Why must nonprofits pay a fair compensation?

Is it unfair to expect nonprofit organisations to pay fair wages? The popular notion or the traditional mindset, conditioned over the years, is still the same. To put it simply what many nonprofits want is “cheap and best”. Nonprofits are considered as organisations that care for people and the environment. The irony for most, they don’t care about their own employees.

It’s neither selflessness nor prudence to pay less wages to passionate nonprofit employees. It’s a poor belief system. 

Why does one expect unfairly low compensation to ever produce great results? A research on the science of greed concluded that less money affects performance. Social Psychologist, Paul Pioff had this to say, “As a person’s levels of wealth increase, their feelings of compassion and empathy go down, and their feelings of entitlement, of deservingness, and their ideology of self-interest increases,”.

Dan Palotta, in his TED talk, spoke about the unfair system of compensation in the world of nonprofits.

He says, “So in the for-profit sector, the more value you produce, the more money you can make. But we don’t like nonprofits to use money to incentivize people to produce more in social service. We have a visceral reaction to the idea that anyone would make very much money helping other people. Interestingly, we don’t have a visceral reaction to the notion that people would make a lot of money not helping other people. You know, you want to make 50 million dollars selling violent video games to kids, go for it. We’ll put you on the cover of Wired magazine. But you want to make half a million dollars trying to cure kids of malaria, and you’re considered a parasite yourself.”

Who is responsible for these meagre wages in nonprofits?

Most Donors do not want their funds to go into salaries. Donors must focus on seeing best outcomes and not worry about where the money is being spent. When Donors begin to dictate how the money is spent, it’s no longer the nonprofit leader who is leading. The insight on how better outcomes can be achieved is really visible to the nonprofit leader-manager who is on-ground.

Nonprofits on the other hand, offer less wages to save costs leading to higher attrition. Employees who need the income, end up becoming mentally and emotionally damaged to perform their best. This is not at all favourable for the nonprofit or a donors investment.

Low, unfair wages are costly for the nonprofit. It’s not about paying a high salary, it is about creating a culture that accommodates a decent pay and a workplace for employees that truly focuses on giving their best.

1 Timothy 5:18 in the general context is clear; a labourer is worthy of his wages.


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