Nonprofits of all shapes and sizes share one core necessity with for-profit organizations: the need to attract and retain a highly-skilled and passionate team of employees.

Any organization, even with the most generous donors, will quickly derail if no one is there to effectively steer the ship and handle the day-to-day logistics of running it. For nonprofits, donors and their gifts are what fuel their operations, but an engaged internal team is just as critical for their long-term sustainability. 

Remember that developing your nonprofit’s internal culture and ability to engage talent are crucial parts of building capacity over the long run. 

A strong understanding of human capital management and other HR concepts and best practices will go a long way to lay that foundation – but first, you have to get up and running by attracting a team to manage and develop! At Astron Solutions, we specialize in nonprofit HR support and strategy development, and have seen firsthand the difference that a stronger, more engaged team can have for organizations of all sizes. 

Let’s walk through 3 foundational strategies that nonprofits can use to make themselves into more competitive employers in a tight labor market:

  1. Boost engagement with a stronger culture.
  2. Offer more flexible employee benefits.
  3. Develop concrete compensation strategies.

Starting with these core building blocks, you’ll be on your way to strengthening your nonprofit’s team and internal operations in no time. Let’s get started!

1. Boost engagement with a stronger culture.

Just as a focus on donor engagement is the key to developing any successful big-picture fundraising strategy, it’s equally important to also look at the underlying fundamentals of your internal operations. Specifically, your nonprofit has to be an engaging place to work in order to be a competitive employer at all. 

Consider these tried-and-true strategies for creating a more engaging work environment:

  • Focus on communication. An open approach to communication is the hallmark of any strong employer culture. This encompasses not only encouraging more communication and transparency within your organization but also creating the structures to support those goals. Systems for regularly sharing feedback, internal knowledge, and campaign progress can all help to ensure employees feel in-the-loop and empowered to take active roles in your nonprofit’s growth.
  • Promote your mission internally. Your nonprofit’s outward efforts are all driven by your mission, but is there a similar guiding force for your internal operations? Make sure your organization’s employees feel actively connected to your overarching mission. Offering philanthropic opportunities or benefits, like incentivized group volunteer outings, is a great way to get your in-office team in direct contact with your mission. Explore this Re:Charity guide to corporate philanthropy to learn more about typical programs.
  • Streamline your internal operations. Many nonprofit organizations work with outdated technology or clunky processes without even realizing it. While tight nonprofit budgets definitely play a role here, there are more options than ever for building out professional-grade solutions for organizations of all sizes. For instance, cutting out the clutter of your day-to-day tasks with smarter project management significantly improves your employees’ experiences over the long run and minimizes logistical frustrations that can kill engagement. 

When approaching culture and employee engagement, many leaders (in both nonprofit and for-profit organizations) can easily mistake more surface-level perks with the deeper roots of engagement — like open communication, shared guiding visions or goals, and teamwork. Perks and short-term benefits can effectively attract talent, but they’ll do little to actually engage those team members over the long-run. 

The main takeaway is that strengthening your internal culture will go further to make you a competitive, engaging employer in the long run (and not just a competitive recruiter). 

2. Offer more flexible employee benefits.

Employers around the globe are competing for increasingly skilled and sought-after labor pools. However (and as we’ll discuss in the next section), that doesn’t mean your nonprofit’s only option is to drain its budget with extremely competitive salaries. Benefits of all types (not just financial) play increasingly important roles in attracting and retaining staff.

In fact, more flexible, non-monetary employee benefits can often go even further to make your organization into a more appealing employer than extremely competitive salaries alone. Remember, a strong internal culture full of engaged team members is the single best recruiting asset you can have!

Here are a few ideas for offering more flexible benefits to your nonprofit’s team:

  • Offer learning opportunities. Online training courses, new certifications, and tuition reimbursement programs are highly valued by today’s employees. Opportunities to work on cross-functional teams and new types of projects are also highly-valued and worth keeping in mind. Your staff wants to keep developing their skills in order to bring more to the table and strengthen your mission. Social entrepreneurship training for your fundraisers would be a great example.
  • Provide more flexible work arrangements. Remote work options or flexible scheduling options are increasingly important factors for attracting strong candidates, especially younger ones! For positions that don’t require continuous physical presence on-site or in-office, it’s definitely worth weighing your options. This benefit is extremely low-cost but can deliver major results in terms of employee engagement and satisfaction.
  • Ask employees what they want. Simply survey your team and ask what types of benefits bring them the most value. This is the most direct way to ensure the effectiveness of any benefits you offer. You might even let employees pick their benefits from a range of options, giving them a more customized and engaging experience. For instance, a more senior employee might not be interested in paid parental leave but would be interested in other benefits like additional PTO.

Benefits play a major role in engaging and retaining your employees and ultimately making your organization a more competitive employer. Just as you develop concrete strategies to retain your donors, you should be doing the same for your internal team. This Bloomerang guide to donor retention lists several top causes of donor turnover. Two of them stand out as particularly analogous to your own internal goals as an employer:

  • 18% of lapsed donors say the nonprofit offered poor service or communication.
  • 54% of lapsed donors could simply no longer afford to donate to the nonprofit.

This mix of preventable and unpreventable causes of turnover can be applied to your own internal engagement and retention goals. Personalized benefits show that you value employees’ opinions and priorities and that you’re invested in their well-being. Flexibility (like remote work) also makes it easier for busy employees to balance their lives and feel that they can “afford” to stay engaged with your nonprofit.

If your organization currently offers few benefits, it’s definitely worth your time to explore your options. Even low-cost benefits will differentiate your nonprofit from others that offer little to none at all.

3. Develop concrete compensation strategies.

Finally, it’s important for nonprofits of all sizes to develop concrete compensation strategies. How you compensate employees for their work communicates your mission, vision, and values to them, and it shows employees how you feel they fit into the bigger picture of your operations. Something that important requires some thoughtful strategy, regardless of how competitive your salaries might be.

To that point, distinguishing between direct and indirect forms of compensation can be extremely useful for nonprofits. Direct compensation includes salaries and bonuses. Indirect compensation includes elements like:

  • The full range of benefits you offer employees
  • Your organization’s management style
  • The overall quality of your internal culture
  • The work/life balance you promote and encourage

As mentioned in the previous section on benefits, indirect compensation plays a major role in boosting employee engagement and retention. These more intangible elements of employees’ experiences at your organization are often deciding factors when it comes to choosing to join (or leave) your team. 

Think of the elements of indirect compensation as strategic assets or tools in your engagement and retention arsenal. If you’re working with a tight budget and can’t afford to focus on direct compensation, this approach can seriously empower your organization to more proactively become a competitive employer in your community.

To begin developing a concrete compensation strategy for your organization, start by outlining and quantifying the forms of indirect compensation that you already offer employees. This guide explains how nonprofits often undervalue their benefits and fail to position themselves as attractive employers despite everything they can offer in terms of flexibility, programs, and cause-specific benefits. Your organization is likely undervaluing its offerings as well.

Next, work with your HR team or dig into your historical data. If you’re using talent or performance management software to support payroll and benefits management, that should be your first place to look. Then, develop pay ranges for different positions based on external market data, your historical salary data, the valuation of your indirect benefits, growth projections, and typical times for promotions or raises in the employee lifecycle. 

Working with a compensation expert or consultant might be a smart move if you’re unsure of the best way to get started developing a structure. These guides can also help you access more comprehensive benchmarking data to see how your compensation strategy stacks up against those of similar organizations. If you’ve never worked with a compensation or human resources consultant before, check out our guide to the process to learn more about what to expect. 

Your organization already understands the maxim that it’s much less costly to engage and retain your donors than to constantly be on the search for new supporters. And when audiences see a highly-engaged community of donors, volunteers, and supporters, they’ll be much more likely to want to get involved. 

This same snowball effect applies to your internal operations, too. To be a competitive employer that attracts top talent, you have to be an organization where people want to work. High engagement, open communication, flexible benefits, and smart compensation will go a long way to bolster your efforts.

March 2, 2020


Jennifer C. Loftus is a Founding Partner of and National Director for Astron Solutions, a compensation consulting firm. Jennifer has 23 years of experience garnered at organizations including the Hay Group, Parsons Brinckerhoff, Eagle Electric Manufacturing Company, and Harcourt General.