Nonprofit compensation: the importance of knowing who makes what
One of the difficult decisions members of the boards of directors of Sonoma Valley nonprofits make is how much to compensate their executive directors. And one of the difficult decisions nonprofit executive directors make is how much to compensate the employees who work for them. Currently, the way most Sonoma Valley nonprofit leaders find comparative information on what their peers at other nonprofits are paying their employees is to ask them directly or purchase a report that compares nonprofit salaries in a variety of Northern California counties, with no Sonoma Valley-specific data.
This year, for the first time, there is an opportunity for Sonoma Valley nonprofits to receive a free, customized report showing compensation and benefits paid by Sonoma Valley-specific nonprofits. But the only way to generate this report is for a significant number of Sonoma Valley nonprofit leaders to participate in the 2012 Fair Pay for Northern California Nonprofits Compensation and Benefits Survey. The organization that has produced this annual survey among the 48 counties in Northern California for the past 33 years has agreed to provide a Sonoma Valley-specific summary report if we can get a good response rate from our Sonoma Valley nonprofits. Last week, the co-publisher of the survey, Bob Orser of Nonprofit Compensation Associates, named the Sonoma Valley Presidents Council as a Regional Partner for the survey. (The Sonoma Valley Presidents Council is an informal group, comprised of the presidents of Sonoma Valley nonprofit boards, that meets quarterly to discuss issues of common importance to Sonoma Valley nonprofits. Kimberly Blattner, president of the La Luz board, started the group a year and a half ago and led the group until last week.) According to Bob Orser, as a Regional Partner, the Sonoma Valley Presidents Council will receive “special compensation and benefits reports based entirely on survey results from the Sonoma Valley nonprofit community, if they get enough participants. This data will be distributed by the Sonoma Valley Presidents Council in May free-of-charge to all Sonoma Valley nonprofits.”
According to Bob Nicholas, a member of the Sonoma Valley Presidents Council and president of the board of WillMar Family Grief & Healing Center, “What is the right salary for a particular executive director? What are appropriate fringe benefits? What kind of support staff can maximize her/his effectiveness? To what extent can we protect their time through the judicious use of volunteers? Having Sonoma Valley-specific data regarding these and other questions from the survey will greatly facilitate the work each of us does in our own small circle of giving. Such information will also increase the shared concentric circles of the caring fabric that unites our wonderful community.”
Having a comprehensive Sonoma Valley-specific nonprofit compensation and benefits report will enable Sonoma Valley nonprofits to set fair salaries and benefits to retain the best employees. Access to this level of information is especially important during tough economic times to help ensure that nonprofits are spending their philanthropic dollars wisely. By knowing what other nonprofits in our own local economic market are paying their employees, Sonoma Valley nonprofit leaders will be able to accurately budget for the cost of adding new staff members. Annie Bacon, executive director of Seeds of Learning said, “The survey has proved to be very useful as one of the tools that our board uses to assess the compensation of the executive director. Having the ability to compare nonprofits across size, employees supervised, area of work, type of work, and other factors has been very helpful for us to know how we compare to other nonprofits. It would be wonderful if the categories were even more specific to reflect the compensation practices of the Sonoma Valley nonprofits.”
The survey can also be very useful to provide documentation that the Internal Revenue Service now requires for identifying the processes a nonprofit organization uses to determine executive compensation levels, one of which is comparability data. Cynthia Scarborough, executive director of Vintage House, commented, “The survey results provide a useful tool for nonprofits, not only in conducting our IRS-mandated due diligence review of executive compensation, but also in reviewing compensation of other staff and in planning for staff development and growth. The information the survey collects is provided in aggregate form with multiple variables, allowing any organization to look at its compensation relative to others of like budget size, number of employees, field of endeavor, and geographic area. I’m hoping more local nonprofits will take part in the 2012 survey so that we can access data for Sonoma Valley specifically. Currently, the smallest geographic survey report grouping available to us is for Napa/Solano/Sonoma counties combined.”
The survey should be completed by the highest level paid staff member of a nonprofit organization and will take less than an hour. According to Richard Dale, executive director of the Sonoma Ecology Center, “The process is straightforward, though you’ll need access to your organization’s payroll information, or help from an administrative or finance assistant, to pull the information together. It took me about 45 minutes the first time, and each time it becomes easier. The more of us who do this, the better the information is for all of us!”
The Boys & Girls Clubs of Sonoma Valley participated in the 2011 Fair Pay for Northern California Nonprofits survey. Dave Pier, executive director of that organization said, “Combined with the Boys & Girls Clubs of America salary benchmarks, we use this survey data to inform decisions about our employee salaries. It is incredibly helpful to have this kind of data as a starting point for human resource discussions and for our organization to know where we stand regarding our strategic goal of providing competitive compensation for all of our staff. I encourage other organizations to participate in the survey.”
Nonprofit leaders can access the 2012 survey until March 26 by going on-line to nonprofitcomp.com. The more responses received from Sonoma Valley, the greater the likelihood that the survey publishers will produce a Sonoma Valley-specific compensation and benefits report, a useful planning tool for all Sonoma Valley nonprofits.
Dr. B.J. Bischoff is the owner of Bischoff Performance Improvement Consulting, a Sonoma firm specializing in building the capacity of nonprofit organizations and public sector agencies to better serve their stakeholders. She assists her clients with strategic planning, organizational and personnel performance improvement, fund development, and community relations. She is President of Impact100 Sonoma and leads the Sonoma Valley Presidents Council. She serves on the Sonoma Upstream Investments Portfolio Review Committee as an appointee of the Sonoma County Board of Supervisors. She can be contacted at email@example.com.