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Home  > Article

Do Nonprofit Workers Really Earn Less?

By Erdin Beshimov

It's a common preconception that working for a nonprofit, and promoting one's socially-oriented ideals, involves a pay-cut. It is true that on average one should expect to earn less in the nonprofit sector than in the for-profit business sector. But do the averages tell the whole story?

The Bureau of Labor Statistics indicates that weekly wages for nonprofit organizations average $603.  By contrast, for-profit firms offer average weekly wages in the amount of $670, or 11 percent higher than in the nonprofit sector.  Furthermore, Federal Government employees earn on average $996 per week, or 65 percent more than in the nonprofit sector.  The average weekly wage for State government employees is $736, or 22 percent higher; and the average for local government employees is $ 668, or more than 10 percent higher. 

However, in studying the Bureau of Labor Statistics data, researchers Lester M. Salamon and S. Wojciech Sokolowski from the John Hopkins Center for Civil Society Studies identified an interesting trend that runs counter the common preconception. 

In sectors that include both for-profit and nonprofit organizations, nonprofit workers earn on par or even more than their for-profit counterparts.  For example, for nonprofit hospitals and nursing homes the average nonprofit weekly wages are virtually identical with the average wages of for-profit hospitals and nursing homes. 

For education, social services, residential care, and day care, nonprofit wages are actually higher than for-profit wages, often by a considerable margin.  Average wages in the nonprofit day care centers are 30 percent higher than in for-profit day care centers, and nonprofit residential care wages are 18 percent higher than those in the for-profit sector. 

Students considering a nonprofit career and planning out their financial futures should look carefully at sectoral, in addition to industry, wages.  This would help them avoid uncritically accepting the myth that nonprofit careers are less attractive from the financial standpoint. 

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