This is a tale of two headlines about nonprofit leadership.  In the March 6, 2008 issue of The Chronicle of Philanthropy, we find the following headline on page 23:  “If I’m going to have to work that hard, and be underpaid, I can’t do it.”  Just six pages later, a very different sentiment surfaces:  “Americans say charities spend too much on overhead, poll finds.”

The first headline came from a survey of mostly young workers in nonprofit organizations.  The second headline expresses the opinion of 62% of Americans polled by Elliott Research, of Phoenix.

The first survey warns that, just as the Baby Boom generation begins to transition into retirement, 30% of the successor generation regards the nonprofit leadership positions soon to be vacated as unappealing, due to their killer hours and relatively meager compensation.  A whopping 69% of respondents considered themselves to be underpaid in their current nonprofit posts.

The second survey reveals that the American public believes that nonprofit organizations, which typically spend 30% to 40% of their income on overhead expenses, need to tighten their belts.  The respondents felt that 22% for overhead would be just about the right number.

Given the fact that by far the largest component of nonprofit overhead is personnel costs, it is clear that the general public’s prescription to avert the impending crisis in nonprofit leadership caused in large part by chronically low salaries is… to cut the wages of nonprofit employees.

It is curious indeed, that most Americans highly value the work done by nonprofit organizations, but they value the work done by nonprofit employees-well-not so much. Top-flight athletes routinely collect more for playing in a single game than the typical nonprofit employee earns all year.  A-list celebrities rake in more for making a single movie than most nonprofit workers can hope to earn for a lifetime of dedicated public service.  Yet who contributes more to the common good:  a quarterback, a diva, or a youth worker?

To commit to a career in nonprofits is already akin to taking a vow of perpetual poverty.  The workers quoted in the first survey who complained about being underpaid are not seeking a 10,000 square foot vacation retreat, or a private jet, or millions in stock options.  Instead they seek a living wage:  enough to repay student loans, get a decent apartment, and take their families out for dinner and a movie now and again.

Is nonprofit overhead too high?  In a few isolated cases, the answer is yes, but not so across the board.  Nearly 20 years ago, Brian O’Connell, then the President of INDEPENDENT SECTOR, wrote that the real scandal in the nonprofit world is not the handful of leaders whose salaries are too high; the real scandal is the hundreds of thousands of nonprofit workers whose salaries are shamefully low.

O’Connell was right then, and he is even more right today.  At a time when low compensation threatens the future leadership of all nonprofits, the idea of cutting overhead is foolish at best and suicidal at worst.  It’s time that we start valuing the health care, education, human services, arts and culture, religion and environmental programs nonprofits provide as much as we value professional sports and Hollywood’s latest blockbuster.  If we truly value the many essential things that nonprofits do for us, we will find a way to raise salaries, not lower them, and encourage new leaders, not drive them away.  In fact, to update O’Connell a bit, the real scandal in the nonprofit sector is not just the fact that hundreds of thousands of nonprofit workers are underpaid; the real scandal is that millions of us are unwilling to pay them what they are worth to us.

- Joel Orosz (Baby Boomer)