Over nearly two decades, Peggy Outon has studied the pay gap narrowing between male and female nonprofit executives in the Pittsburgh region. In 2010, for instance, women made 75 cents for every dollar men made. By 2019, that shifted to 82 cents.
But a 2021 report from the Bayer Center for Nonprofit Management showed a dramatic jump that surprised even her. Women in leadership roles at Pittsburgh-area nonprofits now make 92 cents for every dollar men make in similar roles.
“What is particularly pleasing to me is to see that the reason the pay gap narrowed this time is because we have more women of power in larger organizations,” said Outon, who leads the center at Robert Morris University. “And I believe that will help create permanent and sustainable change not just for executives, but for all women working in nonprofits.”
Yet the promising news has a contrasting backdrop. The report that spans 185 nonprofit organizations in the Pittsburgh region also suggests a racial disparity in who benefits, a lack of overall diversity and a contingent of employees who make low enough wages to qualify for public assistance.
The Pittsburgh region has thousands of nonprofits, and Bayer notes that the survey only reflects the state of organizations who responded. According to the survey, white or caucasian executive directors received an average of $124,824 in annual compensation, while Black or African-American executive directors received an average of only $107,087. A lack of representation, however, complicates the results.
When calculating median salary, the figure is $7,000 higher for Black or African-American directors, compared to white directors. But only 16 of the surveyed organizations reported having Black or African-American leaders, compared to 133 organizations with white leaders. Overall, Black or African-American workers made up about 17% of employees across the 185 nonprofits.
De’netta Benjamin, executive director of Sojourner House, a nonprofit that provides residential addiction treatment services to mothers, feels there is room for progress in promoting equity across both gender and race.
While happy with the closing gender pay gap illustrated by the report, Benjamin pointed to a 2020 study from the Program to Aid Citizen Enterprise [PACE], which found that nonprofits primarily serving communities of color are funded inequitably compared to those serving white or mixed communities.
“Because executive pay is tied to your budget, if we are funded inequitably, then we cannot expand our budget,” said Benjamin. “And that means that more African-American executives, especially if you serve a minority population, you’re going to be in a situation where your pay is not going to be equitable compared to others.”
Benjamin sees several opportunities for improvement. There could be more pathways to government funding or foundation money for smaller organizations, she said, and more support from big-budget organizations through partnerships.
“If you can get more support for operations, you can expand your capacity,” Benjamin said. “If you can expand your capacity, you can increase your budget and improve your pay for leadership and staff.”
A 2019 national survey from the Building Movement Project found that 22% of organizations led by people of color had budgets greater than $5 million, compared to 40% of white-run organizations. The report also asked respondents about financial well-being with questions about salary, bonuses or other increases, and whether or not survey respondents regularly provided financial support to family members outside their household.
Salaries themselves were fairly equal, but employees of color more frequently provided financial support to outside family members and also saw less frequent raises, bonuses or cost of living adjustments.
Anne Gingerich, the executive director of the Pennsylvania Association of Nonprofit Organizations [PANO], hosted the Building Movement Project at PANO’s annual conference to help local nonprofits address some of the problems exhibited by this data.
Specifically, she wants to understand why the lack of representation in nonprofit leadership persists.
“We need to figure out what it is that gets in the way of promoting people of color within our organizations,” Gingerich said.
In recent years, Gingerich said organizations have focused on diversity and equity training, but without creating more Black leaders. She doesn’t think the solution will come with more diversity training, though.
“Many organizations, over the last three years, have done more training on diversity, equity and inclusion, and yet that trend didn’t change anything [in executive representation],” Gingerich said. The 2019 survey from the Building Movement Project found that employees at white-led organizations felt there was less commitment to diversity, equity and inclusion efforts, compared to organizations led by people of color.
“If we’re not paying attention to cultural issues within the organization that may not be as welcoming to people of color, they may not feel as comfortable stepping into leadership roles,” Gingerich said.
‘Supposed to be role models’
Outon of the Bayer Center is also dismayed by the meager pay reported for some lower-level nonprofit employees. Of the nonprofits surveyed, 14% reported that they had at least some full-time workers who were eligible for public assistance benefits.
“That nonprofits would not value their employees enough for full-time work so that they would not need public assistance is a point of pain for me,” Outon said. “I think we are supposed to be role models in society in sticking up for social justice and fair treatment of people.”
Benjamin said Sojourner House uses the Bayer Center’s report to help assess if their organization’s wages are fair, she said. “We want to make sure that if they’re not, that we bring them up to the percentile that’s recommended in the Bayer study.”
The economic challenges of the COVID-19 pandemic mean that nonprofits face difficult financial choices. According to a 2019 report from the National Council on Nonprofits, 88% of all nonprofits have budgets under $500,000.
Gingerich thinks it could take some organizations nearly two years to fully recover from the financial hardships of the pandemic — and some may not survive.
She believes that financial stability for the nonprofits and fair wages for employees aren’t mutually exclusive goals. Achieving both may require temporary sacrifices, including scaling back services to increase pay.
“Our stance has always been that we understand the challenge of every nonprofit,” she said, “but employees have been seriously under-salaried for decades.”
Sophie Burkholder is a freelance reporter and can be reached at email@example.com.