Invest in people for better financial results

Even if nonprofit decision-makers don’t accept the idea that nonprofit employees are so idealistic that their pay must be lousy (although some might), politicians needing a cause and journalists needing a story accept it wholeheartedly, even enthusiastically.

After dealing with a journalist who came in sure there was something fishy about a nonprofit that paid its employees well and went out thinking otherwise, Wayne Elsey, founder and chief executive of Soles4Souls, a nonprofit providing shoes to people in need, wrote about the experience in his book ”Almost Isn’t Good Enough.”

Elsey maintains that an unwillingness to invest heavily in people sets an organization or cause up for failure from the beginning. His approach:

  • Hire the best. Pay the best: Good results demand good people. To those who say donors are outraged by salaries, Elsey wrote that donors want impact, and well-paid employees provide that.
  • People aren’t overhead. Elsey believes his organization has low turnover because the approach is that everyone is at the table because they bring something of value.
  • It’s not all business. There is an emotional connection that fosters a sense of connectedness and family.
  • The Pareto Principle spells failure. Students in business school learn the Pareto Principle: 20 percent of the people do 80 percent of the work. If a few people are paid well and the rest are not, this will be true. Don’t let that happen.