What Your Peer Organizations Are Doing About Raises
Knowing what to do about raises is tough. “What if we have a recession?” “But we had a great year.” “But we didn’t address raises last year.” “But our headcount is like a leaky bucket.” So yeah, it’s hard.
While running virtual monthly peer experience sharing groups, I collect a lot of anecdotal information. Sometimes it is worth sharing, so I summarized answers from group members regarding these questions:
- What payroll actions are you doing considering inflationary pressure?
- If any, are you planning an adjustment in the form of permanent raises, or a one-time cost-of-living bonus/payout?
- If you are planning permanent raises, what percent (as a matter of course and independent of merit raises) are you planning on using?
The group members are CEOs of social good organizations as large as $300 million in revenue and as small as $2 million in revenue. Most are in the voluntary health space, with very few in social justice and trade associations. I have noted their legal structure in the summaries. Here’s what they said:
- This single corp did not plan any adjustments because of inflation, but gave unexpected bonuses of 5% of salary in January due to a successful 2021, and then regular cost-of-living increases in March. The question will probably be revisited at the end of the summer, though.
- Because of inflation and because this single corp had an outstanding fiscal year, which ends June 30, it has increased the amount of its merit increases to 4.5% from the normal 3%, though the organization is not adjusting for cost of living/inflation per se.
- This single corp started its 2023 budgeting in July, but does not have enough data to know if any changes may be necessary. It had been using a cost-of-living-adjustment formula and paying for performance, but held at 2.5%.
- A federated, national office is currently discussing a one-time cost-of-living payout to support employees. It would not be permanent, but the organization is also extending work from home until gas prices come down.
- This single corp is taking no action on pay at this time. The nonprofit is planning for 3% merit increases for January, not a cost-of-living adjustment.
- A hybrid organization’s fiscal year 2023 budget had 3.5% merit increases effective this July 1. The responder is recommending that all employees making less than $150,000 get a one-time $1,000 inflation bump, but it is not a raise or bonus. The organization will pick a fixed number, rather than a percentage. Its sole purpose is to offset inflation in basic needs: utilities, food, gasoline and rents. These things, theoretically, make up a more significant portion of a lower income employee versus a higher income. This is above budget. Everyone above $150,000 is on an employee incentive bonus program, and the nonprofit will take care of them via the bonus. This is in the accrued budget already.
- This single corp budgeted a 5% pool for merit this year, which will be awarded based on performance, etc. In other words, the nonprofit is not giving a flat 5% across the board. Some will be more, some less based on performance, calibration, etc. Also, the organization is remote, but there are a very small number of employees that need to commute occasionally to the office. Given gas prices, the nonprofit is working on a way in which it can offset this burden. If everyone were commuting daily, the organization would be factoring in gas prices.
- This single corp is adjusting its annual merit increase to 5% to keep its team on pace with inflation. This is a cost-of-living and merit raise, so it is permanent and comes to about a 5% average raise (some more, some less) across all staff.
- This single corp just did a cost-of-living adjustment for all employees and is analyzing the pay of roles against similar roles in other organizations.
- This federated organization is currently looking at all of its benefits, including increasing PTO days, but has not decided on anything yet.
- For fiscal year 2022, this single corp provided all employees that have been employed longer than one year a 5.9% cost-of-living increase in their salaries. Each year, the organization has provided a cost-of-living adjustment — usually 1.5% to 3%. There are paths for advancement that would result in promotions (typically 6% to 8% increases), but the organization currently doesn’t have a bonus program.
- This single corp provides the flexibility to work from home and attend meetings virtually whenever possible. This has become more important with the increase in gasoline prices. No adjustments are planned at this time. The nonprofit has implemented a hybrid work allowance for all employees to supplement personal mobile devices and internet service costs. Its current budget is for a 3% merit increase.
- This regional single corp gave all our employees a one-off, cost-of-living bonus in March and is considering a yet-to-be-determined percent pay raise to take effect in September of no less than 5%.
- This single corp is in the process of a salary assessment to make adjustments as needed in the upcoming budget.
- After holding on raises at the start of 2021 due to the pandemic, This single corp set its merit target at 4.5% versus its typical 3% for 2022. The organization intends to use the same approach in 2023. It is considering if more than 4.5% is needed in 2023, but won’t finalize until there is a better picture of the full budget and the nonprofit seeks board approval in November. Current discussions focus on permanent raises. This organization also brought all positions to 0.9 of the median compared to the market range at the end of 2021.
Your contribution in comments to the body of knowledge about what other nonprofits are doing regarding compensation would be most appreciated.
Katrina VanHuss has helped national nonprofits raise funds and friends since 1989 when she founded Turnkey. Her client’s successes and her dedication to research have made her a sought-after speaker, presenting at national conferences for Blackbaud, Peer to Peer Professional Forum, Nonprofit PRO, The Need Help Foundation and her clients’ national meetings. The firm’s work is underpinned by the study and application of behavioral economics and social psychology. Turnkey provides project engagements, coaching, counsel and staffing to nonprofits seeking to improve revenue or create new revenue. Her work extends into organizational alignment efforts and executive coaching.
Katrina also regularly shares her wit and business experiences on her and Otis Fulton's NonProfit PRO blog “Peeling the Onion.” When not writing or researching, Katrina likes to make things — furniture from reclaimed wood, new gardens, food with no recipe. Katrina’s favorite Saturday is spent cleaning out the garage, mowing the grass, making something new, all while listening to loud music by now-deceased black women, throwing in a few sets on the weight bench off and on, then collapsing on the couch with her husband Otis to gang-watch new Netflix series whilst drinking sauvignon blanc.
Katrina grew up on a Virginia beef cattle and tobacco farm with her three brothers. She is accordingly skilled in hand to hand combat and witty repartee — skills gained at the expense of her brothers. Katrina’s claim to fame is having made it to the “American Gladiator” Richmond competition as a finalist in her late 20s, progressing in the competition until a strangely large blonde woman knocked her off a pedestal with an oversized pain-inducing Q-tip. Katrina’s mantra for life is “Be nice. Do good. Embrace embarrassment.” Clearly she’s got No. 3 down.