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Many Nonprofit Salaries Are Going Public Thanks to New Laws and the Job Market. The Consequences Could Be Big

By  Drew Lindsay | The Chronicle of Philanthropy

DECEMBER 12, 2022

An International Rescue Committee vice president for global solutions will make as much as $265,000 a year. At Colorado Public Radio, a major-gifts officer starts at $80,500. And a lifeguard at the YMCA in Hollywood, Calif.? Pay tops out at $16.54 an hour.

These peeks into paychecks — which come courtesy of recent job advertisements that feature salary information — are a sign of a glasnost in the traditionally opaque world of compensation. Discussion of pay, once a taboo topic reserved for board rooms and water-cooler gossip, is moving into polite society — or being dragged there, in some instances.

New York City began to require salary ranges in job advertisements in November. California and Washington State will follow suit in January, and New York State’s legislature has passed similar legislation that’s awaiting the governor’s signature.

California and New York City alone — home to roughly 200,000 nonprofits combined, including many with employees around the country and the globe — may represent a tipping point for the pay-transparency movement, compensation experts say. Colorado enacted the first such law in 2021.

Apart from legal mandates, nonprofits are feeling a host of other pressures to change. These include growing equity concerns, a push for transparency by young employees, and agitation by activists and unions.

Experts say it’s not long before publishing salaries in job advertisements is the norm. “It’s something that candidates are now expecting,” says Mary Plum, a senior consultant with the Development Guild, an executive search and consulting firm for nonprofits. Plum has found job candidates who won’t consider positions unless the salary range is available. “Whether or not you are legally bound to do it, there’s a lot of pressure from the marketplace.”

Since the pandemic, nonprofit workers increasingly assess the values of a nonprofit and are grateful to find groups that are upfront about pay, Plum says. “It’s showing trust, honesty, respect — all of that. I’ve had people thank the organization for sharing the information.”

The seemingly simple act of telling job applicants what salary to expect has cascading effects. Publishing salaries in job ads can raise awkward questions about pay equity and fairness, particularly within an organization where salaries may be lagging market rates. Simply put: Staff will compare salary ranges listed in ads to what they earn and ask about differences.

Anticipating those questions, groups often do extensive behind-the-scenes work to refresh compensation structures so that salaries reflect the market and are consistent across the organization. This can include standardizing job titles across departments, conducting or paying for market analysis of compensation, and creating a salary for every position.

All this is best practice for employers but hard to do for nonprofits pressed for money and time, particularly small groups, says Jenn Wendus, a senior consultant with SmithPilot compensation consultants. New laws, however, “can really move that priority up the list of what’s strategically important.”

“This is changing everything,” says Scott Smith, who has logged more than 40 years in the nonprofit field as an executive and now as managing partner of the Colorado-based Stonehill Consulting. “But that’s a good thing.”

Nonprofits leaders agree that the changes are for the better, but at least a few organizations are paying lip service to transparency by defining salary ranges so broadly as to be useless. “I have seen one organization post a salary range of $0 to $200,000,” says Lisa McKeown, a compensation expert with Nonprofit HR. “That says you’re really not taking this seriously.”

‘Salary Secrecy’

The movement for pay transparency dates at least to the mid-2010s, when states and localities began to ban employers from inquiring about a job candidate’s salary history. Such a prohibition, now law in at least 21 states, aims to stop low-ball, below-market offers to the underpaid, particularly women and people of color whose pay has been hurt by discrimination.

Equity advocates also championed including salary information in job ads as a means of correcting pay disparities. A #ShowtheSalary campaign calls out groups on social media that advertise without pay details, and Vu Le, a former Washington State nonprofit executive who writes the popular blog Nonprofit AF, denounces “salary secrecy” there and on Twitter.

Job-placement boards increasingly require salary ranges, and human-resources professionals now espouse publishing salary ranges in job ads. “It’s become a preferred practice prior to becoming a legal requirement,” says Laura Pierce, executive director of the Nonprofit Association of Washington.

Nonprofit unions also are negotiating for pay transparency in contracts. “This has been a bargaining priority for us, and it’s something we’ve had to fight with employers over for some time,” says Hayley Brown, president of the Nonprofit Professional Employees Union, whose members are largely in the Washington, D.C., area. “Sometimes there’s this ethos that because you care about the mission, you shouldn’t care about the pay.”

Some nonprofits say they moved to include pay rates in job advertisements before pay transparency became a hot issue. “We learned many years ago that we needed to put in a salary range because we did not want candidates who were super overqualified and expected a lot of money,” says Diane Vella, director of finance for Trees, Water & People in Fort Collins, Colo. “We don’t want to waste people’s time.”

The International Rescue Committee, which is based in New York City, began publishing salaries in job ads only with the start of the new law. But officials say it has been focused on pay transparency for some time, in part because its work force, which skews heavily to millennials and members of Generation Z, wanted it. “We listened to our staff and have welcomed the push all along the way,” says Rena Kokalari, senior director of human resources.

Among other things, the organization developed guidelines and a compensation philosophy that it will pay employees generally around what its research shows is the market median for a position. It shares that with employees — including through “Demystifying Compensation” and “Compensation 101” videos — and posts salary ranges for all but the most senior positions on an internal network. Because IRC staff can request to work remotely anywhere in the country, the group built a do-it-yourself calculator so employees can calculate the likely salary adjustment for a relocation.

These changes have helped the organization create a culture that the organization believes will help it attract and retain candidates. “The bar of honesty and openness is raised for all,” Kokalari says.

IRC didn’t move to include salaries in job ads until required by New York’s new law because it focused so much time and energy on the internal work. “This is not a simple endeavor,” Kokalari says. “To us, making sure that people are paid fairly and equitably is the most important thing.”

The organization plans to include salaries with all its positions nationally by the end of 2023, she adds, and it aims to do so internationally beyond that. “We’ll get there.”

Several big Seattle-based nonprofit employers appear to be keeping salaries under wraps until the new law takes effect in January, including the Fred Hutchinson Cancer Center and the Bill & Melinda Gates Foundation. “We’ve been working toward this practice of publishing salary ranges for some time,” says Karin Neighorn, a spokeswoman for the Gates Foundation, noting that the organization believes in research indicating such information can close racial and gender pay gaps.

The 1,700-employee Gates Foundation will publish ranges in new advertisements for U.S. positions — not just those in Washington State — beginning in January, when the new law takes effect, Neighorn says. The Hutchinson center, which has some 6,000 employees, will do the same, according to a representative.

Gates will also look at “expanding this practice” in other countries where the foundation operates, Neighorn added.

In California, state nonprofit officials say there hasn’t been much discussion about the new law. And several name-brand nonprofits continue to post jobs without salary ranges, among them Goodwill of Southern California, Planned Parenthood of Los Angeles, the San Diego Museum of Art, Stanford, and the University of California, Berkeley.

Two years after Colorado enacted its law, some groups still are not posting salaries, according to Smith of Stonehill Consulting. “There was a lot of PR when it was first enacted, but it has dropped off everybody’s radar.”

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