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The Forbes Funds Soundings Breakfast Session on the Wage and Compensation of the Nonprofit Sector 6.19.12
 

The Forbes Funds Soundings Breakfast Session on the Wage and Compensation of the Nonprofit Sector 6.19.12

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The Forbes Funds launched its first volume of the Soundings Report – a flash report that provides timely information, measures the “pulse” of the nonprofit sector, and provides quick and ...

The Forbes Funds launched its first volume of the Soundings Report – a flash report that provides timely information, measures the “pulse” of the nonprofit sector, and provides quick and efficient data points to tell the story of a particular issue. This first issue looks at the Wage and Compensation of the Nonprofit Sector. In this study, we sought to answer a few questions: 1) are nonprofits contributing to the issue of escalating poverty by providing low wages with limited benefits; 2) are nonprofit employees able to retire with the type of wages and benefits they are receiving; and 3) are nonprofits still able to provide competitive compensation packages given the escalating cost of health care. Of the human services and community development organizations surveyed in this report, we found that over 50% of their employees are paid at or below 300% of the poverty level. On the positive note, 76% of agencies provide retirement benefits and 88% provide health coverage of some sort. What does this mean for your workplace and for the nonprofit community?

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    The Forbes Funds Soundings Breakfast Session on the Wage and Compensation of the Nonprofit Sector 6.19.12 The Forbes Funds Soundings Breakfast Session on the Wage and Compensation of the Nonprofit Sector 6.19.12 Presentation Transcript

    • Soundings V1 Breakfast BriefingWage and Compensation of the Nonprofit Sector June 19, 2012 8:30am – 10:30am The Forbes Funds
    • Advisory Group We want thank the following leaders for providing insights into the Soundings surveyBarbara Conniff, Milestone Centers, Inc. Brian Schreiber, Jewish Community Center of Greater PittsburghDon Goughler, Family Services of Western PA Fred Massey, Familylinks, IncJeff Dorsey, Union Project Jesse McLean, Every Child Inc.Myrna Zelenitz, East End Cooperative Ministry Peggy Outon, Bayer Center for Nonprofit ManagementRick Baird, Adagio Health Rosa Davis, POWERStefani Pashman, Three Rivers Workforce Investment Susan Rauscher, Catholic CharitiesBoardTara Marks, formerly with Just Harvest
    • Soundings Leadership Group 200 Organizations from the 10-county regioncommitted to completing 4 surveys a year. ForSoundings 1, we received a 57% response rate. Budget size Key Revenue Sources Government 4% $1 million or less 6% Earned Revenue 6% $1 million to $4 million 7% Foundation 43% $4 million to $10 Individual million 14% Contributions $10 million or more Fundraisers 20% Other
    • Objective is to answer 3 questions1. Are nonprofits contributing to the issue of escalating poverty by providing low wages with limited benefits?2. Are nonprofit employees able to retire with the type of wages and benefits they are receiving?3. Are nonprofits still able to provide competitive compensation packages given the escalating cost of health care?
    • Are nonprofits contributing to the issue of escalating poverty by providing low wages with limited benefits?Based on a total of 7,121 full time employees across the organizations surveyed, below is the percentage ofemployees in each salary bracket by organizational budget size. Annual Salary $1 million or $1 million to $4 $4 million to More than $10 Overall less million $10 million million Less than 11.5% 6.8% 2.7% 8.5% 8.5% $10,890 $10,891 - 17.7% 17.6% 12.1% 11.7% 16.2% $21,780 $21,781 - 24.2% 25.9% 39.9% 33.3% 27.8% $32,670 More than 46.6% 49.7% 45.2% 46.5% 47.4% $32,670
    • Are nonprofit employees able to retire with the type of wages and benefits they are receiving? $1 million or $1 million to $4 million to More than Overall less $4 million $10 million $10 million% that offer a plan 51.10% 89.20% 100% 100% 76.10%Mean % employer contribution 3.30% 4.80% 3.80% 4.70% 4.20%% that require an employee 26.10% 18.20% 23.10% 46.70% 26.20%contribution% with no plans to reduce, 77.30% 80.60% 72.70% 87.50% 80.00%suspend, or eliminate match% with 75% of more employees 90.90% 80.00% 37.50% 54.50% 68.80%deferring enough for maximumemployer match% with a defined benefit plan 37.50% 30.50% 38.50% 50.00% 37.20%
    • Are nonprofits still able to provide competitive compensation packages given the escalating cost of health care?Average annual percentage increase in health care insurance rates by budget size.2018161412 200910 2010 8 2011 6 4 2 0 $1M or less $1M - $4M $4M - $10M > $10M OVERALL
    • Ways that nonprofits have responded to rising cost of health care Methods $1 million or $1 million to $4 million to More than Overall less $4 million $10 million $10 million% that increased 35.30% 51.40% 76.90% 75.00% 53.10%employee contribution% that decreased 20.60% 17.10% 23.10% 0.00% 16.30%benefits% that implemented 8.80% 14.30% 30.80% 62.50% 22.40%prevention programs% that used other ways in 29.40% 34.30% 38.50% 43.80% 34.70%response to rising cost ofhealth care
    • Discussion Questions• What surprises you?• What else would you like to know?• What are some policy implications?• How can we make good use of this data?
    • Themes from the Discussion• Education – Employees (value of benefits, be smarter with use of benefits) – Boards (provide wage and benefits presentation and also ask what their roles are in addressing this issue) – Foundation (understand cost for services and implications of this data)• Research – Benchmark against local for-profits sector (talent & contracts) – Get clear about who are our competitors – Look at connection between HR expertise and benefit costs and see if any correlations exist – Create more progressive work places – Split view of staff and executive staff increases – Who’s paying below poverty rate and what are those positions (compare to Pittsburgh living wage)• Policy/Advocacy – Economic generation of the sector • Create a template for individual organizations to map out their economic impact • Communicate the role between government and nonprofits • Push back on insufficient fees - 50 cents to the dollar issue • Supporting indirect and operating costs – Clearly lay out the difference between delivery of service by nonprofits versus for-profits• Action – Create an advisory group to research and monitor wage and benefits – Explore pooled health care plan options, including the cafeteria model – Understand alternatives people are using with regards to retirement benefits
    • THANK YOU