Non Profit Salaries and Benefits
In our last post… we made the claim that there is extra money in the salaries and benefits budgets of churches and non profits.
When a staffing need presents itself, there are always two options. Find a volunteer, or hire an employee. The default has become to waste money by hiring someone. Why? Here is the thinking…
First - If we pay someone, then the job becomes desirable.
Second- We need to pay someone the going market rate for that position.
Because they have experienced positive results in doing this in the past, they assume that it is working. They are wrong. It is not the money that brings the success…it is the process.
Think about it for a moment. In order to hire a person, you go through many specific steps. You determine the need, formulate a job description, look at resumes, interview candidates, and work out the employment details. You work hard to find the right person. Of course it works - you put a huge amount of time and energy into filling the position.
For a volunteer , there is typically an announcement in a newsletter or website stating the need for help with something. The description is usually broad and unclear. The hours and duties are flexible (unclear) because they “don’t want to scare off” a potential volunteer. They end up with people that are looking for something to do, and like the flexibility that you have communicated (low commitment) and they take advantage of it…
After a while the boss complains about the lack of commitment from the volunteer and convinces the board to go for the hire. It is not the volunteers fault it didn’t work…it is the organizations.
If they simply went through the same process for finding volunteers as they do for hires, they would have great committed volunteers who would do the job for free (or close to it).
Most organizations are wasting huge amounts of money by paying people to do what others would be glad to do for free. And it is because they are lazy.
Non Profit Budgets in a Tough Economy
When the economy gets tough, churches and nonprofits are some of the first to feel the pinch. Both groups often live on thin budgets to begin with, and when the income slows down - it can get really difficult to make it. There are numerous articles out there (here, here, and here) on how to make you money go further, but quite honestly, they are sugar coating the problem.
Here is the uncomfortable truth: Churches and nonprofits waste tremendous amounts of money.
Each year, they go through the same budgeting process whether the economy is good or bad. They take last years budget numbers , decide what % increase is reasonable, and then try to get the budget to reflect that amount. The problem is that no one is going back to the initial basis for the budget. I have yet to see a budget for a church or non profit that doesn’t have a tremendous amount of waste built in. And the people building the budget KNOW that!
So if that’s the case - how do yet get ready for building next years’ budget?
First - Don’t let the people who are spending the budget build the budget. That is like asking my 10 year old to figure out how much candy he wants.
Second - Get the people who spent the money to justify each expenditure they made. It is very different to explain why you spent than why you want to spend.
Third - Have your board (or board reps) look over that information and decide which of those expenditures actually moved you forward in your mission. You will be surprised by the results of that action.
Fourth - Build a budget based on expenditures from last year that moved you forward combined with known unavoidable increases (insurance, membership fees, etc.)
You may notice that I have not addressed salaries and benefits — That will come next time! And there is a lot of extra money to look at in those 2 categories!
The Shadow Knows…
I was recently given a book by John Ortberg entitled Overcoming Your Shadow Mission. The basic premise of the book is that individuals and organizations have a stated mission, but that in reality they also have unstated missions. Ortberg states” noble missions will give rise to noble thoughts and shadow missions will produce an inner life of darkness and destructive discontent. Shadow missions always destroyed at least one person, the person who lives for them.”
I’ve seen this in my work with churches and nonprofits. Shadow missions usually answer the questions that people are asking in the parking lot after a meeting. You may have been part of one of these conversations. It usually begins with one person saying “you know what I don’t understand…” then the conversation ensues and usually involves agreement about mission and a lack of understanding about what is being done.
Shadow missions are often based on the ego needs the leader or board members. The stated mission of the organization may be to meet the physical needs of children within the community. But on the board of directors you may have someone whose inner desire is to run for elected office. Their need for publicity and recognition can drive the decisions are made instead of the mission. Children become the vehicle for the shadow mission, instead of the mission focus.
An effective leader needs recognize his/her shadow mission. They need to be able to understand what truly drives and motivates them. With this knowledge, they will have the insight to avoid the destruction the comes from following shadows.
