Term Paper on "Nonprofit Organization Management Issue Human Resource"

Term Paper 5 pages (1589 words) Sources: 1+

[EXCERPT] . . . .

Non-Profit Human Resources

One of the most crucial issues for non-profit organizations is human resource managements, as many non-profit organizations face many crucial challenges to employee recruitment, satisfaction and therefore retention. The causation and solutions to such problems must be addressed by the human resource function of the organization a department sometimes as lacking as the overall organization, itself in manpower and available resources for solutions. Non-profit organizations are in need of a redirection of efforts toward human resource management solutions, problems caused by poor recruitment, satisfaction and retention can seriously affect even the most well funded non-profit in its ability to fulfill its mission and serve its needy population.

One of the most important issues that arises in non-profit human resource management is the inability of many non-profit organizations to pay equitable wages for equitable jobs. This differential in pay is significant and may lead many individuals to seek profit or governmental positions as a result Comparable job often pay $40,000 a year in government or business may only pay $25,000 to $30,000 with a nonprofit organization. A twenty five percent salary differential is quite common and problematic. One of the only ways to combat this is to demonstrate a mission to the applicant that exceeds their desire to gain financially. Often times non-profit organizations combat this problem with the sorts of soft benefits that other organizations might not offer, like attempting to create a better work atmosphere and increasing the thankfulness of a job. Bottom line potential employees must be drawn to a job in non-profit for reasons other than economic, most notably a desire to serve the community.

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Another issue with special importance to a nonprofit organization is their funding source. By virtue of being non-profit most of these organizations seek and receive funding from donations, grants, membership fees and other non-profit sources. Because these resources often fluctuate, given the social and political climate of the nation, the non-profit may see less that expected in resources making the stability of the funding base in constant flux. The funding base associated with granting is particularly troubling as many granting institutions demand that 80-100% of resources be spent on programs, leaving little if any funding for overhead, which contrary to popular belief exists in much the same manner as it would with any business.

Paying employees and providing at least limited benefits is an overhead cost that many granting organizations prefer not to fund and it is most often not considered part of the programming function of the grant. Non-profits then must constantly seek other revenue or in kind donations to provide for the cost of overhead, including wages and benefits, not to mention concrete needs such as buildings and all it takes to run them. In fact there are many watchdog organizations who track the spending of non-profit organizations and report to potential donors the amount of funding spent on any given aspect including how much the used to pay their employees.

Those non-profits who are considered the best are those who maintain the lowest administrative overhead and the sacrifices needed to keep these numbers low can be seen in nearly every aspect of human resource management.

Cutt and Murray 118) One brief but common example of the type of thing being discussed here can be demonstrated through this quote from a foundation Q&a website, "We do not make grants for programs, or general organizational support or overhead." (Fortune Family Foundation, 2004, Website, (http://www.fortunefoundation.org/FAQs/FAQs.htm)

Fluctuating from year to year, such unpredictable revenue streams can create anxiety amongst employees, generate job insecurity and affect motivation. Not knowing if your job, or program will be funded in the next quarter or fiscal year can make anyone feel as if the rug could be swiped out from under them at any moment. Many nonprofit organizations operate as if they were in a permanent downsizing mode. Therefore, many bright, talented people may not attract to the work of nonprofit organizations and I think it's one of the major problems amongst nonprofit organizations today.

The YMCA is a nationally recognized community growth non-profit that provides services to thousands of people every year. As a non-profit their recruitment practices rely almost wholly on the concepts of their mission, rather than on the abilty of the organization to pay equitable wages and provide benefits for its employees. One example of this human resource problem can be found on the YMCA employment page, which offers jobs to degreed professionals for between 50,000 dollars a year and 20, 000 dollars a year. These recruiters seek employees who have even as high a degree as a masters of education yet can only offer compensation that shrinks in comparison to other jobs requiring this skill and education level. (YMCA National, Website, 2005, "National Employment Listings" (http://www.ymca.net/)

In one informative article the United Way of Putnam County Florida states that their yearly giving campaign generated a much lower allocation than the previous year due to the hurricanes which occurred in this giving season. There are thousands of united way organizations who have reported similar losses because of the sunami relief efforts as well. Domestic charities always lose funding when major local or world trajedies occur as the giving public often redirects their fixed amount of charitable giving to needs they see as more pressing. The funding discrepancy does not reduce the number of programs needing funding, as the United Way is an umbrella organization that funds other public service and education non-profit programs. The funding discrepancy often results in raise freezes and hiring freezes as well as a general reduction in employee benefits, rather than program scale downs. (Palatka Daily News, Website March 22, 2005, "United Way Shortfall Attributed to Hurricanes")

Organizations such as Head Start, often funded by federal and local governmental agency granting are often slated for not only cutbacks but even complete elimination, regardless of their history and success rates, which are shown to be very high. This leaves the human resource management for these organizations constantly scrambling for quality degreed professional to fill huge job tasked positions for less than 50 thousand dollars a year. One such recruitment bulletin can be seen at idealist.org, a national non-profit jobs search site. (Idealist.org, 2005, Website, "County Head Start Director II")

Goodwill industries, another non-profit in the community service business, is as well-known as almost any other non-profit organization. Their goal is workforce training and their answer to the difficulty in recruitment of top rated professionals has been answered by a rather controversial policy. The policy, to pay top rated professionals very large salaries to work for them. This policy is only possible because of the vast amounts of sales that Goodwill makes in its retail outlets. Many argue that the biggest problem with such policies is that it makes the organization very top heavy, where most employees, and even management level employees make minimum wage while regional directors can make in excess of 200,000 plus benefits. One example of just such a situation, would seem almost abhorrent to most individuals, as the regional director for Goodwill in Oregon received a compensation package that was almost 800,000 dollars for the year 2003. (Kosseff, November 17, 2004, Website, "Compensation jumps for top Goodwill exec: Michael Miller's total of $785,446 this year comes at a time of increased scrutiny of the nonprofit")

The scrutiny that is offered to organizations that make such decisions is likely to continue, especially in light of recent class action lawsuits against some large non-profit hospitals who charge uninsured individuals as much as five times that which insurance companies will pay for the same services for their clients and then aggressively seek payment from the uninsured individuals even to the extent of depriving them of everything they have.

It is not this writers recommendation that non-profits… READ MORE

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