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February 15, 2008
Nonprofit Salaries on the Rise, Rivaling For Profit Pay
A new study reveals that the average salary for staff positions in nonprofit organizations increased almost 4 percent from 2006 to 2007. The study found that base salaries and total cash compensation offered by nonprofit organizations now rivals pay offered by for profit companies.

The 2007/2008 Not-for-Profit Compensation Survey, conducted by Total Compensation Solutions (TCS), shows that salary adjustments in nonprofit organizations are now about equal to the adjustments made by for profit organizations, as explained in a press release announcing the survey's results.

The study also found a significant change in the way nonprofit organizations pay their employees, noting that nonprofits link pay to individual performance and best practices in the market. TCS notes that this may be a response to increased federal and state regulation of organizations that have tax exempt status.

"Once again, we observe that nonprofits need to pay higher salaries in order to effectively compete for executive and staff positions in a highly competitive market place," Paul Gavejian, Managing Director of TCS, said in a press release. "They also have to link pay to performance or they risk losing good people to the for profit sector."

TCS also reports that nonprofit organizations use generous benefits programs as part of their retention efforts and employees of nonprofits have historically received better health insurance benefits and wellness programs than their counterparts in the for profit sector. However, TCS observes that due to significant cost increases in health benefits, nonprofits have recently become slightly less generous in this regard.

"If this trend continues, nonprofits may lose a competitive advantage that they've enjoyed over the for profit sector," said Gavejian.

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