March 7, 2007: Nonprofit Compensation Plans

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Needs of the Group:

-What's typical or normal for compensation within nonprofits

-Specific rules regarding interns

-Budgeting for benefits beyond the health and dental/and implementing additional benefits

-Equitable about pay/incentives and bonus strategies/moral boosting

-New Organization with pay--benchmark and what's appropriate

-Compensation for Contractors

Suggestions:

To determine salaries in the annual budget view a Nonprofit Compensation and Benefits Survey.

Challenges with compensation information being confidential. Would like more transparent models for nonprofit compensation. However don't know laws around being transparent with salary information.

Hard to find a socially responsible investment company to manage 403b. Confusion with differences between 403b, 401k and what fees exist. Two organizations use Simple IRA and match it by 3% but it is limiting and there are challenges with matching over 3%.

Consensus of the group, the general waiting period for health benefits is 30 days. Accrual for vacation and sick start from day one and then employees can use it after 30 days. Some organizations have a 90 day waiting period for benefits.

Vesting schedules for retirement: A Vesting schedule is how long an employee has to work for the organization before they are eligible to leave the organization and take their retirement with them. Discussion around whether or not this provides extra incentive for employees to stick around.

Groups who have retirement accounts for employees have integration between payroll company and retirement account so it is easy for payroll service to forward funds to retirement. Payroll services used by discussion group attendees: ADP, Wells Fargo, Franklin Templeton, Paychex

Other Benefits/Morale Management mentioned by group:

-Life Insurance

-Sabbatical for Educational Interest $700 per employee/Put in budget for staff training

-Work from home on Fridays

-Work hard/play hard flexible work schedule just get the work done not necessarily about the schedule

-Staff lunch at a nice restaurant once a week

Interns and Interns Compensation:

-Stipends for interns based on students transportation and living expenses up to a certain amount

-Summer Fellowship--with nonprofit speakers and training/field trips

-Recruit interns through local colleges and Universities. Then have off-campus work-study programs and can supplement the cost of an intern. It can be helpful to connect with specific departments within Universities to recruit interns.

Resources and Helpful links:

1. Salary Management for Nonprofits—TGCI Grantsmanship Center

2. How to conduct a Salary Survey—TGCI Grantsmanship Center

3. NPT 2006 Salary Survey: “Women Catching up with Men, But Neither With Inflation”

4. Nonprofit Executive Compensation Average Annual Salary by Budget Size of Organization

5. Innovative Compensation Practices in Nonprofit Organizations

6. Employment in American Charities: A Profile (See pages 9 & 10 Nonprofit Wages and Nonprofit Wages Comparison)

7. Nonprofit Salary Reports-National Council of Nonprofit Associations