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NonProfit Times: 2009 Salary & Benefits Survey

NonProfit Times: 2009 Salary & Benefits Survey

Entrepreneur

Amid the stock market meltdown, credit crunch and rising unemployment, 2009 looks like it will be a better year to be an employee rather than a boss, at least according to the latest national NPT Salary & Benefits Survey.

Average salaries for half of the 10 director positions surveyed anticipate a decline in 2009, and those that expect to increase kept pace with the rate of inflation last year (0.1 percent).

Responses for general staff increases varied widely, with some reporting freezes or cuts, but the average pay hike worked out to 2.59 percent. That is down from last year’s 3.42 percent but not bad as charities try to keep layoffs at bay, especially considering that it’s a higher average increase than most of the positions surveyed.

Not only are development directors expected to lead the way in 2009 when it comes to salary increases, it’s among just five positions in this year’s NPT survey that exceeds 2008’s inflation rate. The average salary for a development director is expected to be $72,586, up 4.03 percent from last year’s $69,770. Even when the responses were broken out by type of organization, size and geographic location, development directors for the most part still were leading the pack, with average increases more often on the positive side and sometimes ranging as much as 7 percent.

Of the nine other positions in the survey, director of volunteers was the next highest with a 3.21-percent rise expected, from $41,288 to $42,617. The good news for some director positions might be that their average salaries will increase at all, although few eclipsed 2 percent:

  • Director of human resources, +2.2 percent;
  • Webmaster, +2.18 percent; and,
  • Program director, +2.15 percent.

If there is a silver lining to the data, it might be that while half of the 10 positions will see their average salaries decline, the drop isn’t very pronounced:

  • Chief of director marketing, -0.22 percent;
  • Chief Financial officer, .0.52 percent;
  • Major gifts officer, -0.88 percent;
  • Executive director, -1.07 percent; and,
  • Planned giving officer,-1.56 percent.

Other highlights of this year’s survey include:

  • The only six-figure salaries found in this year’s survey were for executive directors, regardless of region or budget size.
  • Development directors earned an average annual salary this year of at least $70,000 in each geographic region, led by the West at $76,691.
  • By budget size, the highest average salary was among nonprofits with $1 million to $9,999,999 in gross revenue, with $119,432 for executive directors. Each category expects the average to decline. The largest drop at 5.46 percent, is among groups with $10 million to $24,999,999 in revenue.
  • Executive directors at associations will have the highest average salary ($121,093), but last year the highest averages were at foundations ($120,587) and civic/culture organizations ($120,436). Only environment organization directors failed to reach six figures in average annum salary ($97,757) this year.

Some of the largest increases for 2009 are expected to be found at the smallest organizations. Development directors at nonprofits with revenue of $1 million to $9,999,999 (5.76 percent) and less than $500,000 (5.7 percent) reported the highest percentage increase in average salary. Other categories were less than 2 percent or declined only slightly. Likewise, at nonprofits with $500,000 to $999,999 in revenue the greatest percentage increase was reported to be for chief of direct marketing, at 11.59 percent. The pattern for development directors continued among geographic regions, with the lowest average increase of 0.87 percent in the North Central. All other regions eclipsed 3.25 percent, including 6.52 percent in the Southwest, 6.2 percent in the South and 5.29 percent in the Mid-Atlantic.

Program directors also look like they’ll do well in 2009. In each geographic region, the average salary is expected to increase anywhere from almost 2 percent to 4 percent, with a high of 7.13 percent in the Southwest.

Fundraising posts, such as vice president of development or similar director level, and executive directors were most competitive when it came to salary increases, according to Nurys Harrigan, president of Careers In Nonprofits. Everything else was basically maintained at 2007 levels, with no big increases among other positions like program or finance managers.

Careers In Nonprofits is based in Chicago with offices in Washington, D.C., and works with nonprofits in those two cities. Organizations in the nation’s capital are more likely to be headquarters of large nonprofits and don’t seem to be as concerned about hiring as those in Chicago, where there appears to be a slowdown, Harrigan said.

If nonprofits have to replace an employee—particularly in fundraising, accounting or management—they will, Harrigan said, but they won’t be adding staff. Instead, they might hire temps as opposed to bringing on another salary, at least until they “get a better picture of what they can or can’t do in terms of staffing, promotions and increases” she said. Harrigan expects nonprofits to hold off until they see a “more assured second quarter, if things stay steady.”

David Edell, president of DRG Executive Search Consultants in New York City, expects development directors to continue leading the way in terms of salary increases. “I’m sure that trend will continue into this year. If there’s going to be hiring that opens up in the course of this year it will be in development director positions,” he said.

“In these kinds of downturn situations, whether as dramatic as this, the first positions that come back and the ones that people are most concerned about are ones that will help with revenue somehow,” Edell said. “Whether that’s a development director or additional staff to do grant writing or events, generally there’s a tendency to do more investing with fundraising as a first launch back, at least on the administrative side,” he said.

Two recent searches by Alford Group Executive Search in Evanston, Ill., were growth searches in the fundraising area, said Heather Eddy, president and chief operating officer. One fiscally-stable organization was not planning to cut back but invest to have more people to go out and raise funds, she said.

Ira Madin, vice president at Professionals for Nonprofits, echoed a greater emphasis on fundraising positions, and not cutting salaries but coming up with new and increased compensation packages." As always with nonprofits, it leads with finance and fundraising," he said, “either raising or spending money.”

For the first time in recent memory, negative numbers were seen in the survey, asking to compare average staff pay increases in 2008 with increases in the 2009 budget. Though there were highs of 50 percent for 2008 and 17 percent anticipated for 2009, at the other end of the spectrum, some organizations had an average decrease in 2008, with a low of 6.7 percent, and in 2009, a low of 25 percent.

For staff in general, the salary increase policy is based on general increases at 30 percent of the nonprofits while it’s based on merit increases at a quarter of the organizations. Almost 45 percent of respondents said they use a combination of both.

During the past three years, non-exempt pay and exempt pay have increased at about the same rate, according to 61 percent of responses. About 9 percent each said non-exempt pay is increasing faster while another 9 percent said exempt pay is increasing faster. Nearly 20 percent said they don’t know.

Of the portion that said non-exempt pay is increasing faster, the average increase was 6.52 percent, while for those that said exempt pay is rising faster, the average was 7.31 percent. Several organizations cited minimum wage adjustments are affecting the range while another said increases were “due to meeting competitive forces.”

Some nonprofits have frozen salaries, or even taken the step of pay cuts, to avoid laying off staff.

While the United Way of Greater Knoxville’s annual campaign raised $12.8 million last year, 96 percent of its goal and $25,000 more than the previous year, the executive committee recommended keeping funding levels the same in 2009, said Ben Landers, president and CEO. For the first time, the United Way will continue its 2008 fundraising into 2009, to help keep funding at last year’s levels.

Annual reviews will be conducted, but there will be no raises. “While we remain optimistic about reaching our goal in early 2009, we are preparing for a shortfall,” Landers said. Halting salary increases are just part of the planned cutbacks as Landers aims to cut just about anywhere he can to avoid reducing staff. “I think one way to help our nation emerge from this economic crisis is to keep people on the job. This may become difficult in 2009,” he said.

Terri Nelson, executive director of the Fairgrove Family Resource Center in Thomasville, N.C., about 20 miles south of Winston-Salem, slotted 7-percent pay hikes this year for the staff of four, which have gone three years without raises. The 13-year-old nonprofit has two full-time and two part-time employees and there were questions about whether it would even remain open in recent years, said Nelson. Even still, the proposed pay hikes will depend on whether the center continues to receive its grant funding which it relies on for 70 percent of its budget.

On the other side of the coin, The Utica Zoo in Utica, N.Y. was one of the few respondents in the survey that had a healthy increase in the average staff pay, indicating 5 percent anticipated for 2009, up from 3 percent last year. After completing an in-house compensation survey of other zoos in the state, The Utica Zoo found it had a number of positions significantly below industry standards. “This is a first step in a plan to correct and make appropriate adjustments,” said Beth Irons, executive director.