Voices from the Third Sector

What About Income Inequality at Organizations Trying to End Income Inequality?

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The CEO of a major organization is earning 20 times the income of his line staff, many of whom are not earning enough to support their families, and must rely on public assistance to just get by. Such a scenario would not be a big surprise in the corporate world, right? But what if in this scenario the organization in question had as its central mission lifting people out of poverty and empowering families? Sadly, this scenario is all too familiar in the nonprofit world and raises particularly intriguing questions when it occurs in the human services sector. Huge discrepancies in earnings have become relatively comparable to the wage gaps reported in the corporate world.

In 2011, the median average salary for a nonprofit CEO at a medium to large organization was almost $126,000. While smaller organizations may pay substantially less, it is widely reported that the behemoths of the nonprofit world have salaries that stagger into the millions. Meanwhile, at the lower end of the spectrum, many direct service staff are bringing home just 10-15 percent (or in many cases less) of the earnings of their organization’s leadership. The average salary for social service workers is around $35,000. Non-degreed staff in the social services earn as little as $12/hour. In a field where burnout and compassion fatigue, or ‘secondary trauma’, are all-too-common occupational hazards, this represents an incomprehensible and self-defeating situation.  Living on $12/hour, or less than $25,000 a year, leaves many workers, particularly those raising families, dangerously close to experiencing first-hand the conditions of poverty they work hard in their professional lives to eradicate for others. If a human services organization is actually adding to the poverty problems, what is the point?

The most pressing concern here is not the high salaries offered to nonprofit organization heads. It can be argued that this level of salary is necessary to attract high quality administrators to the field. Many of the most innovative and influential leaders in the nonprofit and human services sectors have been wooed from the flashy corporate world and the potential for commensurate salaries has played an important role in attracting these individuals to organizations they might otherwise have never considered. The money generating experience and networking power offered by these individuals may prove so worthwhile to an organization that the investment of a six figure salary is simply good sense.

The real concern when it comes to compensation in these sectors is that the wages at the bottom are so low. A 2011 survey conducted by the National Council for Community Behavioral Healthcare found that some behavioral health workers earn less than managers of fast food restaurants. If social service organizations are not paying their employees a living wage, they may be contributing to the problems they are designed to solve. How can an organization purport to prioritize its clients if it puts such low value on its staff?  While much advocacy occurs around issue teacher and educator salaries, social workers and other human service staff are rarely a part of this equation. This is in spite of the fact that these professionals have equally challenging, and often times more stressful, jobs.

The idea that most social workers are government employees earning comfortable wages with great benefits is a misnomer. More and more, social services are being farmed out to private entities, which typically offer less competitive salaries and inferior benefits packages.  The average median salary for a social worker at a state or local government agency is about 20 percent more than those working for private nonprofits. And while wages are higher in the public sector, it is private sector social work jobs that are growing at a rapid pace.

What is the solution? If we continue to invest big bucks into our social service nonprofit leaders, let’s take similar care to invest in our social service workforce. Paying staff at proper rates to do important jobs for our community should be a reasonable part of the funding of an organization The “boots on the ground staff” who spend each day working to provide services to families and children in need surely deserve salaries that allow them to support their families without contending with similar struggles.

About the Author:  Rose Frech is a Research Associate at The Center for Community Solutions