Are the salaries you’re offering commensurate with the skills and expertise you want to attract?
Recently, I received feedback from several BIPOC leaders that the salaries offered within the nonprofit sector are too low. During a recent discussion about potential candidates and networks to source talent for an Executive Director opportunity with Rhonda Henderson, Surge Institute Fellow, and Partnership for Success Manager at the Achievement Network, she shared that our client’s salary was too low for the folks in her network, “We understand the value behind what we bring to these organizations. We are no longer comfortable just having a seat at the table — we want a voice at the table, and we want a cut of pie that we deserve. It’s our winning season.”
Translation: If you want to attract BIPOC leaders of color, you need to offer market-rate salaries commensurate with their skills and expertise.
Nonprofits must move the needle for equitable pay
We at Good Insight have seen that BIPOC executives are no longer willing to pursue servant leadership at the expense of building wealth. They will take their passion, talent, and skills to an organization that recognizes their value and pays them for what they’re worth. Others have left the sector to build nonprofits and consulting practices when the fight for equitable pay seemed hopeless.
Over the last two years, the nonprofit sector began a long-overdue reckoning with the systematic and institutional racism that kept BIPOC leaders out of positions of power, influence, and higher salary ranges. The percentage of BIPOC leaders holding executive positions within the nonprofit sector has slowly increased in the past few years. In 2019, 87% of nonprofit executives were white compared to 90% in 2016, according to BoardSource.
Through this reckoning, many BIPOC leaders have expressed an awakened sense of self-worth and a deep commitment to building generational wealth. This has led to many BIPOC leaders leaving their current positions for higher-paying jobs despite their longevity at organizations.
Historically, salaries in the nonprofit sector tend to be low for everyone — including white executives. However, people of color face additional barriers when accepting lower-paying positions due to a lack of generational wealth.
White peers are more likely to have a two-person household income which provides the opportunity to accept lower-paying jobs. Whereas, Black families are more likely to have a single source of income, coupled with insurmountable school loans, which creates a much bigger burden for BIPOC leaders that continues to perpetuate the racial wealth gap.
We want nonprofits to pay people more. Period. But we realize that it’s not as easy as snapping a finger; there can be real limits to funding administrative needs and finding the budget to raise salaries. In today’s competitive talent market, if nonprofits want to recruit and retain BIPOC leaders, it is a business imperative to develop strategies for equitable pay and competitive salaries.
Equitable Pay is a Business Imperative
Nonprofit organizations have the power to close the racial wealth gap. This starts with nonprofits having the situational awareness to improve their hiring practices to create a sector where BIPOC leaders can thrive and build generational wealth. If you aren’t willing to offer an equitable salary that matches the current market rate, candidates will take their talents to another organization or build their own, because yesterday’s salaries won’t recruit and retain today’s BIPOC leaders.
Today, the message is clear: BIPOC leaders don’t need pats on the back for a job well done — they need money in their pockets. If you can’t afford a salary increase, get your board to contribute, reevaluate if you need a senior role, make an internal hire, and get creative with compensation packages. As you work to get to equitable pay, here are four ways we’ve worked with clients to address this challenge.
1. Seek Board support to ensure salaries are competitive
Board members play a critical role in helping organizations raise money to recruit and retain top talent. Some best practices for nonprofits involve setting a give-or-get structure where Board members are personally responsible for contributing X amount of dollars. These dollars can be earmarked for salary increases and bonuses, thus creating a vested financial interest in the recruitment and retention of BIPOC leaders.
At Good Insight, we’ve seen Board members use their influence, relationships, and personal funds, to support unrestricted capacity funding by working with local family foundations and corporate donors. Boards that take equity commitments seriously are ambassadors to strengthen and advance the organization’s commitment to equitable pay.
2. Get creative with compensation packages
If you lack the budget, consider a performance pay structure. Aligning the salary with a bonus structure as the organization grows and the leader is meeting his/her performance goals, can be a great tool to create a challenging and rewarding opportunity for the right leader. You may decide to increase pay based on key performance metrics which can be done quarterly or annually.
In addition to this, the salary you offer a candidate should be commensurate with their skills and experience, and match the market rate for the city in which you live. It should not be based on the candidate’s former salary.
Good Insight works closely with clients through the negotiation phase to help them structure offer letters tailored to meet competitive market salaries, a candidate’s expertise, and pay expectations.
3. Make an Internal Hire
Institutional racism creates an opportunity gap for people of color, keeping them out of positions of power. BIPOC employees are often hired into community-facing roles (outreach managers, community engagement coordinators) that aren’t seen as potential for senior management roles or roles that lead to advancement, such as program director.
Promote a committed employee with great potential to advance within your nonprofit and build on their core strengths, institutional knowledge, commitment to the mission, and provide coaching and support in areas of deficiencies. By investing in staff members, this helps boost staff morale and increases retention..
In today’s market, you will risk losing your best talent to other opportunities if they can’t advance in your organization.
Recently, Good Insight recommended a prospective client to ask themselves, “Are we looking internally at BIPOC leaders to fill these roles? Are we giving them equal opportunities to acquire the necessary skills to lead this organization?” As a result of this client’s reflection, a BIPOC leader was promoted from within. Funding that would’ve been used to hire our search firm, was allocated to the staff member’s professional development and salary increase
4. Reevaluate Whether You *Really* Need to Hire a Senior Role
If your organization is not in a position to pay salaries that are commensurate with senior leadership experience, consider if a junior-level hire would do the job. Perhaps you might not need a Program Director, but a Program Manager with the skills necessary to fulfill the job.
Good Insight recommends providing coaching and support to a junior-level professional that can pivot into a senior role in a few years. Perhaps the person lacks the financial experience to manage the organizational budget but is competent and qualified in other areas. Connect the leader with a nonprofit finance consulting firm to support the finance function while also providing finance training. They will benefit from a wage increase that is on par with your budget, and your organization will provide an opportunity for a BIPOC leader to help close the finance skills gap many BIPOC leaders face when applying for senior leadership roles.
Good Insight’s commitment to recruiting BIPOC leaders
Good Insight believes salary transparency is one of the many steps nonprofits can take to advance their diversity, equity, and inclusion (DEI) hiring practices. By providing this level of transparency, organizations can serve as an ally to BIPOC leaders to close the racial wealth gap. This also provides an opportunity to uncover internal hiring biases that may contribute to an organization’s discriminatory practices when hiring and negotiating salaries with BIPOC leaders.
At Good Insight, this means implementing the following practices:
- Comprehensive compensation scans: We conduct thorough research to understand the market rate for executive roles. Based on our research, we suggest low-high end ranges to open up the negotiation process.
- Equitable hiring workshops: Many times, nonprofit leaders aren’t aware of subconscious biases influencing their recruiting processes. We discuss the importance of equitable pay and implicit bias.
- Serving as a mirror to clients and an ally to candidates: Good Insight openly asks clients in our equitable hiring workshop “where are you on your racial equity journey and what are some of your implicit biases” We also ask candidates, “What are your salary ranges for this type of position? Through these conversations, we equip and empower both parties to have candid discourse to break the cycle of servant leadership at the cost of equitable wages.
To learn more about our anti-racist recruiting process and to hire the next leader of your nonprofit, please email us for a consultation.
Isha Haley, Director of Search, joined the Good Insight team in early 2022. Before joining Good Insight, Isha served as the Managing Director and Interim CEO of National Urban Fellows (NUF), a leadership accelerator program for BIPOC professionals.