Backgrounds and bonuses: What do we know about not-for-profit leaders?

Dr Alexandra Williamson and Dr Tracy Qu explain what the 2021 Salary Survey tells us about the experiences and education that not-for-profit leaders bring to their roles, and whether their experience and qualifications are reflected in their salaries. 

The past 18 months have highlighted how global trends and crises play out in national and local spaces. Not-for-profit and civil society organisations undertake key roles, from advocacy to crisis-management, sector development and nation-building. Alongside these roles come questions related to their capacity to fulfill this wide range of leadership functions and to pivot to meet changing community needs. 

Leadership is highly relevant as communities face increasing demands on their ability to evolve and adapt, such as the COVID-19 pandemic, changing community demographics, and international calls to give voice and ongoing support to marginalised and vulnerable groups, as well as those that bring better health and richness of understanding to our lives. Not-for-profit leaders from across the diverse spectrum of the sector are instrumental in creating and inspiring positive change.

At the Australian Centre for Philanthropy and Nonprofit Studies at QUT, we are interested in exploring the ways that not-for-profit organisations of all types are pivoting to address rapid change locally, nationally, and at a global level. 

Working in partnership with the team at Pro Bono Australia, and building from their near-decade of expertise with the annual Salary Survey Report, we identified some preliminary research questions to investigate not-for-profit leaders’ work, and how their remuneration reflects their roles and experience. These research questions explore what backgrounds not-for-profit leaders bring to their roles, and how performance is recognised. 

The research questions

To this end, four new questions were included in the 2021 Salary Survey:

1. We asked about the education levels of not-for-profit leaders

Not-for-profit leaders bring to their roles varying levels of formal education. We considered: How does education level influence the remuneration of Australia’s not-for-profit leaders? 

2. We asked about the number of years worked in the not-for-profit sector

Not-for-profit CEOs and other leaders take different professional pathways to their leadership roles. This led us to query: Does the total number of years that Australia’s not-for-profit leaders have worked in the sector as a whole influence their remuneration? 

3. We asked about prior professional experience in the for-profit or government sector

Among their numerous roles, not-for-profit leaders may have worked in the corporate or government sectors. Here, we wish to explore: Does prior experience in other sectors link to differences in remuneration for Australia’s not-for-profit leaders?

4. We asked about bonuses, incentives, and performance targets for not-for-profit leaders

Alongside their salary, some not-for-profit leaders have bonuses and incentives linked with performance. We questioned: To what extent and in what ways is the remuneration of not-for-profit leaders related to individual, team, and organisational goals?

What we learned

Pro Bono Australia’s 2021 Salary Survey Report presents the findings from these questions, allowing individuals to benchmark against their own remuneration and career development.

The report is based on the responses of more 1,600 not-for-profit and social sector leaders. Of those, 1,068 answered these new questions regarding education level, tenure, professional background, and bonuses. These respondents’ generosity in sharing their information has allowed us to explore patterns in this new data, providing an understanding of the experiences and education that not-for-profit leaders bring to their roles, and whether their experience and qualifications are reflected in their salaries. 

The analysis so far has told us that:

• Postgraduate qualifications are valued in not-for-profit leadership roles, which is reflected in higher average total remuneration.
• Leaders usually receive increasing remuneration with an increase of tenure. However, in our sample, CEOs receive the highest remuneration when they have worked in the sector for five to 10 years, while CEOs who have more than 10 years of tenure receive less remuneration. This surprising finding requires further investigation.
• On an overall basis, prior experience in the for-profit sector and/or the government sector makes little difference to leaders’ remuneration. Nevertheless, it may be subject to particular not-for-profit sub-sectors and the length of prior work tenure.
• The percentage of CEOs whose current remuneration is linked with performance was split almost exactly half and half. More CEOs preferred a team performance target (63 per cent) than an individual performance target (37 per cent). 

Some next steps

As part of this research partnership with Pro Bono Australia, our next steps will comprise an in-depth analysis of data, with the intent to explore whether and how not-for-profit remuneration is associated (or not) with multiple variables at both the individual and organisational level. We also plan comparisons with for-profit remuneration in Australia, and not-for-profit remuneration internationally. We will seek to publish this analysis in a peer-reviewed academic journal article for the benefit of not-for-profit researchers worldwide. 

To find out more or to purchase your copy of the 2021 Salary Survey Report see here.