Contemplations on Compensation : Successful Nonprofits

Contemplations on Compensation

by goldenburggroup

Contemplations on Compensation

by goldenburggroup

by goldenburggroup

Our parents taught us about the birds and the bees, but most parents rarely teach children a much less natural part of life: negotiating salaries. Additionally, colleges and graduate schools typically don’t offer courses in negotiating salaries. Consequently, we’re far too often thrust into the professional world with limited experience and tools to negotiate our salaries.

For folks who only change jobs every 5 or 6 years, it can take decades to figure out how to negotiate salaries in an effective and productive way. As an example, I’ve had five professional jobs since graduating from college and in retrospect ech transition helped form these “contemplations on compensation”:

Contemplation #1: The best time to negotiate is before you take the job!
When negotiation salary, trade your life for the most you can (legally) earn doing what you love.  Toward this end, always ask for more than the amount offered because your leverage is highest before you accept the job. When offered my first professional job out of college in early 1994, the executive director offered me a whopping $20,000 a year (about $32,000 in today’s dollars).  My rent was $280 a month, this was more than I’d ever made before, and I was expecting to be offered only $18,000. Unfortunately, I didn’t ask to think about the offer and I didn’t ask for $22,000, I just said “yes.” I would make that mistake a few more times before learning better.

Contemplation #2: Taking a pay cut now can cost you hundreds of thousands in retirement

Don’t be willing to take a paycut – no matter how much you want the job. After four years in my first job, I had the title of Development Associate, supervised a grant writer, and was well compensated for the position at $44,000 a year. But I was ready to be a Development Director, and the organization I worked for had a Development Director who seemed happy and unlikely to leave anytime soon. For this reason, I launched a job search and one smaller homeless organization seemed like a good fit. Everything about the job seemed right but the salary was significant lower than I was already making. My household expenses were low, and I knew that I could live on less than I was making. They convinced me to take a $10,000 pay cut without me getting a commitment for a significant salary increase once I’d proven myself. My passion, heart, and ambition for more responsibility caused me to take the leap in a job paying significantly less. That was 18 years ago, and assuming that my salary has lagged about $10,000 a year for that entire period – the decision has cost me $180,000.  That’s enough to buy a modest house in suburban Atlanta or 5 Toyota corollas.

It’s one of the few career decisions I genuinely regret, and I wish I would have said this when negotiating with this small homeless service organization:

 “I’d love to work for you, and I will bring significantly more than $34,000 of value as your Development Director. I’m taking a risk by going from an established organization to a smaller one, and I need you to take a risk by paying me what a development director should make at this size organization. What arrangement can we agree to that will meet both our needs?”

Contemplation #3:

After you’ve negotiated salary – forget about your salary – you no longer work for the paycheck. In fact, work as if you are paid a million dollars per year – which is still less than the value of 2,000 hours of life. Whenever I’ve gotten hung up on my salary, it’s impacted my attitude, enthusiasm, and overall happiness in both the job and in life.  From an employer’s perspective, people who hold a grudge about their salary often become toxic employees and the situation rarely ends well for anyone.

Contemplation #4:

Don’t ask for a raise without first sitting down with your boss and creating a roadmap to the raise. If, for example, you believe you deserve a $10,000 raise, at a scheduled meeting say the following to your boss:

“I think my value to the organization has increased because of [reason you deserve one] but I’m not going to blindside you by asking for a raise now. Instead, I’d like to learn the contributions I can make, commitment I can demonstrate, and goals I can achieve that would warrant you giving me a $15,000 raise in 6 months [or 12 months].” 

The vast majority of bosses will appreciate your candor, willingness to prove yourself, and flexibility in wanting to meet the organization’s needs. This will start a conversation that may unfold over the course of weeks and will hopefully result in a roadmap to the raise you deserve. Of course, once that roadmap to a raise is created, it’s up to you to exceed expectations and keep your boss in the loop on your progress in a diplomatic way.

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