February 6, 2020; Forbes
This may be our week for picking on material hosted on Forbes, because we would like to take issue with a recent opinion piece that’s built on a veritable mountain of half-truths and faulty assumptions. It is also illustrated, apparently without irony, by a photo showing three happy young white guys sharing a deal-making moment. Some of us are not those guys—we don’t feel well represented—but the image is only an indication of things to come.
We do this not so much to pick on the author but to remind everyone to question the facile and often false assertions that dominate some of the writing in and about our sector.
The author, Bill High, argues that too many people who work in the nonprofit sector are being paid too little, and that this is something that merits our attention. Earlier this week, we presented research from various sources that brings this common assumption into question. Findings show our compensation compares favorably to similar positions in the private and public realms. It may be true that nonprofit CEO salaries don’t exceed decent wage ratios as consistently in this sector as in the for-profit sector, but some of us think that’s quite all right.
Ironically, High’s article links in the very first paragraph to one of the pieces of research we cited in our earlier article. In fact, the report from Johns Hopkins states in its executive summary:
Nonprofits are frequently thought to pay lower salaries than are available from private, for-profit businesses…this widespread assumption does not find support in the data. To the contrary, in all but three of the industries in which nonprofits concentrate, they also tend to pay somewhat higher average weekly wages than for-profit enterprises operating in the same fields. This provides further evidence of the value of nonprofits not only as sources of employment, but also as generators of competitive wages.
To be fair, this finding which contradicts his central premise, did not come until page 10, while the information he cites about nonprofits comprising 10 percent of the workforce is in the first paragraph of the first page of the key findings.
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To follow up, High proposes that organizations in the nonprofit sector need outstanding, experienced leadership to navigate the complexities they face these days, and unless we can pay well, we will not be able to attract the right people. To sharpen his point, he cites statistics from a 2015 Bridgespan Group report which found that over a two-year period, 25 percent of nonprofit C-suite level execs had left their jobs, and of those, around 50 percent had cited low salary as among the reasons for leaving the sector.
Then, he advances the assertion that with salaries so low, the sector will not be able to attract seasoned execs from the for-profit world, who are—in his opinion, one supposes— often the very people so desperately needed to lead this sector into the future we all desire. He writes:
The complexity of the nonprofit world calls for seasoned leaders who can navigate those changes. Those leaders are often found in the for-profit sector. However, the switch from the for-profit to the nonprofit sector must be balanced by compensation.
To start, this ignores the corrosive realities of our polarized and extractive economy, but in making this unwarranted leap, High also misses that the very same Bridgespan Group in the same report concludes that recruiting leadership from outside the organization, let alone the sector, is the most costly and time-consuming way of developing leadership. Instead, they suggest, we should be paying attention to developing people from within who can step in smoothly and take the leadership reins without a steep learning curve.
He finishes off with yet one more prescription, which is that nonprofits ought to be more entrepreneurial and look to earned revenue or social enterprises. In recommending this quite blithely, he ignores the common, well-documented barriers and risks associated with starting a business from a nonprofit base.
Are we surprised to see such platitudinous nonsense? Not exactly, but we wish it would change. Some serious pay issues are at play in the nonprofit sector, but they are found more on the front lines than the CEO level and they disproportionately affect women and people of color. It’s time to address this issue in more systematic ways and with a more collective lift. And if you are ignoring the talent within and around your organization and not investing in that talent, that doesn’t suggest good leadership or management practice in this age where development must be a part of the new employment contract. Jeanne Bell explores this more deeply in her article, “Developing Human Capital: Moving from Extraction to Reciprocity in Our Organizational Relationships.”
High does make some good points in his piece. For instance, leading and managing nonprofits requires a sense of comfort with and mastery over complexity. It’s not a job that can be phoned in. We agree, but some of that complexity comes from acknowledging nonprofits are supposed to spread the benefits of their work, and this takes a different ethos and approach.—Ruth McCambridge and Rob Meiksins