The topic of salaries in not for profit organisations is a sensitive one. To a certain extent, we’ve shot ourselves in the foot with some of our messaging about ‘every cent you donate’ going to the cause, creating an expectation that employees in the not for profit sector should work for the love of it, rather than drawing a market wage.

The truth of it is that we are dealing with some of society’s most complex issues and it takes skill, experience, perseverance and long hours to lead and manage organisations that deliver social impact, meet stakeholder expectations and generate sufficient profit to keep your organisation afloat, and to invest in the necessities of new technologies and innovations. The move to consumer-directed care models in aged and disability services has pushed the sector further towards commercial business models, broadening the range of skills and experience needed to operate effectively.

Those of us working in the sector are all too aware that frontline community service workers are undervalued and this is reflected in low wages. This issue has found public attention with the publication of the Aged Care Royal Commission interim report. One witness is quoted as saying:

“If the pay of people doing the important and challenging work of caring for the most vulnerable people in society…is less than someone serving hamburgers…what does that say about our society?”

The Commission identified that:

“Given the low pay and limited career opportunities available, it is not surprising that staff leave the sector because of dissatisfaction with remuneration, income insecurity, and excessive and stressful work demands. Aged care workers are consistently less well remunerated than their counterparts in related sectors.”

Whilst the wages of employees providing direct care services are generally controlled by the relevant award, employers have more flexibility – in theory at least – to set an appropriate salary for management and corporate staff. Affordability is, inevitably, a key factor in determining pay scales, but we still place cultural restraints on not for profit expenses, including executive and other staff salaries, in our expectations that everything should be low budget. This practice is short-sighted in denying not for profits access to the best people and contemporary business practices used in the corporate world. American author and fundraiser Dan Pallotta has spoken forcefully about this issue in his Ted Talk The way we think about charity is dead wrong and his book Uncharitable – How Restraints on Nonprofits Undermine their Potential. Pallotta’s argument reaches beyond executive remuneration to consider broader attitudes to spending in areas such as fundraising and marketing. No one wants not for profits to be mindlessly wasteful, but self-imposed frugality risks short changing not only our employees – but the very communities we exist to serve.

For those of us looking to recruit, or sense check salaries, in the Australian not for profit sector, Pro Bono Australia’s annual salary survey provides a useful point of reference. With data presented across key organisational roles and functions, and by state, type and size of organisation, you’re likely to find some useful data to help you to determine how your salaries sit in the market. As with all reports of this nature, the outputs become more useful the more people complete the survey. Data collection for the 2020 survey is now open and we do encourage you and your colleagues to complete the survey here.

Making the budget work is a perennial challenge for not for profits. For most of us, salaries will always be constrained by financial realities, but we need to be able to recruit and retain skilled staff in order to deliver against mission. And, as advocates for social justice, we have an ethical responsibility to pay a fair wage.

For Public Benevolent Institutions and Health Promotion Charities, salary packaging allows you to offer higher take-home pay to employees at no additional cost to the employer. In our recent customer survey, results showed that 79% said that salary packaging influenced their decision to accept their current role, whilst 85% said that it influenced their decision to stay with their current employer.

If you’d like to find out more about salary packaging and whether or not your organisation is eligible, get in touch with our team on 1300 763 505 or email [email protected].