Special Report February 2006

February 1, 2006       Mark Hrywna      

Your organization is looking for a new leader. You’ve made your pitch, offering what you think is a competitive salary and benefits package. What’s it going to take to close the deal?

Some nonprofits have gone beyond salaries and benefits to entice executives, as well as employees, to work for them. In some cases, it’s because they cannot afford to offer more in salary, while in others it’s been a gradual evolution in employee needs.

Results of The NonProfit Times Salary Survey 2006 show that benefits offered by nonprofits these days span a wide spectrum. There are groups that offer full or discounted health club memberships. Other groups, in lieu of perhaps better wages, provide more lucrative or comprehensive benefits, such as 100 percent health benefits or substantial pensions. Some reported offering as much as $600 in flexible spending accounts for supplemental health policies.

Many nonprofits are flexible when it comes to employees’ work schedules, and a number of survey respondents indicated they move to a four-day work week during the slower summer months or close for a week or two around the holidays while still paying employees. With the increasing costs of health benefits, another incentive is to allow employees the cash if they are covered by their spouse’s health benefits.

Jennifer Dunlap, president and chief executive officer of Development Resources, Inc. in Arlington, Va., which does executive recruitment and strategic development planning for nonprofits, said flex time is something that’s been around for a long time, but nonprofits are embracing it more in recent years to keep employees motivated and engaged. Some organizations have moved to four-day workweeks year-round, giving employees every other Friday off, or promoting telecommuting in a much stronger way. “It’s always been around, now it’s being accepted and encouraged,” she said.

Retention in the nonprofit field is challenging, Dunlap said, which is one reason she’s seeing more attractive benefits, such as retirement fund matches and retention bonuses. Some organizations match 100 percent the employee’s pension contribution, while others offer bonuses to employees who stay at an organization for a certain period of time. Performance bonuses also are becoming more popular, not only for fundraising professionals but also more broadly, she said.

A team effort

At Chattanooga Christian School in Tennessee, funding benefits is a team effort. The approximately 120 employees contribute to a self-funded adoption fund, President Don Holwerda said. The school uses a payroll deduction to the group health insurance plan and reimburses an employee up to $3,000 for all adoption-related bills. A payroll deduction of $3 per month would generate that within a year, he said.

“It’s a very little payment for what we think is a considerable benefit,” Holwerda said. Employees voted on the deduction before it gained approval from the school’s administration and board. The payroll deductions stop once the fund reaches $18,000, enough for up to six adoptions per year. If no one dips into the fund, it simply earns interest.

The school had a teacher return in January from adopting a child in China, Holwerda said. The adoption fund probably won’t cover the whole thing, but neither does a group health plan. “It may help with the plane ticket,” he said.

This is the fourth time a teacher has taken advantage of the benefit since the school implemented it about five years ago. There have been recent discussions about increasing the benefit to $5,000, he said, simply because the adoption process costs so much now.

“It’s a great benefit that helps people,” Holwerda said. “It makes a strong statement that if you’re starting a family, no matter how you go about it, we’re happy to help and step in.”

Incentives that support the family are most appreciated, Dunlap said. For instance, one organization she has dealt with allows five hours per month for a parent to visit a child’s school.

Other nonprofits allow employees to pool their vacation or sick time for those who might need it. Dunlap saw that occur in the aftermath of Hurricane Katrina, when people were trying to volunteer their time to help the devastated region.

Some nonprofit volunteer organizations allow employees a certain amount of time per month or per year to volunteer while others allow time off for employees to serve on boards of other organizations.

It’s the little things

Benefits don’t always have to be expensive or complex to draw interest.

“It’s the smaller things that just keep folks happy,” Dunlap said, such as bringing in lunch on Fridays. These things don’t cost an organization a lot, she added, but nonprofits need to find things to motivate and reward employees.

Dr. Bob Zlotnick, executive director of Atlantic Prevention Resources in Pleasantville, N.J., a substance abuse prevention group, said his 15 or so employees love that they can obtain a membership to the local Sam’s Club through their employer. To shop at Sam’s Club, a division of Wal-Mart, customers must pay a membership fee of approximately $30.

Some benefits don’t have to cost any money at all. One organization allows parents to bring their children, up to 1 year old, to work.

At the Minnesota Valley Humane Society in Burnsville, Minn., outside Minneapolis-St. Paul, employees are allowed one free animal per year. A majority of the almost two dozen employees take the opportunity, Executive Director Lynae Giseke said. In her eight years, she’s brought home eight cats. The shelter has a range of animals, from dogs and cats to chinchillas, guinea pigs, birds and more.

It’s not uncommon for a company to defray the cost of continuing education, or pay for it entirely. One nonprofit responding to the survey provides a free master’s degree, to managers who only have an undergraduate degree, and will use the degree to assist the agency. Other groups offer various reimbursements toward continuing education or paying the cost of obtaining certain licenses.

For nonprofits that present classes as part of their mission, some provide the classes to employees at a reduced cost, or free.

At the National Outdoor Leadership School (NOLS), employees who have been with the organization at least one year can take climbing, kayaking or sailing instruction. The wilderness organization, based in Lander, Wyo., about 200 miles southeast of Yellowstone National Park, teaches outdoor skills and leadership.

John Gans, president and executive director at NOLS, said the benefit allows employees taking the wilderness classes to learn more about the program, whether they work on the finance end of things or outdoors, but also “gives them something of value.” Many of the 600 employees worldwide often take advantage of the courses at some point in their career, he said.

Some nonprofits have begun to give employees accrued time off, not specifying for personal, sick or vacation time. But at Indian Valley Housing Corporation in Souderton, Pa., about 40 miles north of Philadelphia, employees are allowed one day per year specifically for a personal retreat. Case managers spend their days hearing unfortunate stories from clients who are in need of housing, which can be stressful. That’s why Executive Director Karen Kispert wants her staff to take advantage of the retreat day, which is offered in addition to three personal days.

The clients served by Indian Valley are typically under-employed and receive little, if any, sick time, Kispert said. If they do get sick or need time off, their income usually suffers, prompting the need for help with housing. Other situations might have women leaving abusive relationships or family or friends who can no longer have people living with them.

The housing agency began offering the annual retreat day about four years ago and about two of its three full-time employees use it each year, according to Kispert. As executive director, she can get out of the office to conferences and such, and she encourages her program staff to take the retreat day.

“It’s not just about going to a spa,” Kispert said, but to make that person refreshed psychologically, emotionally and spiritually. For Kispert, it was attending a music festival. For another employee, the retreat was taking part in a church outing.

The retreat day grew out of a request by the shelter director to attend a three-day weekend women’s retreat through her church. Kispert made the request to her board’s personnel committee, which approved of it.

Nonprofits, just like for-profit corporations, likely will see benefits continue to evolve as they continue to seek ways to attract and retain their employees. NPT