Compensation benchmarking for Charitable foundations: setting pay without a founder's guess
Pay in a foundation is often set by what the founder feels is right, or by comparison with a family business. Benchmarking gives trustees a fair range and staff a reason they can understand.
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Share your requirementsWhy compensation benchmarking matters in charitable foundations
A programme officer in a family foundation may be paid like a junior manager in the family firm, while a colleague hired later from an NGO is paid differently. When staff compare, which they do, the gaps cause hurt. The board asks what is fair, and nobody can give a clear answer. New hires push for the top of the range or refuse an offer, because the foundation cannot explain its pay.
Benchmarking compares each role with similar roles in comparable organisations: other foundations, larger NGOs, CSR teams and consultancies that hire the same people. It gives a range, not one number. The board then decides where to sit in the range and why. It may choose to pay lower than corporate bodies because of the mission, but to match NGOs, and say so openly.
How to set it up
1. Define the roles clearly
Match each job to a one page description with its main duties and level. Benchmarking only works if the roles are comparable.
2. Choose comparison groups
Pick three groups: peer foundations, larger NGOs and corporate CSR teams. Note the size and location of each.
3. Gather pay information
Use trusted contacts, published reports and recruiters, and note the date of the data. Treat numbers with care and look at ranges.
4. Place your roles in the range
Decide where the foundation wishes to sit, such as around the middle of NGO pay, and apply it consistently. Note the reasons.
5. Explain to staff
Share the structure, though not necessarily every salary, and how a person moves within it. Combine with a note on non-cash features such as flexibility and learning.
Check these first
Before changing anything, find out what is true today. These take an afternoon and use your own records.
- List officers with similar roles and compare their pay and years of service.
- Ask the last two hires how they judged your offer against others.
- Check whether trustees can state the principle behind your pay choices.
- See if pay was reviewed in the last two years and what was used as evidence.
GullyHR can do this with you. Read how we approach compensation benchmarking in general, or share your requirements and we will tell you where to start.
Questions owners ask
Not necessarily. Many choose to sit between NGO and corporate pay, balancing mission against the need to keep skilled people. Whatever you choose, state it and apply it consistently.
Use contacts in peer foundations, sector networks and recruiters. A few reliable data points per role are enough to see a range, and you should note that sample sizes are small.
You need to explain how pay is set and how people can move up. Sharing each salary is a separate decision. Open principles reduce suspicion even if individual numbers remain private.