The Compensation Report: An Analysis of Maine Nonprofits 2012

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Griffin McLaughlin
8 years ago
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1 The Compensation Report: An Analysis of Maine Nonprofits Reviewed by Michael Daily, Executive Director Overall Were the respondents similar to those in previous years? If we see differences in the results can we say with confidence that there is a trend? The most important factor is budget size. There is a big shift, as smaller nonprofits in the under $250K budget size are underrepresented, while the larger budget categories of $500K-$1M and $1M- $5M are overrepresented compared to Budget Size Under $250K 30% 14.5% $250K-$500K 17% 16.9% $500K-$1M 16% 22.7% $1M-$5M 23% 32.9% $5M-$10M 7% 6.3% Over $10M 8% 6.8% 101% 100.1% Does this make a difference? We would expect that benefits for 2012 would be more complete, since nonprofits below $250K are the ones who are more likely to not offer benefits. It should not affect the salaries, which are reported by budget size. It might affect an overall average for, say, Executive Directors which includes all budget sizes. Actually, the average ED was $79,488 in 2012, a very modest increase over $78,270 in The reporting of Overall Budget and Salary Budget from 2011 to 2012 shows a mixed picture. In a healthy economy, most nonprofits would show an increase in budget size and salary budget as they work to meet increasing community needs. This is what we found: Increased Same/Not Decreased

If we see differences in the results can we say with confidence that there is a trend? The most important factor is budget size.

2 Reported Overall Budget 46.4% 34.3% 19.3% Salary Budget 57.0% 30.4% 12.6% This would suggest that 1 in 5 nonprofits are struggling with lower revenue, while a larger number are hiring and giving raises. 14.5% reported an increased salary budget of more than 10%. This would appear to be nonprofits that are both hiring and giving raises. 3.9% expected a decrease in salary budget of more than 10%, which would imply a severe cut or more likely a layoff. Overall this is more positive than negative, but still not reflecting a health situation. The 2012 Nonprofit Finance Fund State of the Sector Report indicated that 32% of respondents in Maine expected to hire new staff in the next 12 months, while 9% expected to reduce staff, so again a mixed picture tilted to the positive. Benefits Beginning in 2008, there has been a deterioration in the benefits offered by nonprofits, with most of this being in the smaller budget sizes. For example: Do not offer Health Care 16% 26% 10% Pension 39% 49% 30% Does this reflect a turn in the tide in cutting benefits? In fact it does. About half of the improvement is due to the fewer small nonprofits which are less likely to offer benefits, but the remainder is a genuine increase in the proportion of nonprofits in the survey offering these benefits. Bonuses We were surprised to see that around 15% of respondents offered bonuses, regardless of size. Most likely this is a sign of nonprofits coping with the salary freezes wanting to reward employees, but not build it into the permanent cost structure. Raises

This would appear to be nonprofits that are both hiring and giving raises. 3.9% expected a decrease in salary budget of more than 10%, which would imply a severe cut or more likely a layoff.

3 Overall raises are what we would expect in the range of cost of living inflation. 53% of respondents did cost of living increase only. This was probably an effort to keep the total salary budget down, and not make any hard choices (on larger raises for some, and limited or no raises for others) when their organization was recovering from the recession. We and most practitioners, recommend raises based on Cost of Living, Merit, and where the individual is relative to the market value of the job. Merit/Performance & Cost of Living were the criteria for 14% of nonprofits, while adding longevity gets another 5%. Our conclusion: most nonprofits did not have a sophisticated salary administration system and relied on cost of living which worked out to 2.86% for the survey respondents. The more factors the organization considered, the higher the raises. Those that considered 3 factors gave 6.92% raises. For those who used Merit/Performance & Cost of Living, the range of raises was from 7.65%, for top performers in upper management to.13% for below average performers in Mid-Management. Salaries Maine s unemployment rate fell from 8.2% in May of 2010 to 7.4% in May of 2012 (Seasonally Adjusted). While this is an improvement, at 7.4%, the high unemployment level is not particularly favorable for raises. The raise data in the report, anecdotal information, and inflation suggest that salary levels should have increased in the 5% to 6% range over the two years from the last survey in What actually happened was that salaries, on average, barely budged. An index of 21 jobs was down just.3% compared with inflation of 3.6% over the two years. Top increases were PR/Communication Directors up 11.1%, HR Directors up 7.2% and Property Managers up 5.2%. The PR/communications Directors salaries may reflect the increasing importance placed on marketing and the shift to larger nonprofits. The HR Director s increase reflects higher salaries in the budget categories above $5,000,000. Top decreases were for Child Day Care Teacher down 11.4% and Certified Nursing Assistant down 10.1%. This may well represent more employers in the

from the recession. We and most practitioners, recommend raises based on Cost of Living, Merit, and where the individual is relative to the market value of the job.

4 $500,000 to $5,000,000 who are actually paying less than some smaller employers. We compiled an index of 14 non management positions. Compared with 2010, salaries dropped by.8%. Similarly, we did an index of 7 management positions. Management fared better than the workers with an increase of 2.9%, but some if not all of this is the bias to larger nonprofits. Executive Directors salaries increased 1.6% on average. Here is a graph comparing 2010 and Most of the increase is in the $500,000 to $10,000,000 Budget Sizes. Some would argue that Program Directors are the ones that make things happen in the nonprofit sector, so how did they fare?

9%, but some if not all of this is the bias to larger nonprofits. Executive Directors salaries increased 1.6% on average. Here is a graph comparing 2010 and 2012.

5 Overall their salaries fell by 2.8% with much of the reduction coming from larger nonprofits. Summary It appears that the slide in benefits that began with the great recession has come to a halt and benefits may be on the rise. For salaries, there was little change while inflation increased by 3.6%. An increase in the mix of participants to larger nonprofits put some upward pressure on management salaries, while reductions in salaries at both key service providers and some management positions at larger nonprofits put downward pressure on the overall average salary level. For other ESC articles, go to

For salaries, there was little change while inflation increased by 3.6%.

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