This is the third of a four-part series,
Empowering Change: Exploring Sustainability and Social Impact at Home Suite Hope
by HSH Executive Director Sara Cumming, PhD
Welcome to our third blog post in our four-part series brought to you by Executive Director, Dr. Sara Cumming. As our organization navigates through the ever-evolving challenges of funding, Dr. Cumming aims to address the queries surrounding our surplus and fundraising endeavors. Join us as we delve into the intricacies of Home Suite Hope's financial position, exploring the factors influencing our grant applications and donation drives amidst increasing reserves. Through this series, we endeavor to uphold transparency and offer insights into the financial dynamics shaping our mission.
In the first Blog, Surplus for Sustainability: The Profit Paradox in Non-profits, our ED discussed the importance of long-term planning with our finances to ensure we can provide our participants their full wrap-around supports throughout the four years of their programming. In the second blog, Breaking the Cycle: The Long-term Cost Savings of Supporting Single Parent Families, we discussed the full costs and supports of Homeward Bound Halton and our other program supports. In this third blog, Sara dispels the misconception that our staff costs our outgrowing our programming costs. In this post, Navigating the Complexities of Not-for-Profit Salaries and Mission Fulfillment, Sara discusses the costs of running our programming with an emphasis on the long-term savings to the community and government.
The determination of not-for-profit (nfp) salaries should not solely be guided by high or low figures, but rather by the qualifications, expertise, and education essential for advancing the organization's mission.
In the competitive landscape where charities vie for talent against businesses and governmental entities, offering reasonable wages becomes imperative to attract and retain competent individuals. While many charity workers are motivated by the intrinsic rewards of contributing to a noble cause, undervaluing their worth risks compromising the effectiveness of the organization's programs.
Neglecting fair compensation for lower-level employees can prove more detrimental than overpaying top executives (which we assure you is not happening at HSH), leading to turnover costs and loss of valuable institutional knowledge.
Unfortunately, some underperforming charities exploit donors' fixation on low salaries by keeping staff compensation minimal while channeling significant funds to external fundraising firms or costly consultants. This allows them to obscure overhead costs rather than attributing these expenses to specific employees.
While excessive compensation should be avoided, it's crucial to recognize the value of competent leadership. Even smaller organizations require highly-skilled professionals such as researchers, social workers, accountants, and fundraising experts, necessitating salaries that may seem substantial in absolute terms or as a percentage of the budget to donors. Ultimately, striking a balance between fair compensation and effective resource allocation is vital for charities to fulfill their missions efficiently.
There’s a prevalent misconception surrounding not-for-profits that regards money allocated for employee compensation and benefits as disconnected from the organization's mission, which is utterly unfounded. In reality, the bulk of paid nfp workers dedicate their time to executing programs directly aligned with their group's mission. Similarly, there exists a false assumption in charity finance that administration expenses are invariably categorized as overhead rather than program expenses. For a great discussion of all of the above review the following Debunking Salary Myths.
We face a delicate balancing act in determining employee salaries and benefits. On one hand, we must navigate concerns about potentially offending donors by offering salaries perceived as excessive. On the other hand, we must ensure compensation is sufficient to attract talented and committed individuals essential for accomplishing our mission.
Home Suite Hope is growing in compensation-related expenses (employees/internships/benefits). At first inspection, a potential donor may infer that too much of our fundraising is directed at staffing. Our current staff includes an Executive Director (me—Sara Cumming), Director of Operations (Catherine Villasenor), Program Manager (Nikkian Hanson-Daley), two part-time Case Workers (Temisha Jacques and Haley Weber), part-time Program Coordinator (Jovelle Reid) Administrative Assistant (Angela Blackburn), and Marketing and Events Coordinator (Katelyn Zaoral). We also have several individuals who work with us on different contracts. Izabel Rader is our long-time Bookkeeper, we have an in-house Psychotherapist who provides our clients with direct mental health supports without waitlists! We have a Grant Writer who we contract when we need support applying for sustainable funding. We also have an Auditor and a Lawyer who support us as needed. In addition to this staff, we attempt to offer as many internships as we can to students annually and offer benefits to all of our full-time employees.
Grant applications often ask us one of two questions, with one of them being more detrimental to us than the other. The question, “What percent of your staff salaries goes directly to programming” is the proper question! We have an equation we use to figure out how much of each person’s job is directly related to the programming we offer. When we did our charity return in 2022 that number was 72 percent. The rest of the salaries are split between administration, volunteer costs and fundraising. The question I am less a fan of is “What percentage of your overall expenses is related to personnel.” The answer to that question is that it is currently hovering around 50 percent. The truth is that we are penalized (ie don’t receive funding) for this answer and there is rarely room for any type of explanation.
These challenging questions regarding staff salaries, highlight the need for transparency and justification. The focus on percentages fails to capture the nuanced approach to resource allocation, leading to potential misunderstandings!
a) We are a living wage employer (see HSH is a Living Wage Employer).I cannot fathom working with a group of such dedicated, hardworking women who put their blood, sweat and tears into helping disadvantaged women move out of impoverished circumstances while paying them poverty wages. It is wrong on many levels!
b) Home Suite Hope attracts highly-educated individuals who bring a wealth of knowledge to the organization. The clients in our program are at least in part so successful because of the strategies and techniques that our frontline workers can provide. The type of case management we provide at Home Suite Hope is very different than in a traditional not-for-profit in that we are providing intensive wrap-around supports. Our case workers must be experts at many topics simultaneously and are intrinsically linked to the participants' day-to-day lives (See past Blog on funding and HSH Staff).
c) Over the past three years our Board of Directors' Human Resource Committee has done an extensive analysis on not-for-profits of similar sizes with similar budgets across the GTA. We have aligned our staff salaries to be just slightly above the average.
d) Forward thinking organizations need to be strategizing and growing all the time. We have almost doubled in revenue and programming in the past six years, and this has been made possible mostly through concerted marketing, events, and fundraising efforts. Movements of this magnitude take staffing; they cannot be accomplished off the side of someone’s desk.
e) Lastly, and perhaps most importantly and least discussed, we at Home Suite Hope have worked very hard to become community collaborators. We have worked to embed HSH into a network of care and support and as a result have many services that we used to pay for on behalf of our clients now provided as in-kind supports. If you read our last blog (Breaking the Cycle: The Long-term Cost Savings of Supporting Single Parent Families) on the costs of our programming, you know the resources that Halton Region, Sheridan College, the YMCA and others give through in-kind or direct-to-client costs. The partnership with Sheridan College alone has allowed us to redirect tens of thousands of dollars a year directly to the participants. However, none of these salary justifications are taken into consideration.
The burden of justifying personnel expenses creates a Catch-22 scenario. While trimming staff costs might make the organization more attractive to donors, it would inevitably diminish the quality and scope of services provided. The reliance on volunteers, while invaluable, cannot substitute for the expertise and reliability of paid staff.
The complexity of charity salaries and mission fulfillment requires a nuanced understanding of the interplay between financial management, organizational goals, and community impact. By prioritizing fair compensation, acknowledging the value of skilled professionals, and fostering transparent communication with stakeholders, not for profits should be able to navigate these challenges while staying true to their missions. It's imperative for donors and funding agencies alike to recognize the holistic approach to resource allocation undertaken by nfps like Home Suite Hope, ensuring sustainable support for their vital work in the community.
Please watch for the final Blog post in this series appearing Fridays throughout April.
To contact Sara, email SaraC@homesuitehope.org
To donate via CanadaHelps, click CanadaHelps