Dan Pallotta is the author of Uncharitable and has been writing columns for Harvard Business on how the current nonprofit model actually makes it nearly impossible for our work to be successful, an issue that is near and dear to my heart. His most recent article is about nonprofit pay. An excerpt is below:
In what can only be called an effort to maintain a culture of martyrdom, when all else fails, traditionalists argue that higher compensation offerings in the nonprofit sector will not attract better talent. This effort at argument is actually progress. They used to simply declare that it was immoral for anyone to make money in the nonprofit sector. When confronted with the notion that this might restrict progress, because higher salaries would attract leaders who can achieve greater impact for those in need, they resort to the argument that money makes no difference. People do this work out of love of humanity and receive psychic benefit in return. Money will only contaminate things, attract greedy people, and we wonʼt get any better impact. The worldʼs most urgent problems are immune to financial incentive.
Then they ask for data: "Show me where high salary packages have attracted better leadership." Clairvoyant data, I would call it. How can you show anyone data on the success of a practice thatʼs not permitted? The demand for data on a paradigm that doesnʼt yet exist is always the status quoʼs last defense. Itʼs an epidemic in the nonprofit sector. The sector requires data before anyone can sneeze. Imagine how long it would have taken to launch Disneyland in a nonprofit setting. Weʼd still be waiting for the data. But there are some data that might serve as a proxy. A Goldwater Institute paper on the merits of six-figure teacher salaries found that 7th grade South Korean students scored 21% better on math scores than their American peers, despite the fact that average South Korean classes are twice as large as average American classess — 49:23. They found that the quality of the teachers mattered much more than the class size.
Read the rest of the article here.