Nonprofits Are Raising Salaries 25-35% to Compete—And It's Still Not Enough
I need you to sit down for this one: nonprofit organizations have increased average salaries 27.3% over the past two years, and they're still hemorrhaging talent to the private sector. Reports indicate that 68% of nonprofit leaders say competitive compensation is their top challenge, up from 34% in 2021.
The old playbook—posting below-market salaries and hoping mission-driven candidates would take the hit—is completely dead. Nonprofits lost 23% of their workforce to corporate employers in 2024-2025, and the ones who stayed are demanding—and getting—serious raises.
If you're a nonprofit recruiter still leading with "competitive benefits and meaningful work," I have bad news: everyone says that now.
What's Actually Happening with Nonprofit Salaries
Let's look at the numbers, because they're genuinely shocking for an industry that historically underpaid by 20-40%:
The raises are real:
- Development Directors: average salary increased from $78K to $105K (35%)
- Program Managers: average increased from $52K to $68K (31%)
- Executive Directors at mid-sized nonprofits: $120K to $158K (32%)
- Communications Directors: $65K to $86K (32%)
- Finance Directors: $85K to $112K (32%)
The gap is narrowing but still exists:
Nonprofits now pay approximately 12-18% below corporate equivalents, down from 25-35% pre-pandemic. Progress? Yes. Enough to stop bleeding talent? Not quite.
The competition is brutal:
Remote work opened the floodgates—nonprofit employees in low-cost cities can now take remote corporate jobs paying Bay Area salaries. Your Director of Development in Omaha just got recruited by a San Francisco startup offering $180K fully remote. Good luck matching that.
Why This Is Happening Now
Several forces converged to create the nonprofit salary crisis:
Pandemic giving surge created expectations: Charitable giving hit $499 billion in 2024, up 23% from 2020. Employees watched record donations flow in while their salaries stayed flat. That disconnect radicalized an entire workforce.
Inflation forced the issue: Nonprofit employees simply couldn't afford rent on 2019 salaries in 2024 markets. When your Development Manager can't pay for childcare, "mission alignment" doesn't cover the gap.
Corporate ESG hiring offered alternatives: Companies building CSR departments, ESG teams, and corporate foundations started recruiting directly from nonprofits—offering mission-adjacent work at corporate salaries. Why take $70K at a nonprofit when you can do similar work for $120K at Salesforce.org?
Generational expectations shifted: 72% of Millennial and Gen Z nonprofit employees say competitive pay is essential, not negotiable. The "pay your dues with below-market nonprofit salaries" career path is rejected by younger workers.
Unionization accelerated: Nonprofit union organizing increased 340% since 2020, and those unions are winning real wage increases. Employees who see unionized colleagues getting 25% raises expect the same.
The Boards Are Freaking Out (And That's Good)
Here's the silver lining: nonprofit boards are finally getting the message.
83% of nonprofit board members now rank staff compensation as a top governance priority, up from 41% in 2020. Foundation funders are increasingly willing to support "fair compensation" grant requests, breaking the toxic "low overhead = good" mentality.
What smart boards are doing:
- Commissioning salary benchmarking studies and committing to market-rate pay
- Building compensation reserves into operating budgets
- Including staff retention metrics in Executive Director evaluations
- Advocating with funders for overhead realism
Organizations where boards actively champion competitive compensation show 34% lower turnover. Leadership from the top matters.
What's Working for Nonprofit Recruiters
If you're recruiting for nonprofits in this market, here's what actually moves candidates:
Lead with compensation transparency: Nonprofits that post salary ranges in job listings see 2.8x more qualified applicants. Don't make candidates guess whether you're offering $50K or $90K—they'll assume the worst and not apply.
Quantify total compensation: Benefits, PTO, retirement matching, and professional development can add 25-40% to base salary value. A nonprofit offering $80K with 6 weeks PTO, full family health coverage, and 10% retirement match might beat a corporate job at $95K with standard benefits.
Sell flexibility hard: 76% of nonprofit employees rank flexible schedules as essential. If you offer genuine work-life balance—not "unlimited PTO that nobody takes"—promote it aggressively.
Mission matters, but differently: Candidates still want meaningful work, but they want it with fair pay. Don't position it as mission vs. money—position it as mission AND money.
Target corporate ESG burnout: Employees in corporate sustainability roles often find the work more performative than impactful. Recruit them back to nonprofits where they can see direct results—but you need competitive compensation to get them to listen.
Speed up your process: The average nonprofit hiring process takes 67 days—corporate averages 42 days. Candidates who go through extended nonprofit interviews often accept corporate offers while waiting.
The Uncomfortable Budget Conversation
Let's be honest about the elephant in the room: many nonprofits genuinely can't afford market-rate salaries. Here's how to think about that:
If you're underfunded: Either pursue funding diversification (earned revenue, new donors, government contracts) or acknowledge you'll have higher turnover and build that into planning. Don't promise competitive pay you can't deliver.
If you're well-funded but culturally cheap: Some nonprofits have the money but "frugality culture" prevents competitive compensation. This is a board and leadership problem—not a recruiting problem. You need to change the culture before you can fix the hiring.
If you're somewhere in between: Prioritize competitive compensation for hardest-to-fill and highest-impact roles. Not everyone can be at market rate immediately—start with positions where talent gaps are most damaging.
The ROI case for boards:
Nonprofit turnover costs approximately 50-200% of annual salary per departure when you factor recruiting, training, lost productivity, and institutional knowledge loss. A $15K salary increase to retain a Development Director generating $500K annually is obvious math.
The Bottom Line
The nonprofit salary wars are real, they're expensive, and they're not ending anytime soon. Organizations that raised compensation 25-35% are seeing turnover drop 40%. Organizations that didn't are watching their best people walk.
If you're a nonprofit recruiter competing with 2019 salaries in a 2025 market, you're bringing a knife to a gunfight. The candidates you want have options—corporate jobs, other nonprofits that raised pay, remote positions with tech companies doing social good.
Mission still matters. Impact still matters. But "competitive compensation" now means actually competitive—not "competitive for nonprofits." The organizations that accept this reality will build exceptional teams. The ones that don't will keep losing their best people to employers who value talent enough to pay for it.
Sources:
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