Hiring for Nonprofits: How to Find Good Staff When You Have Little Cash

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Hiring for nonprofits is not the same as hiring staff for a profit corporation. For one thing, you'll be working with substantially less money in your personnel budget than a private company of comparable size would have available. So how can you find and retain good quality people when you can't compete with the salaries, stability and perks available in the corporate sector? You'll need to think outside of the box and look at some alternative staffing sources to find the right people to fill the critical positions. Let's have a look at a few non-standard employment relationships:

1. Find people who will work for free.

Start with the directors of the organization. Your Board members are already working for free, and are obviously passionately devoted to the goals and objectives of the organization. Find out if any of the directors have any additional time they can donate to the cause, especially for tasks that can be done in just a few hours a week. However, you need to be mindful of avoiding terminal burnout of the Board - these are the most important advocates for the organization, you can't afford to lose them.

Another source of free labor is volunteers. Every successful nonprofit depends on its core group of volunteers - they are usually the unsung heroes, the people who spend the most hours doing the largest percentage of the work just because they care. Check with your local media to find out if there is a volunteer database that you can access. If not, then put up posters, distribute leaflets, do a community TV segment about the organization, and set up social media pages with information on how interested volunteers can contact you.

2. Hire passionate people who will work for less money to benefit the cause.

Retirees are a good resource for nonprofits. They have built up a lifetime's worth of skills and experience that you can draw upon, and they will often work for less money. Look for people who would rather work for a nonprofit than for a regular profit-oriented business - these folks have the "volunteer spirit" but can't afford to work for nothing. Because of their passion for the cause, they will often  be willing to work for a wage that is below what they would make in the corporate sector, as long as there are other advantages which offset the lower wages (benefits, swing time, daycare, etc.)

 3. 'Borrow' employees from another organization on a job-share basis.

Look for opportunities to share the services of a bookkeeper or other employee with another nonprofit, or with a for-profit corporation. If your organization has charitable status, you may be able to claim this as a tax-deductible charitable contribution. Job sharing allows everyone involved to benefit - several nonprofits all have access to the employee's skills and expertise, at less cost, and the employee earns the same wages (or more) as he/she would earn working for for-profit businesses.

4. Hire independent contractors whenever the situation warrants.

Certain projects will only require staff for the duration of the project. Retaining those staff as independent contractors instead of employees will save the organization a significant amount in terms of payroll taxes and withholdings. However, it's a good idea to discuss this with a lawyer to make sure that your contract is clear as to the terms of the engagement, and what the legal ramifications of renewing the contract may be. A court may consider an employee whose contract has been renewed several times to be a permanent employee. Independent contractors can also be retained on a full-time or part-time basis. Because they are self-employed, they are responsible for their own taxes and withholdings, and they generally are not eligible for holiday pay, sick pay, or other employee benefits. It's important to know what the legal distinctions are between an employee and an independent contractor.

5. Offer flexible work options.

Flex time / swing time is a very attractive alternative for people who want to work but are only available during certain hours, for example, a stay-at-home mom who can only work in the morning while the child is in kindergarten. Flex time also works well for students, whose course schedules may be different from day to day. Mobile technology makes it very easy for people to work remotely from home, which has a great appeal for many employees, particularly those with small children, aged parents, or other dependents.

6. Check out internship and co-op placement programs that will fund part of the salary costs.

Students seeking work experience will often apply for jobs with nonprofits through a college or university internship program or a government-funded work program. Many of these programs offer a wage subsidy as an inducement to the employer. These programs can be a good source of temporary personnel, and the subsidy will offset the wages. On the down side, these employees are often only available during the summer when school is out.

Things to consider before you hire.

• If you're considering retaining an independent contractor, it's important to understand that it's against the law to do so just to avoid the higher costs of hiring that person as an employee. If a court determines that the person is in fact an employee and NOT an independent contractor, there can be serious legal and tax penalties.

• You should always use a written employment agreement, to clarify in writing what the terms of employment are. Have a lawyer review your contract forms and your hiring process to make sure they comply with current employment laws. You should also have your volunteers sign a volunteer work contract.

• Conduct a hiring needs assessment to determine the true needs of each position. You may find that you need fewer people in one department than you originally thought.

• Determine a salary pay scale for each position, based on the relative worth of the position to the organization. This will help ensure that all employees are compensated fairly, and will also allow you to see if the organization can afford to hire for each position, taking into consideration salary increases, cost of living adjustments, benefits and other employee costs.

Now that you've hired them, you need to keep them.

Most nonprofits implement a combination of employment relationships - full-time and part-time, temporary staff hired for specific projects, independent contractors, interns, and other contingent (as needed) workers. This mixture affords a nonprofit the opportunity to employ individuals with specialized skills at a significantly lower cost. However, the turnover rate is high and there is a lower degree of employee loyalty due to lower wages and a lack of job security. High turnover rates can create difficulties in maintaining continuity of information and knowledge on each change-over in a position. And because nonprofits are often understaffed to begin with, remaining staff are burdened with the additional responsibilities of training, supervising and mentoring new employees.

On the upside, most nonprofit employees have chosen this career because they are passionate about the work they do and the cause of the organization they work for. They want to create social change, provide valuable services, and attain the goals that are part of the organization's mission. Make sure your employees know how much they are valued. Include them in meetings and policy development. Keep the lines of communication open, and encourage their input. Above all, listen to what they have to say, because your employees are not here for the pay and the benefits - they're here to make a difference.