profit or a very large section of a non profit, this is simply a BADLY MANAGED non profit. However, this is the problem you sometimes get with NON professionals trying to manage large enterprises. In my non profit days, I had to get rid of non profit board members who did things similar to what you are dealing with. BUDGETING IS BUDGETING. So many salary dollars to go around which is based upon grant and/or other outside revenue. So budget for salary increases and get off the dime and look for "other revenue". As for grants, get some folks on the grant side who know how to "get the big bucks" and deliver. No different than enterprise sales at a for profit organization. What is the PIPELINE looking like? Let's sit down and review the pipeline and how we can fix whatever parts of the funnel we need to......PS: I turned my non profit from a $240K deficit into $440K surplus in 3 years. They lived off the enterprises I set up for well over a decade. We got our money from tradeshows and made incredible money doing it......

14. Kathryn BuerJune 8,2024 at 10:44PM UTC

    Wow, you make it sound so easy but that is not the non-profit world today. Donations are down in almost every category of mission. Grants have tightened their belts too in the last few years as their funding slows down. With less money we have less people, and less time and hands to do more. I don't have a quick and dirty answer for you but maybe a good brainstorming session with all your teammates and letting go of some programs or roles temporarily can free you up to implement some of Girlbosses's suggestions?

15. GirlBossanova934974June 9,2024 at 5:18PM UTC

    Unfortunately, that is the same old tired line of excuses I heard 15 years ago, 10 years ago, and 5 years ago. The fact is that many consider non-profit work as some "sort of better calling" aka something to keep themselves busy or to elevate themselves in an organization when they have proven to be unsuccessful in the for profit world. I myself raised millions of dollars in the teeth of very bad recession, 2009-2011. It can be done. I found all sorts of ways to raise money and pay off the massive debts that my "looking for a better calling" predecessors had left me.

16. Kate HopkinsJune 8,2024 at 3:08PM UTC

    Any company on occasion can go through rough patches and may need to implement cost control measures. However, non profits - especially small-medium sized ones, often sacrifice staff compensation because they feel like people work there for the mission, not the money. It's pretty bad management, IMHO. Boards don't like to cut programs, even when the financial picture demands it. And senior management doesn't like to tell the board that they can't endlessly expect staff to do more with less pay. It's a vicious cycle and it requires really strong leadership to make tough decisions.

    I have first hand experience - I was the CEO of a nonprofit that was losing $1m on a $6m operating budget when I was hired. I closed down two underperforming sites and prioritized market adjustments for staff we couldn't afford to lose anymore and started the process to get the rest of the staff on transparent and equitable salary bands. We ended the year with a balanced budget, but I was rewarded by being asked to leave. The board just wasn't happy that I was questioning the bandaid approach to ongoing fiscal management. If it had been a for-profit company, I probably would have been given a bonus!

    Non profits aren't all bad - but if you can't afford to pay your people fairly, then you need to take a hard look at your budget process and what programs can and should continue.

17. AnonymousJune 8,2024 at 4:21PM UTC

    Not for profits are limited by the rules of engagement they have set for their beneficiaries. Alas, there is not a solution but for leaving their employ.

18. AnonymousJune 8,2024 at 4:49PM UTC

    I'm in the same boat as you are. I have worked for a private non-profit university for the past three years. I have never received a raise since I started here. Many people (more than 40 percent of staff and faculty) have been laid off in the past nine months. I asked the vice president a couple of months ago if there were any funds available, possibly $500 per person, to provide raises. She responded "no." It's a tight job market. I'm choosing to stay and work a couple of sidegigs because the benefits of my fulltime job are so good.

    I hope you find a good solution to your situation--I wish there were an easy solution.

19. AnonymousJune 8,2024 at 11:42PM UTC

    That’s a really hard question. If you really love what you’re doing, you could hang on until funding gets better, which it could. Or, perhaps, look for other opportunities within the same organization that are above your current pay grade that you may be qualified for.

20. AnonymousJune 8,2024 at 11:45PM UTC

    I've found that most people don't work at non-profits for the great compensation or resume value. They sacrifice compensation and status for the value if the mission.

21. AnonymousJune 9,2024 at 4:53PM UTC

    I agree with working for the value of the mission vs. the great compensation and I am very fulfilled by my job. When I started here, I felt it was a noble effort, but I am barely scraping by financially. I knew I wasn't going to be making the big bucks at a non-profit, but I certainly didn't think I'd never get a merit increase. I think everyone expects at the very least to get incremental pay increases, especially when they get glowing performance reviews. I personally would sacrifice the extravagant holiday party that ultimately turns into an upper management "show" and funnel those funds back down to merit increases. For example, last year the holiday party was a Hollywood theme and we were all expected to wear gowns & black ties. We had to purchase our beverages, non-alcoholic beverages were $7, wine/beer/alcoholic beverages started at $8 and up. We had to pay for parking and if we wanted to rent a room, the group rate was $130/night. Prizes like 55" screen TVs and all expense trips were given away at midnight and you had to be present to win, so if you couldn't afford a room for the night and didn't want to travel after midnight, you forfeited a chance to win anything. I have begun to opt out of attending the holiday party because I can't afford to go to something that is supposed to be an employee appreciation event. We're supposed to get all dressed up, travel to an expensive venue where you MUST check in by 6:00pm to participate but you are not allowed into the ballroom until 7:00pm so you're supposed to stand in the hallway buying $7 soda or $8-15 drinks (no appetizers), wait until 8:30pm to be served an expensive meal. It's all over the top when most of us would value an event on a smaller scale that we could attend in our "Sunday best" clothes without breaking the bank and still get a 50 cent raise every year.

22. AnonymousJune 9,2024 at 5:31PM UTC

    Your leadership wants a dog and pony show. I would decline the invitation due to financial burden.

23. Kate HopkinsJune 9,2024 at 5:53PM UTC

    Yeah, that's shitty and tone deaf of your leadership team to hold an event like that.

24. AnonymousJune 11,2024 at 9:49AM UTC

    Nonprofit director here. This sounds like management is so far removed from their staff that turnover is unavoidable. They obviously have their priorities messed up and you will probably never receive a raise because they don’t know how to manage funds. I’d weigh your options. You either live on the struggle bus or move on. Either way, I’d let management know your thoughts on the holiday party and the turnover rate because everything you’ve talked about are valid points. Best of luck to you!

25. AnonymousJune 9,2024 at 2:04PM UTC

    If the non-profit is 501(c)3 it is required to publish their 990 forms. These include the budget and a five-year comparison of income and expenses. If the forms don't appear on their website (which many do for transparency, usually in their "About Us" section) the IRS has a search tool that I have used when looking into non-profit jobs. I am seeking an executive position, so the company's financial status is important in my decision.

26. AnonymousJune 10,2024 at 12:35PM UTC

    Career nonprofit person here (15 years and counting)--it's one thing to say that they can't afford to give you a raise right now (that is often an unfortunate reality not just in nonprofits but in the private sector as well as I understand it). The red flag for me is that you can only receive one when everyone else receives one--then it's a cost of living adjustment and not a merit increase because it has nothing to do with your actual performance if everyone is getting them at the same time. Make no mistake about it: people at nonprofits can and do make more money based on their job performance and credentials than peers with the same title- just like what happens in other industries.

    My advice is to look elsewhere, not just because you're struggling financially while working there but also because they aren't being upfront or honest with you, and their policy about everyone getting an increase at the same time makes no sense. Make no mistake about it; the larger issue is that this is a poorly run nonprofit.

27. AnonymousJune 10,2024 at 1:53PM UTC

    There a lot of companies who pay out merit increases all at once, it's easier to keep track of the increases given. That statement does not mean they will give everyone 4%. Depending on how they structure the merit increases will depend on the amount each eligible individual will receive.

28. Daria Skibington-RoffelJune 10,2024 at 3:17PM UTC

    I'm the ED of a nonprofit - the only employee, and have been working in the field for 15 years. Our organization's usual expenses went up so much this past year, that we're just scraping by right now, and we need to get some serious fundraising done in the next month. I do all of the bookkeeping and the payroll (with a payroll provider so I'm not doing 100% of it myself), and I know that a raise for me right now is not even remotely possible. I work part time from home, so we don't have to pay for an office.

    The cost of living has also gone up exponentially, and I would love to make enough to pay all of my bills, but I know that my org just doesn't have the money. While nonprofits are wonderful to work for because the bottom line is service to others (a huge value of mine), the pay really isn't great.

    The reason for that is that most funders: grantors, donors, sponsors, etc. do not want to pay for what they call "admin" costs: staff. This may come from years of the mega-charities paying their CEOs 6-figure salaries that equal more than what the Prime Minister makes in a year. They seem to assume that all charities are the same. (Trust me, I'm nowhere near 6-figures... not even close.) It's a common problem that makes all of us want to scream on a daily basis.

    Sure, they want to cover the costs of the programs, but not the staff who actually run them. It's absolutely ridiculous! If I had a dollar for every time someone has told me that they won't donate to a charity with high "admin costs", and I have to educate them on what admin means, I might have enough to pay the mortgage this month.

    If yours is a large organization, with lots of employees, I can see why they might have the policy that everyone will get their increases at the same time: when the organization actually has enough to give everyone their merit-increase in pay - so that no one is left out when the raises are done. That's common practice with a larger employee base, because those "admin costs" are higher and they can't get people to see that *people* are the ones running the programs, and people must get paid enough to live on.

    I'm working on finding a side gig, like making calendars for Etsy, or selling print-on-demand things like stickers and t-shirts. (I am good at graphic design, and apparently, this is a thing.) Nonprofit is my passion - I've worked for oil companies, IT forms, hospitals, and in security - but nonprofit is what makes my soul sing. So, I do what I can.

    However, if a side-gig is not feasible, and you are not getting nearly enough to pay your living expenses, see if there are larger nonprofits that are hiring. Unfortunately, if your organization is like mine, their hands are tied until they can get more funding in.

29. AnonymousJune 11,2024 at 12:22PM UTC

    This is absolutely my experience.

30. AnonymousJune 10,2024 at 8:41PM UTC

    30 year non-profit employee here. It will always be that way at that particular organzation. It is up to you to accept it or let it get to you, but you don't have to agree with it. You obviously deserve a raise, but they cannot afford one. I have been given very few raises over my years and would accept it until I started feeling bitter the longer I was there. Then I knew it was time to move on for a larger salary.

    They have asked for feedback of what they can do to retain employees. Work from home days if you stay with them for X amount of time? Paid days off given one day for every X amount of time working there. Leave early Fridays once a quarter. Can the Board sponsor ice cream socials once a month for staff on a Friday or pizza? Sometimes the little things help. It can be as simple as ice cream sandwiches and an afternoon outside.

    If you receive grants, there must be someone writing them. Can they research continuing ed or conferences and see if there are opps? I have gone to many out of state conferences with grant funding. If that person doesn't have time, see if there is a volunteer org in your community with someone interested in helping write grants.

    Can you think of ways that would make you feel like you are receiving a benefit without costing the organization money?

31. LORI-ANN BURLINGAMEJune 10,2024 at 10:25PM UTC

    When an organization claims that they are "losing money", I have to wonderful why. Is the grant money not being used wisely? Does the organization do any fundraising? Does it participate in other community activities (bake sales)? You may want to check Charity Navigator for the unbiased rating of your organization.(https://www.charitynavigator.org/).

    Did members of management receive a pay increase?

    You may want to create a pros and cons list to help you with your decision.

32. AnonymousJune 12,2024 at 4:31PM UTC

    I checked out Charity Navigator and can see that our CEO was compensated over $400,000 in 2022!

33. AnonymousJune 11,2024 at 6:11PM UTC

    I am on the board of a nonprofit organization, all of us are volunteers, not only we don’t make money, but we are putting my personal money sometimes to travel to donate to support the cause of my organization.

    If they cannot afford a marriage increase that is because they cannot afford it. There is no cheating or suspicion in this all of us are working for cause that we pay our own money into this. Rather than being paid.

    Most of us, from the board to management, have already made a career somewhere else, we come to a nonprofit in order to give back. If you are still at a career stage that you need to make ants meat to support your family, then do not work for a nonprofit. Work for the private industry where you will be properly compensated nonprofit is not for people who need to make money get promotion or financially rewarded. It is only for a cause and forgiving back.

    so think strategically out of the box look at the big picture and decide at your current career stage. What is more important for you? Making money to support the family definitely leave nonprofit go find a job in the private sector where you will be properly compensated. if it’s time to get back then do like we do work for nonprofit putting our own money and time and effort to do a greater good and work for a cause

    I hope you make a decision that is the best for you and your family! I wish you best of luck!

34. AnonymousJune 11,2024 at 6:13PM UTC

    I was dictating and sorry for the typos

35. AnonymousJune 12,2024 at 11:39PM UTC

    As recommended by someone who commented on my post, I checked out Charity Navigator and can see that our CEO was compensated over $400,000 in 2022! I'm confident that upper management receives their bonuses but have no proof of it and the rest of us are entered into a drawing for a CHANCE to win $100 for no unexpected absences (in other words, anything other than planned PTO). I'll be updating my resume.

36. AnonymousJune 13,2024 at 7:05PM UTC

    This is not helpful, CEO for multinationals make 10-20 million a year, -1level EVP makes 1-5 million a year, -2 VP level makes 500k-1m a year, Senior Director 300-500k a year, so on and so forth, what’s the point of comparing to levels above you there is a ranking in every company and every level.

    If you want to get high pay, you go to work for a company that you’re a CEO gets paid 20 million then you will be paid paid high, if you work for a CEO who only makes 400 K then you can only make 100k. It is very simple math

37. Janet ParkhurstJune 13,2024 at 4:53AM UTC

    "Admin" is just another word for "women." Clearly, women who need an actual living wage should avoid nonprofit. And, I have to add, not all FOR-profit companies pay women, either. C'mon, people. The gender wage gap is alive and well. My advice is to find a job that keeps up with today's rising costs and pays you fairly for your time. If you want to do nonprofit, volunteer on your free time. But cover your OWN expenses, first.

38. Daria Skibington-RoffelJune 13,2024 at 8:09PM UTC

    Agreed with the corporate world not paying women enough. This is a societal problem which really needs to be addressed and resolved.