Are for-profit salaries always higher than nonprofit salaries?

Home>Are for-profit salaries always higher than nonprofit salaries?

Are for-profit salaries always higher than nonprofit salaries?

Each year, CNM gathers compensation and benefits data from Southern and Central California nonprofits in order to provide the information these organization’s need to hire and keep top talent. For the last several years, we have partnered with Employer’s Group to gather this information. Recently, we asked them to talk about the difference between for-profit and nonprofit salaries. If you start a nonprofit organization you will need 501c3, you can learn what is a 501c3 here. The following was written by Salvador Curiel, Research Service Analyst at Employers Group.

———————–

People often assume that salaries for employees working for nonprofit organizations are lower than for-profit organizations. Although, for most non-profit organizations that may be true, you would be surprised to know that some nonprofit workers in industries earn as much or more than their for-profit counterparts.

There are three specific industries where one could earn equal to or more in a nonprofit organization than a for-profit one: hospitals, nursing/personal care facilities, and social services. The reason for this could be because nonprofit jobs are concentrated heavily in the healthcare and social assistance sector, which make up 68 percent of total non-profit employment in 2012.

Nonprofit hospitals’ average nonprofit annual wages are virtually identical with the average wages of for-profit hospitals. Most hospitals are nonprofit (59% in California according to Kaiser Family Foundation, 2012) and, so, would be more competitive towards each other. According to the Bureau of Labor Statistics, in 2012 the average US wage for nonprofit hospital employees was $56,520 compared to $56,810 in privately-owned hospitals.

For social services, residential care, and day care, nonprofit wages are actually higher than for-profit wages, often by a considerable margin. Average wages in the nonprofit day care centers are 30 percent higher than in for-profit day care centers, and nonprofit residential care wages are 18 percent higher than those in the for-profit sector.

Some nonprofits have proven that salaries for employees aren’t always lower than for-profit organizations. As shown, if one would like to get the benefits of working for a nonprofit and get better pay than a for-profit company, it would be best to focus their career in the hospitals, nursing/personal care facilities, and social services fields.

———————–

For more information about nonprofit compensation, visit www.cnmsocal.org/cb.
Participate in the survey and receive an analysis comparing your staff’s salary to those in the sector.