Thanks for the post. I think the golden handcuffs concern is worth flagging, but itâs likely outweighed by the bigger problem: talented people who never enter the social sector because they canât afford the pay cut.
Thereâs also a structural issue here. Nonprofits can underpay because theyâre extracting a âmission commitment subsidyâ from employees. And this gets reinforced by funders/âdonors who often treat salaries as wasteful overhead rather than core inputs to doing good work. That creates perverse incentives where orgs compete to look âefficientâ by under-investing in people.
Somewhat obvious note: These organizations can pay more because theyâre exceptionally well-funded. The real issue isnât that some orgs pay well, itâs the unevenness. If compensation were uniformly reasonable across the sector, people could move based on impact and fit rather than financial need.
That all said, publishing compensation philosophies would be broadly beneficial (and more fully in line with transparency).
(FWIW, these points are also broadly true in the public sector.)
Sure, I agree that âcanât affordâ is doing a lot of work there, and most people considering nonprofit roles are coming from positions of relative privilege (especially globally). I should have clarified that Iâm benchmarking large nonprofits, large philanthropies, and for-profits versus other nonprofits.
What I meant is more about opportunity costs and life constraints rather than subsistence: someone with student loans, family to support, or whoâs trying to afford living in/ânear a high-cost city might find the financial gap genuinely prohibitive, even if theyâre still well-off in absolute terms. Also, smaller nonprofits typically offer minimal or nonexistent benefits: limited healthcare, no retirement matching, sparse parental leave, while also having high education requirements and geographic constraints (often expensive cities).