NPO Salary Benchmark - Compensation Study 2020
Remuneration in non-profit organizations (NPOs) follows a different logic than in economically oriented companies. On the one hand, this is due to special features on the part of the employers, especially the financing structure of NPOs, on the other hand, the employees also differ from those in profit-oriented companies when it comes to remuneration.
NPOs often do not finance themselves or only to a small extent through sales revenues, but rather through financing sources such as grants and donations. NPOs are thus obliged to their financial backers in a different way than is the case with a classic, economically oriented, supplier-customer relationship. Funding conditions sometimes define maximum subsidized hourly rates, the valorization of subsidies is often not a matter of course (More-Hollerweger, Simsa et al. 2014). Donors question the proportion of their donations that does not directly benefit the purpose of the donation, but is used for overheads, i.e. the organizational infrastructure. Very high salaries can damage the reputation of an organization.
However, NPOs are also dependent on good employees, must hold their own on the job market and pay fair salaries. Research shows that employees of NPOs apply different criteria to assess whether their salary is fair than in the for-profit sector. In this respect, it makes sense to conduct a separate salary benchmark for NPOs.
For the first time, the NPO Institute/NPO & SE Competence Center conducted a study on the salary situation in the nonprofit sector in 2008 based on data from 2007. Since then, the NPO Institute/NPO & SE Competence Center has repeated the study four times, in 2010, 2012, 2016 and 2020 with data from the previous year. For the current fifth report, data from 2019 were collected at the beginning of the year (2020). 18 organizations have participated in this.
The aim of the study was to collect and compare concrete, business-relevant data on the remuneration of employees in Austrian nonprofit organizations, for which different hierarchical levels and functional areas of different nonprofit organizations were taken into account in the form of a benchmark.
The different salaries and organization-specific data were collected in the participating Austrian NPOs by means of a questionnaire and an Excel-query. The data collection took place from January to May 2020. The following nine hierarchical positions were used to compare the salaries based on predefined criteria:
P1: Managing Director
P2: Divisional or departmental managers
P3: Team leaders
P5: Independent employees* plus
P6: Independent employees
P7: Independent employees in the training phase
P8: General assistants
For the first time, there was also a differentiation into nine different functional areas:
F1: General Management & Cross functional
F2: Programmes - operational
F3: Programs - strategic
F5: Human Resources
The evaluation according to different functional areas replaces the organization-specific presentation of salaries from previous studies.The results are exclusively available to the participating organizations