How to Right-size Compensation for Non-profit Organizations

Non-profit organizations realize they must balance mission-driven values with the need to attract, retain, and fairly compensate talent—all while staying within tight financial constraints.

Custom compensation surveys offer a strategic and cost-effective solution to ensure compensation practices are equitable, competitive, and sustainable.

Key components of custom compensation surveys should include:

Targeted Benchmarking
- Focuses exclusively on comparable non-profits, filtering by sector, size, location, and mission.
- Provides relevant salary data for roles unique to non-profits, such as Development Directors, Program Managers, or Grant Writers.
Role-Specific Job Matching
- Aligns survey data with actual job responsibilities, not just titles.
- Accounts for hybrid roles and evolving job scopes common in non-profit environments.
Total Compensation Data
- Includes base salary, variable pay (if applicable), and non-monetary benefits such as PTO, health coverage, wellness programs, and professional development.
- Evaluates total rewards offerings in a mission-driven context.
Compliance and Equity Focus
- Assesses pay equity across demographics, helping organizations uphold DEI commitments.
- Aligns with IRS intermediate sanctions rules and other legal guidelines for executive compensation.
Custom Peer Group Comparison
- Compares your organization to a custom group of similar peers—based on revenue, region, staff size, or mission.
- More relevant than generalized market surveys or for-profit comparisons.
Insightful Reporting & Analysis
- Offers easy-to-interpret compensation ranges and percentile breakdowns.
- Includes tailored dashboards and summaries to support decision-making at the board and executive level.
Stakeholder Engagement
- Involves HR, finance, executive leadership, and board members in goal-setting and review.
- May include collaboration with external consultants for survey administration and interpretation.

Compensation Survey Advantages: Not just about numbers.

Custom compensation surveys are not just about numbers—they’re about mission alignment, workforce stability, and organizational health. For non-profits navigating limited budgets and high employee expectations, these tools provide the clarity and confidence needed to build competitive, equitable, and financially sound compensation strategies.

Supports Financial Sustainability
- Prevents overcompensation by providing accurate salary benchmarks, avoiding budget strain.
- Avoids under compensation that could lead to costly turnover and recruitment cycles.
Informs Strategic Budgeting
- Guides salary planning, forecasting, and budgeting decisions across the organization.
- Helps prioritize funding and compensation adjustments for high-impact or hard-to-fill roles.
Enhances Talent Attraction & Retention
- Ensures compensation packages remain competitive within the sector.
- Improves employee satisfaction, engagement, and retention by signaling fairness and market alignment.
Promotes Pay Equity and Transparency
- Identifies and helps close internal pay gaps.
- Supports compliance with legal and ethical compensation practices, especially as pay transparency laws expand.
Improves Board and Donor Confidence
- Demonstrates responsible, evidence-based decision-making around salary and benefits.
- Equips leadership with data to justify compensation levels, especially for executive positions.
Customizes Total Rewards Strategy
- Identifies ways to enhance non-cash incentives when financial increases aren’t feasible.
- Helps build total rewards offerings that reflect employee needs and values.
Strengthens Grant Applications and Fundraising
- Provides data to back compensation costs in grant proposals and funding requests.
- Aligns salary decisions with funder expectations around transparency and sustainability.

How Technology Helps Right-Size Non-Profit Compensation Programs

Access to Real-Time, Relevant Market Data

Modern compensation platforms give non-profits access to sector-specific, role-based benchmarking data updated regularly.

Filter by organization type, size, region, and revenue to ensure relevance.
Compare compensation across similar roles in the non-profit sector, not just the broader labor market.

Example: A cloud-based compensation tool, such as CompBldr^®, can show that your Program Director role is 10% below market for similar organizations in your region—helping you correct for gaps before they become retention risks.

Data-Driven Compensation Modeling and Scenario Planning

Compensation management software allows HR teams to simulate adjustments across salary bands, departments, or locations—before committing budget.

Run “what-if” scenarios to test how increases impact total budget.
Align compensation changes with organizational goals, funding cycles, or grant periods.

Example: Model what a 3% salary increase across all staff would cost vs. targeting adjustments only for roles below the 50th percentile.

Pay Equity and DEI Analysis

Technology enables automated pay equity audits across gender, race, and other demographic factors—ensuring internal fairness and DEI alignment.

Identify and address compensation disparities before they become liabilities.
Build a data-backed case for adjustments that support equity goals.

Example: A platform – like CompBldr^® – could flag that BIPOC staff in management roles are paid 8% less than peers with similar tenure—triggering a review and resolution plan.

Custom Reporting for Board and Funders

With dynamic dashboards, HR teams can quickly generate custom reports for executive leadership, board members, and grantmakers.

Justify executive pay with IRS-compliant documentation.
Strengthen transparency and trust with funders through clean, defensible data.

Example: Automatically generate a compensation benchmarking report showing how salaries align with sector medians to include in Form 990 disclosures.

Integrated Total Rewards View

Technology helps non-profits present the full picture of employee value—including salary, benefits, perks, and intangible rewards.

Visualize and communicate the full total rewards package.
Benchmark benefits offerings alongside salaries.

Example: Show that while base pay is slightly below market, your organization’s retirement match, flex time, and professional development funds provide a highly competitive overall value.

Support for Ongoing Compensation Reviews

Rather than once-a-year spreadsheets, platforms offer real-time dashboards that support regular compensation check-ins.

Track how compensation evolves over time.
Align with strategic priorities like talent retention or expansion into new service areas.

Example: Monitor how median salaries shift throughout the year to adjust ahead of upcoming hiring or retention challenges.

Enhanced Accuracy and Compliance

Using automated tools reduces manual errors and ensures compliance with legal and regulatory frameworks.

Built-in alerts for minimum wage changes or compliance gaps.
Audit trails for compensation decisions and approvals.

Example: A tech solution might alert HR to upcoming changes in pay transparency laws that require job postings to include salary ranges.

For non-profits, right-sizing compensation isn’t about spending more—it’s about spending smarter. With the help of modern compensation technology, organizations can:

Make data-backed, strategic pay decisions
Demonstrate transparency and fairness
Balance budget constraints with talent needs
Strengthen retention and organizational health

Download White Paper:

How Nonprofits Can Attract Talent with an Effective Compensation Plan

JER HR Group is a compensation consulting leader of industry-specific compensation surveys that cover traditional functions and new and emerging roles. Contact us for custom compensation consultation, survey execution, benchmarking, and technology.