12.1 Should compensation for equivalent jobs be lower in the nonprot sector than

Question

12.1 Should compensation for equivalent jobs be lower in the nonprot sector than in government or the for-prot sector? When is this appropriate? Why or why not?

9.1 1. Are there common characteristics desirable for all nonprot board members? If so, what are they? Beyond any common characteristics, what types of diversity should be sought for a board?

10.1 1. This chapter argues that there are dangers in having a very powerful and dominant executive director. Do you agree with this argument? Why or why not?

Explanation / Answer

12.1 Compensation for jobs in the non-profit sectors should be lower than equivalent jobs in the profit / goverment. The non profit sector is severly constrained by the availability of funds and hence they find it very difficult to match the industry levels of compensation. Also, the non profit companies are tax exempt and the IRS takes strict exception to overpaying people. It may even lead to the cancellation of the tax exempt status. The flip side is that they would be unable to attract quality talent unless the compensation is right. The levels of compensation need not be equal to the industry standards of the profit sector but there should be a target to reach at least a fixed level of the industry standard (say for example 30 percentile of the industry standard). People willing to join the non profit sector also look for job satisfaction and working for the greater good and expect a compensation that is enough to take care of their basic requirements. They would rather have the money utilized in projects that are closer to their objective of the non profit organization

9.1.1 There are common charachteristics for all non profit board members. These include

Apart from the common charachteristics, the board a non profit board should look for diversity in the areas of specialization of board members. These could include areas such as finance, HR, operations and marketing. There should also be a mix of people who have had prior board room experience. Diversity can also be sought in the regions of world where the board members have operated. This helps in bringing a more holistic perspective and also helps in case the organization decides to move into projects on a global scale

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