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Crystal here! When I first started my nonprofit career in 2010, this was almost always the first question my family and friends would ask me. Looking back on things now, I don’t have ANY family members who do similar work, so I understand their confusion.
I had just finished my undergrad at UC Santa Barbara (Go Gauchos!) and I found myself back home pondering life (haven’t we all been there?) I couldn’t snag a full-time job right away, so I started tutoring part-time. Tutoring actually opened my eyes to what my future could be. I wasn’t exactly sure what my career path would look like, but I knew I wanted to give back. Fast forward a few months and I finally landed a real-world job as a Case Manager for at-risk teens in Riverside County. IT. WAS. SO HARD. I don’t mean lifting heavy stuff hard, I mean listening to heavy stuff hard. I lasted 11 months, but that experience prepared me for the rest of my life. I quickly learned that you can’t change those who aren’t ready to change. I had to learn to not bring work home. I knew I wanted to stay in the nonprofit sector, but doing important behind-the-scenes work.
My family and friends somewhat understood my role as a Case Manager – many thought I was a social worker (kind of, but not so much) From there I went on to really dive into the nonprofit sector and accepted a position as the Community Relations Manager for the YWCA Pasadena-Foothill Valley. Now this is where the infamous “how do you get paid?” questions really started flooding in. At that point I was still new to the nonprofit sector and I didn’t really know how to respond, I just knew I had a job and I thought it was easy enough to understand that people get paid to work. I was a fundraiser-special events planner-marketer-graphic designer-web developer-community engager… I wore MANY hats! We were a small but mighty team and it was in this role that I got to take on various responsibilities to really learn my nonprofit strengths.
I share this because it’s perfectly fine and normal for nonprofit staff members to get paid. We need committed, passionate folks if we want to make real change. Volunteers are SO important, but we need to pay staff what they’re worth in order to really drive change.
Here’s some helpful information to guide your conversation should the “How do you get paid?” question ever come up. What’s nonprofit overhead anyway? Unfortunately, there is no right answer. Overhead can mean different things to different people, but it typically includes the following: indirect costs, administrative costs, shared costs, and fixed costs. On the 990 tax form this will be calculated by combining Management & General Expenses + Fundraising Expenses.
Technically, there is no maximum overhead rate for nonprofits. But that doesn’t mean an agency can have a 99% overhead rate and go long without getting into trouble. A handful of watchdog groups help keep nonprofits accountable, and publicly share their ratings and reasoning behind said rating. Charity Navigator, for example, sets a goal of “less than 10%” overhead, which I think is a little difficult to achieve if you really want the right people at your table. The Charities Review Council and Better Business Bureau recommend no more than 35% overhead. Staying below 30% is average and generally accepted by public opinion. Around the holidays (and randomly throughout the year) you’ll see a lot of posts going around social media about how much large-scale nonprofit executives get paid. While, sure, there are some situations where funds are possibly being misused with too high of a % on salaries, this is a great opportunity to educate your friends and family on some overhead rules. Is a $300,000 salary high? Sure. But if you’re responsible for managing a MULTI-MILLION DOLLAR organization that impacts MILLIONS of lives, it’s pretty understandable.
Stay tuned as I’ll dive further into this discussion down the road. If you’re a nonprofit professional, please share your feedback on the overhead discussion! I’d love to hear what questions you’ve received regarding this, and if you’ve ever had anyone ask how you get paid. Not in nonprofit and skeptical about how these organizations work? Ask a question below and share your experiences with the nonprofit sector!
Be good. Do good.