As I wrote about in the past, there are advantages and disadvantages of working for a large corporation vs. working for a small business. Today I’m exploring a different kind of workplace: the non-profit organization.
Non-profits can come in many different forms: religious and educational institutions, the government, and charities. For the purpose of today’s post, I will pretend as though government institutions are a separate entity, because they really do differ from charities and other non-profits.
1) Focus on a cause instead of profit
One of the most obvious advantages of working for a non-profit is that you get to be part of an organization whose primary focus is not to turn a profit. If you work at a non-profit that aligns with your passion to say, provide food and shelter to the homeless, your work may be more personally rewarding than working at a for-profit company. I know a number of people who work for non-profits that are deeply aligned with what they are passionate about in life and they find their work incredibly rewarding.
2) Flexible Work Arrangements
Non-profits may not be able to compete salary-wise with the private sector, but they are as a whole more open to alternative work arrangements. Whether it is working from home part- or full-time, allowing work outside the office at a coffee shop, or setups such as working four long days instead of five, non-profits are generally more flexible with where and when work is done.
1) Constant Fund Raising
Non profits often rely on donations from others, so there is a constant need to fund raise. When you look at a political organization, they are constantly trying to raise funds during election time – and sometimes all the time. Churches rely on people tithing and putting funds aside so that they can pay their bills and keep the electricity on. While some non-profits have alternative revenue streams (the church I go to turns a profit on their twice-a-year productions), there is no avoiding the need for voluntary donations from individuals and businesses.
2) Focus on Keeping Costs Down
There are a ton of non-profits and they are all competing for funding. What results from this is a need to keep costs down because it often is easier to keep costs down than to pursue new funding. Non-profits such as Feed My Starving Children love to state that only x% of all funding goes to overhead, because they become a more attractive charity to donate to. Imagine if only 10% of all funding actually made it to starving people across the globe and 90% went towards their offices and staff salaries. Would that be a charity you would want to donate to? I didn’t think so.
3) Lower Earning Potential
The ultimate thing that keeps an entire pool of talented individuals from working at a non-profit is the fact that there is lower earning potential. Imagine a church that paid all it’s staff $75k+. People would start to question whether the budget is too big for staff salaries and may reconsider donating money. Money spent on staff at non-profits also takes away from the causes that they were made to support in the first place.
Have you worked for a non-profit? How was your experience? Do you know of anyone else who works at a non-profit?
____________
Photo by Feed My Starving Children (FMSC)
Check out some of our favorite personal finance resources:
Are you getting the best credit card rewards? Check out the top cash back credit card offers (updated daily)
Make extra money: 15 ways to make money from your computer
Get the First Chapter Free!
Join our online community and get the first chapter of the book Student Loan Solution absolutely FREE!
The wages are a touchy subject. One of my friends is on the emergency response team (after earthquakes, disasters..) and I think she is really underpaid for the work she does. And even if you sit all day long in an office raising money, you should be able to have enough to pay rent and basics. Other people I know worked for stipends under minimum wage.
@RFIndependence I hear you on that, it’s a very touchy subject.
I have a friend that leads a non-profit and she is always one fundraiser short of losing her job. I don’t think I could live with that kind of uncertainty all the time. I also hate fundraising.
@Holly at ClubThrifty It would be a tough thing to deal with. It’s definitely a BIG trade off.
I worked for a non-profit for my first three years after college. You give some real good high level points. I absolutely loved what I did and could do it anytime I wanted, but the fundraising is a killer. I am not a natural salesperson and I think a lot of it comes down to that really. I would go back to it in a heartbeat, given the right situation but the fundraising situation would have to be a good one.
@FrugalRules Awesome to hear your insight. Is it easier to get businesses on board or individuals? I know a lot of corporations donate to non-profits.
I actually don’t know anyone who works for non profit. I know its a good thing to do and all, but ultimately it comes down to money for me. I want to get ahead financially and the best way for me to do that at the moment is to maximize my earnings from my job, unfortunately non profit isn’t where the money is.
@MonsterPiggyBank And that’s the main reason why non-profits are always looking for talented individuals – a huge % of them won’t even consider the sector.
I never have and I only have a couple of friends who currently do. I hate to say it, but I would work at one but money is a playing factor for me. I have a house and student loans to pay for and want a stable income.
@SenseofCents The money thing is clearly the biggest drawback for most people. It’s hard to know your earning potential is pretty much capped at x dollars from the get-go.
I haven’t worked for a non-profit but I think It would be much better than working for a large For-Profit corporation. The only downside is that you have to not care about how much you get paid. Not for me :-) I would rather volunteer a few hours a week to give back.
@OneSmartDollar Donating money can be fulfilling as well, there are a ton of organizations ready to do really great things if they could just get the funding.
Have you worked at a non-profit? I never have, but considered it in the past. I’ve never considered constant fund raising as a factor when I thought about looking for a non-profit employer. Hmm, not that you mention that, it could get annoying quickly.
@Veronica @ Pelican on Money I have not, though I know many who have. Some organizations are set up where a few people focus on fundraising, and the money they raise supports the entire organization. But the fact is, there is a ton of pressure on those individuals.
I’ve spent most of the last 15 years working for non-profits. The two that I currently work for both provide an above average wage for the city that I live in. One of the two is unionized, and the other had a union vote, but it was voted down. Both are also large enough that I have never had to deal with fundraising in my positions, as we have staff specifically for that task.
@canadiancindyb That’s a great point that I should have included. Some non-profits have a staff dedicated to fundraising so the rest of the organization doesn’t have to worry about it.
I’ve worked for a non-profit before and I did really like the work and knowing I was contributing to something worthwhile, but the lower earning potential was a big set back.
@momoneymohouses The lower earning potential is probably the #1 reason people decide to NOT work for a non-profit.
I’ve done volunteer work for a non profit, but never worked as an employee.
I love organizing events. We have a Ronald McDonald House close by and I’ve often thought of applying for a job with them.
The thing about many non profits is that you do walk away feeling like you are working on a good cause, as you said, but often it can be stressful and sad when something goes wrong. For example, if you worked at a pet shelter and pets had to be put down because they weren’t adopted, or if you worked at Ronald McDonald House and one of the families lost a child, it would be very hard to deal with, I think.
I know people who work for non profits, and they don’t do it for money. Lots of positions are grant funded, which is very unsecure. I admire them, but don’t think I’d like the uncertainty of it. I’d rather work for money at a for profit business and volunteer with non-profits I believe in.
I work for a non-profit company – the pay is decent, and up until reading this post I haven’t questioned my job security. We seem to rely heavily on grants which I guess has been working (this is the first year in the four that I’ve been here that we’ve hired a person to do our fundraising).
For me, the biggest “disadvantage” in my current position, with my current employer is that we don’t seem to be focusing on the cause anymore. (Or at least not nearly as much as we used to.) It’s almost like management has found that point where we do just enough to keep getting grants and funding, but no longer need to be innovative or really try harder…