by Carrie Gray, Director of Executive Search
The qualities of a great leader in the nonprofit sector have evolved over the years. Leaders need to be passionate about the mission of the organization they are leading, and they must also be savvy about business, fundraising, and succession planning to sustain the organization. In recent years, nonprofit boards of directors have worked to bring stronger business acumen to the executive leadership role.
As the nonprofit leadership landscape is changing, compensation is also shifting to attract and retain the right leaders. Many nonprofit boards have brought compensation to the forefront of their discussions in recognition of the need for talented human capital to fulfill a nonprofit’s mission. The adage that you have to spend money to make money rings true in the nonprofit world. The finance team, advised by the board, must be willing to invest in its people in the context of sound fiscal management.
We work with clients to provide meaningful, appropriate compensation information as they consider the right approach for them. Our team consults the NC Center for Nonprofits and other national resources that track and share salary statistics based on many factors, including a nonprofit’s budget size, geographic area, and current compensation structure. Our goal is to help a client craft the most attractive salary package that is realistic for the nonprofit.
Rationale for a nonprofit organization to broaden its compensation strategy include:
- Paying a premium in salary to executive leaders will often lead to higher fundraising goals, larger overall teams carrying out the work, and stronger outcomes aligned with the goals of the organization.
- Competitive compensation packages may attract seasoned corporate leaders. Having this diversity of experience in the executive leadership team can strengthen the organization and support succession planning, which is important to sustain the organization.
- Experienced executive leadership helps ensure that nonprofits stay focused on fulfilling their mission, serving their clients and constituents, and adapting to changing needs of their community.
- Trends in retention point to the benefits of leadership support through coaching and mentoring, which could become part of an offer package.
Attracting mission-minded, inspiring leaders with a strong business sense and a proven track record requires an investment of both time and resources. Be thoughtful when sitting down to look at future year budgets for your most important asset: your people.