It is common knowledge that if you choose a career in the non-profit sector, you should expect to be paid less, sometimes significantly less, than if you choose to work in the private sector. Evidence^[1] supports this understanding of how the world works. There are of course some exceptions to this but by and large we see those who want to make the world a better place being undervalued compared to those less concerned about people and planet.

And it isn’t just restricted to NGOs. In their book ‘A Good Disruption’, the authors say ‘For companies, having an appealing vision and set of values is also a competitive advantage in the labour market’. In relation to companies that are ‘doing good’: ‘…companies without such an appeal have to pay significantly more to attract young talent’.^[2] By this they mean that companies can attract talent at lower cost if they are making a positive contribution to society.

A notable exception would be salaries for staff working in grant-making foundations. At MAVA, I can safely say that MAVA staff are appropriately remunerated. This is also the case for many of our fellow funders. And yet, we funders persist in joining the view that those we fund should be paying minimal wages to staff to carry out the work we fund.

This argument is completely in line with the seemingly-accepted world view that meaning should form a significant part of the remuneration package, replacing other forms of compensation. Working ‘for good’ is meant to be psychic income and does count for something. But psychic income doesn’t pay the rent or buy groceries. While I understand that ‘this is just how the world works’, I would argue that somehow this approach is topsy-turvy and we should not accept that it works like that. Why do we undervalue people who are trying to make the world a better place? Why do we persist in believing that paying decent, or even reasonably generous wages for people working non-profits is ‘outrageous’?

This is sometimes driven by the philosophy of NGOs themselves. The CEO of one of the WWF affiliate offices once told me that they intentionally underpay because they want to ensure their staff are truly driven by the mission. I understand the idea here but would argue that it is possible to have both a purpose-orientation and a livable wage.

We ask a lot from non-profit staff

Working in the non-profit space is challenging. When I was at WWF International, I frequently came across people from the private sector wanting to switch to ‘something easier’ in the non-profit space for the final stages of their careers, only to have a rude surprise at just how tough it is to work in that environment.

What makes non-profit work so hard? Huge complexity that must be deftly managed; enormous resistance to overcome; lack of resources making everything that much harder and involving impossible trade-offs; and expectations that you will devote yourself heart and soul (night and day) to the cause, for little pay and probably little recognition. Non-profits have high rates of burnout and the constant stress of needing to fundraise to cover costs. And because funding is often short-term in nature, in addition to low salaries, non-profits staff are faced with constant uncertainty of future employment.

Sometimes these jobs entail dangerous, sometimes life-threatening assignments. Think of front-line humanitarian workers in high-risk areas or even war zones (not to mention the stress of loved ones which, as the mother of someone who frequently visits high-risk areas, I can attest to from personal experience). Think of the high rates of murder for environmental activists^[3] – reaching record numbers in 2020. Paying non-profit staff is an appropriate acknowledgement of the very hard work they do in difficult conditions.

We need great leaders

Particularly at the leadership level, talented, highly skilled leaders are needed. And here is where we see the highest salary differences. Some research shows that the salary differences are more modest at low to middle-levels of non-profits when you take the full package into account, but that senior levels pay the highest price in terms of lost salary. One study found that executive pay in a for-profit was on average two-thirds higher than in a non-profit.^[4]

Joan Garry, a non-profit consultant and former non-profit CEO, comments on the phenomenon of salary angst particularly amongst CEOs of non-profits in the US where salaries are disclosed openly. There is genuine dread at having to justify salary levels in a world where minimal salaries are seen as virtuous. This is in stark contrast to the private sector where CEOs vie for the honor of being the highest paid. This is seen as a ‘measure of effectiveness… Companies fall over themselves to pay more money to attract the candidates they consider the best.’

Likewise, a recent story in the headlines intimates that the Black Lives Matter founder, Patrisse Cullors, had to resign due to criticism over the discovery that she owns several homes. There is no evidence of any impropriety or misuse of funds, so this is merely an overt example of the double standard we hold for non-profit leaders. We can debate whether anyone should be owning four homes, but would the same outrage be applied to leaders in the for-profit sector? The answer is a resounding no. On the contrary, they would be admired for this demonstration of ‘success’.

There is an understandable desire to ensure that philanthropic money – whether from individuals or institutions – goes towards the mission and work on the ground. However, the missions for most non-profits that I’m familiar with are dependent on good people to implement. No one wants to think of their hard-earned money going toward lavish salaries and expenses; I feel the same way. And I admit I squirmed in my seat when I researched what some top executives at big NGOs in the US are paid. But let’s not confuse paying market rates to attract and retain good people with ‘lavish’ or abusive use of funds. People coming from the world’s top universities can command high salaries and if we want to attract them to the third sector, salary levels need to be at least not laughable. Strong leadership is not just important for a nonprofit – it’s absolutely critical. The CEO in particular ‘is the voice and face of your organization. The strategist. The visionary. The lead fundraiser. The advocate. A leader in your sector.’^[5] Who doesn’t want that in support of the causes we support?

Leadership in the non-profit sector can make the difference between doing ok and having a real impact. Let’s value those skills appropriately.

Make it easier to choose a career in the third sector

In my coaching practice, I have frequently come across the phenomenon of people saying ‘I would love to have a career that is more impact-focused, but I can’t afford the drop in salary that would entail’. Likewise, young people making their choices for career direction following their studies often feel they should establish themselves in the ‘real world’ first before following their passion into the NGO space.

The world needs people willing to do the tough jobs that help make the world better. We need more passionate and committed people, dedicated to making the world a better place. Let’s make it easier to make that choice by not forcing a trade-off between meaning and money.

How funders can be part of the solution

So what can we as funders do about this? Here are some ideas:

• We need to make it easier to choose a career that contributes to a better world. I’d love to see more value given to the contributions that improve the situation for people and the planet, and conversely, see a concomitant devaluation for those who do the opposite. Meaning is not a replacement for salary but should be a highly sought complement to it. Donors of all kinds that fund non-profits must recognize the value of paying for talent and agree to fund people at levels that allow them to support their families without undue sacrifice.
• We can accept to pay more in overheads to give our grantees more flexibility in meeting the needs of their organization, whether that is paying correct salaries to attract talent or providing leadership development to strengthen how the organization is run.
• We can support our grantees in offering creative benefits packages to attract and retain talent.
• In addition to the practical steps above, there is a broader societal shift needed, one in which we stop glorifying the accumulation of money for the sake of having as much as possible despite the consequences. Why not have a list of the top 10 people making the world more livable in place of the UK’s Sunday Times Rich List? We as funders must contribute to the systems change needed to eliminate the accepted trade-off between meaning and money.

Be a dreamer

The annual Skoll Forum, held in Oxford in pre-Covid times, is a great example of valuing contributions. The winners of the coveted Skoll Awards for Social Entrepreneurship are cheered like rock stars, including standing ovations and wild screaming.

Call me a dreamer, but this feels to me like how the world should be.

Lynda Mansson is Director General of the MAVA Foundation.

This article was first published on mava-foundation.org on 29 November 2021. It is being re-shared in Alliance with permission.