Nonprofit Pay Increases Reflect Economic Conditions, Shows New Study by Total Compensation Solutions
Armonk, NY (PRWEB) January 23, 2009 — Reflecting economic conditions in the marketplace, the average salary adjustment for staff positions in nonprofit organizations decreased marginally from 4.0% to 3.8% between 2007 and 2008. However, this may not account for the significant downturn in the U.S. economy from September through December of 2008. According to a new study released by Total Compensation Solutions (TCS), financial conditions in the economy are reflected in the level of charitable contributions received by nonprofit charitable organizations and this, in turn, may impact the salary budgets for those organizations. This suggests that nonprofits may need to take decisive action in either cutting back staff or reducing the salary budgets for the upcoming year.
The 2008/2009 Not-for-Profit Compensation Survey, conducted by TCS, compiles data on 73 unique positions found in over 530 nonprofit organizations. In previous surveys, we observed that nonprofits were changing the way they pay their employees. Specifically, we observed an increase in the number of organizations that were using formal bonus/incentive compensation plans for their staff. For 2008, we presume that these same organizations will either pay significantly lower bonuses or suspend bonus payments altogether. We believe that this is a reaction to declining economic conditions throughout the economy.
This year's study of compensation among nonprofits reports average pay levels for executives in mission critical and support departments among these organizations. An overall summary of the average total compensation for executive positions is attached to this press release
The study observes that salary adjustments for 2008, turnover, bonus/incentive amounts were all tracking the practices of for profit companies for most of the year. However, the study identifies compensation practices for the first part of 2008 and does not account for moderate changes in revenue stream, charitable contributions, and prospective planning for 2009 which may be changing even as this document goes to press. "If you could break out the first six months of 2008, nonprofits had a pretty good year," says Paul Gavejian, Managing Director of TCS. "Our clients in the nonprofit sector were on track for record contributions, their revenue generating divisions were making money; and their employees were providing excellent response to their governing communities…then the financial crisis hit the economy and everything changed."