Pay in Nonprofits

In the US, April 21-April 27 is National Volunteer Week, a time to recognize all those who work without pay to support important missions or causes championed by nonprofits. Many of the issues that come up when designing pay systems in for-profits (strategy, internal equity, performance, motivation, fairness, transparency, etc.) are as important to consider in nonprofits as they are in for-profits. But some of the facts and issues differ. Using a sample of data from the 2000 US Census of Population about approximately 3 million people between the ages of 16 and 65 who worked full year and full time, the author finds that those working in nonprofits are paid less than in other areas. The data show that overall annual earnings for those working in nonprofits averaged about $42,000. The pay for those in the for-profit sector was, on average, a few thousand dollars per year more