Let’s Be Clear: Salary Transparency and the Nonprofit Sector

General

Feb 14

By: Kim Gaudin De Gonzalez, Women of Color in Fundraising and Philanthropy®

By May 2022, any employer posting a job ad in NYC will have to post the minimum and maximum salary ranges under law. The state of Colorado is the only other place that demands this amount of transparency in job listings, based on a law that went into effect in January, 2021.

Our WOC job board embraced this policy in 2021 and you won’t find a job posting here without the salary range being offered. WOC founder Yolanda F. Johnson believes so strongly in the idea of pay transparency that she spoke before the New York City Council Committee on Civil and Human Rights on this issue in December, 2021, just before the law was passed.

“Salary transparency is a key tool for ensuring a more equitable workforce for women in the development profession,” Ms. Johnson said. “This bill will help close the wage gap—because according to labor data, women earn 82 percent of what men make, and women of color are earning a lower percentage than that.”

Ms. Johnson told the committee about the pushback she received when she implemented salary transparency on the WOC job board, and also on the Women In Development job board. Ms. Johnson is also the first Black president of Women In Development, New York. “So recruiters would say ‘my client can’t (list salary range) because we are underpaying other people too much and we don’t want the other team members to know and become disgruntled’”, Ms. Johnson said. “Other people were putting in random characters to not have to go through with salary transparency. But ultimately, we prevailed.”

Who wants to spend time doing all the work of applying for a job that would never be a sound financial decision for them?

Ms. Johnson said she had experienced pay inequity in her own career until other people gave her guidance. “In the nonprofit sector we often suffer from guilt because we’re trying to get the ‘good work’ done and therefore sacrifice our own well-being and our own needs. Many in our sector, especially women, actually are just one to two paychecks away from being in the same situation as many of the constituents they serve.”

“I understand budgets can be an issue for a nonprofit organization,” she said. But she suggested organizations look at overhauling fundraising practices, strategy and income stream diversification. Because what we know for sure is that the nonprofit sector which endeavors to create a more just and equitable society cannot accomplish this work off the backs of underpaid professionals.”

She said potential candidates deserve the efficiency that comes with knowing salary range in advance. It just makes good sense, she said. Who wants to spend time doing all the work of applying for a job that would never be a sound financial decision for them?

Johnson said it will give job candidates a tool in negotiation and protection against the lowballing techniques employers sometimes use. The law will create a need for HR departments to research salary benchmarks and prepare to be competitive.

Johnson believes employers will get applicants who already know the salary and are still interested in the job. This can make the while hiring process run more smoothly and result in longer-standing and more rewarding and successful employer-employee relationships.

Many in our sector, especially women, actually are just one to two paychecks away from being in the same situation as many of the constituents they serve.

The New York State Senate is weighing the possibility of a state-wide bill. Two states, California and Maryland require employers to provide pay scale at an applicant's request after the applicant’s first interview. Two cities, Cincinnati and Toledo mandate disclosure after a conditional offer of employment. Washington state requires pay scale disclosure to internal and external applicants if the applicant is offered the job and asks for the pay scale.

However, apparently, employees rarely ask for pay scale.

Last year, Colorado, Nevada, Rhode Island and Connecticut mandated that companies must proactively disclose pay scale at various points. Each state’s law is nuanced.

Several other states and even the European Union, are mulling over pay scale legislation.

“Organizations are going to need to be on top of this, especially during the Great Resignation,” Ms. Johnson said. “There’s a direct link between employee retention and pay transparency. It’s going to require strategy—measuring and assessing pay gaps, making sure the employee’s starting pay is right every time, and reforming pay practices.”