News about the economy and the nonprofit sector usually focuses on:
- decreased revenue (from individuals, foundations, corporations, and investment earnings),
- increased demands for services, and
- organizational decisions to shut-down or merge.
There is a story being left out! The current economic recession has impacted nonprofit organizations’ human resource policies – specifically employee compensation and benefits packages.
- Nonprofits have decreased budgets for pay increases; salaries, then, are not keeping up with inflation and cost of living.
- Increasing health insurance costs have caused nonprofit executives to make tough decisions about employee coverage. Less employees are covered, and, for those who are, their coverage is more limited.
- It is increasingly difficult to offer competitive compensation packages both to attract and retain high-performing staff.
Methodology: The findings come from a national survey of 4,500 nonprofit organizations – covering 2,100,000 employees. (Please note that the data probably includes large-sized organizations that may have “overly” influenced summary findings.)