Jobs in the nonprofit sector are growing at a faster rate than jobs in the business sector. But this might not even be the big news. The big news is that the difference between the nonprofit sector and the business sector is shrinking, according to nonprofit veteran Seth Rosen who blogs at technovist.com.

“As the nonprofit sector professionalizes and the most successful for-profits recruit people with a drive to do something that includes a real public benefit, the culture of the sectors will look more alike. In twenty years the difference between nonprofits and for-profits may simply be their IRS classification.”

One of the biggest issues Generation X and Generation Y have is that they want to have impact. Nonprofit giving among Gen X, for example, has become very grassroots, as Gen X wants to be able to see clearly what change they are helping to instigate. And Gen Y has made it clear that working at a company where they don’t understand how they fit is absolutely untenable – they want to make a difference. Everyone wants to know how they make a difference – whether it’s for-profit or not-for-profit.

In the old model of nonprofits, individuals are removed from the bottom line in a way that undermines the meaning of their work. Take Andrew Broderick, for example. He used to do fund-raising for hospitals. For him, the worst part of working at a nonprofit was how far removed the compensation system was from the bottom line. “I could raise $35 million or I could raise $1 dollar and I’d earn the same amount of salary.”

Recently, he switched to a sales position at Royale Printing, a short- to medium-run printing company in Madison, Wis., where his compensation is a combination of salary and commission. He feels more connected to the bigger picture, “If I make $10 million for the company I’d get paid accordingly.”

Nonprofits are responding to defectors like Broderick. “As there is more and more competition for resources there is clearly an awareness of how to be more efficient,” says Russ Finkelstein, associate director of Idealist.org, a job listing service for the nonprofit sector.

For example, Echoing Green is a foundation that gives grants to social entrepreneurs to create groundbreaking change in the nonprofit arena. The idea that these start-ups are accountable for creating measurable results is much more in line with the values of today’s workforce – no matter what sector they come from. And employees of nonprofits manage their careers with the same focus and drive as someone in the business sector.

Jen Cormier works at Make-A-Wish in Boston. She networks with people in her field, she thinks of herself as a marketing specialist, and she plans her path through a few jobs and then graduate school as carefully as anyone going for an MBA. Similarly, in the old model of the business sector, you earned a lot of money and left the doing-good stuff to the nonprofits. Today, though, companies understand the need to make a difference no matter what sector you are in.

“There are a lot of companies that are doing things that are more socially responsible because creating this sort of work atmosphere retains people,” says Finkelstein. Morgan Stanley, for example, gives employees time off to build houses for Habitat for Humanity. Salesforce.com set up a foundation to afford employees paid time to help in their community.

It’s not surprising that the gap between for-profits and nonprofits is blurring because the search for meaningful work is permeating the whole workforce. People at all levels are looking to learn and grow in their work, according to Jennifer Deal, senior researcher for the Center for Creative Leadership and author of Retiring the Generation Gap: How Employees Young and Old Can Find Common Ground. And while nonprofits have typically been the places to feed one’s soul, the business sector has woken up to the fact that one of the best ways to retain young employees is to help them grow.

One of the most shocking turns in today’s workplace is that it used to be that young people went to the Peace Corps to grow. Now people go to big accounting firms because they are leading the way in retaining young workers, by infusing work with meaning. You get a mentor, you get rotating responsibilities, and you get opportunities to volunteer, on company time. A study by Deloitte found that volunteer opportunities attract a stronger candidate pool in the business sector. And Ernst & Young rewards high performers with a Social Responsibility Fellowship.

Cormier says people discouraged her from working in the nonprofit sector as being unrealistic and a poor career choice. “A lot of naysayers told me wait until you get to the real world.” Other people will view socially responsible business with cynicism – firms providing do-gooder opportunities merely to win the war for talent. But you could also look at this as a sort of version of a golden age of capitalism: Finally, companies are giving back to the community in a way that touches employees at their core, and finally nonprofits are being run efficiently in a way that really does get help to the needy, and this, after all, is good for everyone.

23 replies
  1. Sam Davidson
    Sam Davidson says:

    This is a great article – thanks for highlighting changing trends in nonprofit personnel practices and the desire of the next generation to make an impact with their entire life, and not just their volunteer time.

    * * * * * * * *

    Thanks, Sam.

    This seems like a good time to add that I’m a fan of Sam’s site — great resource for each of us to fiugre out the best way we can make a difference.

    http://www.coolpeoplecare.org

    –Penelope

  2. Ross
    Ross says:

    I must admit, Penelope, this is one of your better blogettes. The grammar could still use some brushing up, however.

  3. Susan Johnston
    Susan Johnston says:

    “The worst part of working at a nonprofit was how far removed the compensation system was from the bottom line.”

    That is what soured me on working for nonprofits a few years ago, and I have a feeling that many of them still function that way. It doesn’t matter how much you improve the bottom line, because salary is purely hierarchical at many nonprofits. The younger you are, the less you’ll be paid because the higher-ups think you need to suffer for the cause they way they did when they were starting out. Of course, $30K went a lot further 10 or 15 years ago than it does today and many nonprofits are loosing their best talent because, good intentions aside, the salaries are just not enough to sustain a reasonable standard of living without working two or three jobs and living with two or three roommates.

    • Danielle
      Danielle says:

      I completely agree Susan. I’ve been working in non-profits for six years, and I’m not even 30 yet. I started off wanted to working in non-profits because I wanted my work to do good. I’ve had my ups and downs, but now I’m living on my own, in New York City (not Manhattan), and I need more than a paycheck for rent. It’s very hard to want to stay in the industry when you’re always broke.

      I’m not saying I want to be rolling in money, but basically in order to survive I have to have a roommate/live in lover, or live where no one else does, or have to have the commute from hell. I love what I do, although I am boggled at how much inefficiency is rampant in non-profits. If these were companies, they’d be gone.

      I’d like to learn more about Andrew Broderick, and others switching from non-profits to for-profits. I can find lots of stuff switching from profit to non-profit, but not vice versa. Perhaps you could elaborate on your experience, Barbara?

  4. Mo
    Mo says:

    This is a great article. Another helpful resource for those business minded individuals interested in nonprofit careers is Commongood Careers.

  5. Queercents
    Queercents says:

    Penelope,

    Although I've never worked for a nonprofit, it seems most are being forced to become more enterprising in an increasingly competitive landscape. A few years ago, I was surprised to learn of a friend's starting salary ($130K + bonus) at a national voluntary health agency (located in a Southeastern city, not New York or D.C.) I learned from him that national fundraising and donor development positions are given similar compensation packages that revenue generating positions can get in for-profit industries.

    It's a false notion that you can't make decent money working at a nonprofit. When I was starting out 15-20 years ago, I didn't even consider nonprofit opportunities because of the low-pay perception. That's just not the case today.

  6. Kim J.
    Kim J. says:

    “For him, the worst part of working at a nonprofit was how far removed the compensation system was from the bottom line. ‘I could raise $35 million or I could raise $1 dollar and I'd earn the same amount of salary.'”

    The idea of compensation compensatory to *amount raised* is dangerously close to what is considered unethical in the profession of fundraising. This is a rather controversial topic but in my opinion, as well as the opinion of the Association of Professional Fundraisers, fundraising should *not* be tied to commission. Ever.

  7. MarilynJean
    MarilynJean says:

    I have to agree with the notion that salary is a huge barrier to many people seeking to work and working in nonprofits. Just the other day, several people forwarded me a position posting at an organization that I would love to work for. The position was responsible for fundraising, marketing, volunteer management…even bookkeeping and the pay? 25-30K. $25,000 for someone to be your sales rep, PR director, HR officer, accountant, webmaster, etc.

    There is a great discussion going on over at the Chronicle of Philanthropy about nonprofit compensation and how it is not comparable to for-profit industries and how employees are getting burned out on working without fair compensation and benefits. And factor in things like age and gender and the situation looks even bleaker.

    And I certainly agree with Kim J.: compensation should never be tied to commission. Ever. I don’t know where this guy worked, but if I don’t reach my fundraising goals, we don’t have office space, we don’t get paid and our constituents don’t get served. If he could retain a job regardless of funds raised, maybe I have been working at the wrong organization!

    Admittedly, there is a financial bottom line, but the mission should be what drives you to achieve your goals (though missions don’t always pay the bills).

  8. R Luke Evans
    R Luke Evans says:

    "Everyone wants to know how they make a difference – whether it's for-profit or not-for-profit."

    Penelope,

    I sure hope this trend is true because if it is, there may be long-term hope for our society after all. I'm a Boomer who has been trying to initiate change and make a difference for 30 years now. And my resume has the scars to prove it. My biggest challenge was (and often still is) just getting people in management and positions of influence to listen. So if enough people from the Chaos generation (Gen X) and the Internet generation (Gen Y) are making their concerns known simply through their collective behaviors, then inevitably those with influence and power will be forced to listen.

    But listen for what? The opportunity perhaps to influence an ethos to create space in organizations for meaningful dialogue, discussion, and debate about transforming seemingly autocratic money-first organizations into more democratic person-first organizations. This is not to say, of course, money isn't important – all organizations and institutions, even families, have bottom lines, otherwise bankruptcy and poverty are sure to follow. It's just that financial and physical capital should serve primarily as means to just ends and not ends in themselves. Just ends such as the common good (for businesses), the greater good (for not-for-profits and government), and the greatest good (for caring families) serve as ends that not only sustain life in the short run but provide hope in the interim and give life positive meaning in the long run.

  9. Jennifer
    Jennifer says:

    I am totally turned off by the comment from the person who left the nonproft for the business world because he didn’t get a cut in the earnings. I wouldn’t want to donate to a company knowing that someone takes a percentage for commission. I currently work for a not-for-profit. I understand that since I do I will not earn a huge salary like in the business world. However, I love my job and I want to make a difference in others life. If I did earn a big salary less money would go to the “cause” that we are working for in our line of business. Since we have had a government leadership that doesn’t focus on the United States and helping out those at home rather spends billions on other countries the social service dollars are getting slashed. Since the cost of living has risen, we don’t get as many donations because people are “donating” to their own life. I see the not-for-profits and business environment similar with the need to be very accountable or showing productivity but that is all right now.

  10. Charlie
    Charlie says:

    A related trend that should be considered is the growth of the socially-conscious for-profit company. Corporate jobs at places like ClifBar and Whole Foods that try to make a difference while making a buck are highly sought after. Also, many entrepreneurs are figuring out how to make a living and support a cause at the same time. My friend, for example, is starting a company that “greens” homes and businesses.

  11. Alice Bachini-Smith
    Alice Bachini-Smith says:

    I’m sure you’re right, although it seems like quite a difficult idea to convince people about generally. One day, all the home-decorating-TV-show companies will have to provide free homes and remodels for the “deserving poor”, for instance- just to get past Go.

  12. lucilla
    lucilla says:

    I worked for over 9 years at a non-profit organization and I loved. The only problem was the pay. They offered me a full time job but I turned it down because they were going through financial hardships. One of the students asked me what I would be doing once I left and I told her I would be working in a call center with adults. The student said to me, “That is going to be boring Lucy”. O the young are so wise. For the next four years I dreaded working in the call center environments and decided to try working for myself. I have been trying to get back to a career where I help people with their resumes for profit. I am still helping people which is important and provide them with lots of information to assist with guiding them in their future career choices and transitions.

  13. JB
    JB says:

    Thank you for writing this. I work at a non-profit and love it. I like knowing exactly how I am contributing to the world. Plus, I’m learning new transferable skills and dealing with different challenges I wouldn’t face in the corporate world. Since resources are limited I wear a lot of hats in the office and have really seen the personal and professional growth in myself and collegeaues throughout the past year.

    It’s not for everyone, but as a someone in my mid-20’s who’s been volunteering consistently with non-profits for 10 years, I have a higher job level of job satisfaction that my last job in the corporate world because I’m working in an organization I am familiar with and truly believe in its purpose and mission statement.

    Downsides: The majority of pay at non-profits is lower than it should be. It’s difficult recruiting and retaining talented employees with lower salaries. Dealing with the severly limited resources at some non-profits is very stressful. But what job isn’t stressful? Also, there’s no retirement matching at my job, just a pension. As we know, young people aren’t staying in their jobs forever anymore, so a pension is worthless to me as I probably won’t be around long enough to be vested.

    Pluses: Great benefits (full medical, dental, lots of vacation and sick time).

  14. Aimee
    Aimee says:

    The difference between non-profits and the business industry is shallowest in the associations that support business industries like SHRM or NAM. One of the things I run into most working with associations is that members expect you to be extensively knowledgeable about their industry. I’m a meeting planner. I can tell you 15 ways to order and set up food and beverage to maximize your budget but I am not qualifies (nor do I care) to have a technical discussion about the merits of various teacher education accredidation groups. Many of the older employees came from the industries that the association’s represent so don’t understand association professionals, those of us who specialize in an area of association management (membership, government relations, meetings etc.). It’s not that I don’t care about my non-profit’s mission. I think defining the best criteria for teacher accreditation is important but my career is not tied to this association so I choose to focus more on developing my meeting planning skills. I agree with Penelope that the industry is becomming more professional, but I think there is still a long way to go for most in areas such as compensation.

  15. Suzanne
    Suzanne says:

    I think it’s worth noting that a lot of Gen Xers got their start in nonprofits, because that’s where the jobs were in the early to mid-1990s. I think you can thank Gen Xers for the increase in nonprofit organizations and jobs, as well as the professionalization of the industry. Gen Xers don’t get credit for much, however, we certainly deserve it here.

    I believe that even journalism will become a nonprofit industry in this century – mainly foundation-supported reporting on specific issues such as the environment. Before you ask if that would that be objective reporting, ask yourself if corporate ownership of news organizations influences reporting.

    * * * * * *
    That’s a great point about Gen-X. As an X-er myself, I love seeing my own history reflected back to me, and this is a great comment for that. Thanks.

    Also, such an interesting remark about journalism. I think there is truth to that — and probably sooner than we think. But maybe a way to think about journalism is not that it’s non-profit but that journalism is a means to something else, and the line between advertising and journalism will go away. Maybe. Maybe we will rely on our own good judgment instead of that line.

    –Penelope

  16. Brian Johnson
    Brian Johnson says:

    The time has come to start making some subdivisions in the non-profit sector. Trying to make sweeping generalizations about a hospice facility, boy scout troop, symphony orchestra, homeless shelter, and aeronautics research institude in the same sentence just doesn’t work.

    Measureable results are fine for some of these missions but completely irrational for others. Having salaries that are competitive with the private sector makes sense if you’re curing cancer, but has a hugely adverse impact if you run a food pantry. The only thing these organizations have in common is one small section of a 16,000 page tax code.

    I appreciate the point of this post, but each of these issues should be debated around a certain industry within the non-profit sector.

    As it relates to pay disparities, there’s an inherent advantage for non-profits with lower salaries – it provides a very effective screen to weed out people that are passionate about what they’re doing vs. just looking for a paycheck. Employee passion can be a huge factor in the success of a non-profit in delivering its mission.

    * * * * * * *

    Brian, you bring up some interesting points that I didn’t consider.

    I don’t know about that salary stuff, though. I think these might all become moot as for-profit companies allow people to have a big salary and have time to work at causes they are passionate about. Additionally, I think companies like Apple get people who are very passionat about Apple without having to “weed people out” by paying them below-market wages.

    –Penelope

  17. Jennifer
    Jennifer says:

    I understand about doing community care day and people being alowed to take time from their work to “volunteer” in the community. At our nonprofit we do use these services but to be honest it is a lot of work to get ready for it. Finding things they can do, time to train and monitoring what they are doing. Plus the responsibilities are not always the most pleasant. The recent experience was awful. We had them painting a wall. They had paint splatters all over the floor even with a clothe down and did a terrible job. We had to have the carpets cleaned and then hired a company to come in and paint over it. I am glad that people want to help but sometimes it is a lot more work then worth.

  18. Flexo
    Flexo says:

    I started in non-profit, switched to corporate, and now I’m itching to get back to non-profit, even if I have to take a pay cut to do so. I gained a bit of perspective and knowledge in the for-profit world, but I do have the feeling that the work I do is incredibly shallow. I want to get back working for an issue that I care about and start making a difference every day.

    By the way, I’m 31. Does that make me part of Generation X…? I’ve never been completely sure about that… I’ve heard differing opinions about the definition.

  19. Jeremiah
    Jeremiah says:

    I work for a non-profit in the IT industry and it’s nice to know that my hard work is helping people. I can’t see myself being as dedicated if my CEO made 700k salary and millions in bonuses.

  20. Barbara Saunders
    Barbara Saunders says:

    I have worked at both nonprofits and for-profits. Every time I’ve left a nonprofit, it’s been the lack of professionalism, not the low pay, that drove me out. It’s one thing to pay person X% less for the same job. It’s another to keep intelligent people (usually women) in support roles indefinitely.

  21. Susan
    Susan says:

    Well put, Barbara! I’ve heard those support roles referred to as the “pink ghetto.” That was a major factor in my decision to leave the nonprofit sector.

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