A Movement for Equality

When it comes to compensation, nonprofit leaders — male and female — fare much better when a man chairs the board. Male board chairmen approve higher pay rates for both men and women than do females who serve as board chairs.

Nonprofits are dominated by female workers, far more than business or government are, so pay gaps are troubling and striking. Nearly three in four workers are female, and GuideStar’s most recent report found that CEO pay for women at nonprofits nationwide lagged by as much as 23 percent compared with men.

In southwestern Pennsylvania, where my organization works, we used IRS data to find out what lies behind some of these pay-equity issues. We learned that when a man is the chairman of the board, he approves an annual salary for a male executive director that is $90,000 higher than the amount a female board chair approves for a female leading a similarly sized organization. Male executives with female chairs are the next best compensated. And female executives with male chairmen make more than CEOs at organizations with female chairs.

Why is this true?

Although women make up 74 percent of the nonprofit work force nationwide, the top jobs — both paid and volunteer — are disproportionately held by men. In the largest nonprofits, excluding hospitals and universities, men hold the CEO position in more than 70 percent of the organizations.

Men also hold a disproportionate share of the top board roles at these same organizations. Although many nonprofits believe they are bastions of social justice, when you look closely at the statistics on employment, it is clear that pay equity is less prevalent in nonprofits than in the rest of society.

While we can attribute some of the pay inequities to men, it is also women who have to take responsibility for this state of affairs. Women like to lead by gaining consensus, and they often worry that if they push too hard they will be labeled as bossy — even though a man taking the same stances would never be considered too assertive.

However, in the case of setting salaries, male board leaders will advocate for their staff leaders. They say, “We need to keep him. We need to pay him well.”

Women don’t do this often enough.

Transforming the situation also requires thinking about where the power to create change resides in the nonprofit world. Foundations and other donors could achieve strong results if they made this a priority. After all, boards often pay close attention to the wishes of their donors. But neither boards nor donors have focused much on issues of pay equity or how to keep top talent.

The biggest push to improve nonprofit management over the last 20 years has been focused on measuring outcomes. Certainly as nonprofits spending other people’s money, we have responsibility for assuring positive results. But it is urgent that nonprofit leaders give as much weight and perceived accountability to ensuring the health of the primary asset of every organization — its work force.

Many board members join an organization because of a calling to the group’s mission. They are not interested in being employers. As reported in the “Daring To Lead” study published four years ago, almost 50 percent of nonprofit top leaders receive no annual evaluations. That’s a sign that paying attention to employee needs is not a priority for most nonprofit boards.

Boards need to think harder about employment issues and stop allowing pay inequities to be the norm.

One thing that might prod them to take action is the threat that a grant maker will pull money from organizations that don’t pay women fairly. No nonprofit executive wants grant makers overly involved with internal matters. However, many board members respect the knowledge and authority of grant makers and would be more likely to make change if encouraged by foundations and other big donors.

It’s time that all of us in the nonprofit world insist on increased respect for the work we do — and the pay we receive for doing it.

To be sure, change will be hard. Donors have every right to expect careful stewardship of their hard-earned dollars. But it is wrong to value only efficiency and effectiveness and not give equal consideration to fairness in the nonprofit world, which is supposed to be a place that promotes social justice for all (including its own workers).

This is an especially important moment to seize upon pay-equity issues because we are about to witness a major change in boardrooms and chief-executive offices at nonprofits nationwide. Ten thousand baby boomers turn 65 every day, and they are the people who built so many nonprofits. As they leave, younger people deeply in debt for their education will not be able to choose nonprofit work unless employment practices improve.

Insisting on greater fairness and respect in the nonprofit workplace is not just an ethical stance; it’s a practical one.

Let’s join forces to start a 74-percent movement — one that demands equal pay for equal work at nonprofits, not just for CEOs but for everyone.