How to Fund Your Salary Without Feeling Guilty: Staff Compensation for Longterm Sustainability

Nonprofit does not mean no profit, but this myth is perpetuated when you don't take a salary. Nonprofits should make the same or MORE than for profit leaders. Say no to the nonprofit poverty cycle and start paying yourself first because it sends a message that your work is valuable. Shift
the mindset from "taking from the cause" to "sustaining your leader". Learn how to build your Salary into the budget and grant.

Episode 153 | How to Fund Your Salary Without Feeling Guilty: Staff Compensation for Longterm Sustainability

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Speaker 1 (00:01):

Why do nonprofit founders feel shame around getting paid? In this episode, I unpack the roots of that guilt and teach founders how to ethically and strategically fund their salaries without an apology.

Speaker 2 (00:15):

Welcome to On Air with Amber Wynn, where nonprofit leaders learn to fuse passion and commitment with proven business strategies to create long-term funding impact and sustainability. And now here's your host and resident, Philanthrepreneur Amber Wynn.

Speaker 1 (00:41):

All right, you guys, let's jump into it. So there is the founder's perspective and the funder's perspective, and in the middle, they shall meet. It doesn't happen for a long time, and I'm here to try and close that gap because there's a lot of misconception around the nonprofit sector, and one of those misconceptions is about how to fund your salary without feeling guilty. One of the things that I ask my clients when I'm talking to them is like, are you getting paid? That's one of the first questions I want to know because as you know, my purpose, my reason for being is to take care of you. My nonprofit executive directors, there's nobody out there taking care of you. I already know because when I was an executive director, I experienced the loneliness of being an executive director. People look to you like you know what you're doing and you're doing the best that you can.

(01:37):

Mostly, you're making it up, but you're doing the best you can. The reality is though, you're trying to keep your organization afloat, and so what happens is you don't pay yourself. You put all of the money, and in the beginning, it's not a lot into your organization. Today I'm going to talk to you about why your primary focus should be on funding your salary. When we come back, we're going to dive into why underpaying yourself is first of all not sustainable, and then two, why it's a disservice to your mission when we come back. Have you been duped by a grant writer promising you the moon and the stars, but after collecting your $2,000, you never win a grant? No. A grant writer can't guarantee you'll get funded, but if you don't know how to vet them, you could walk right into a scam. Check out my guide the questions to ask a grant writer before you hire them to help you determine if a grant writer is a bonafide professional or out to steal your hard earned money with no intentions of yielding results.

(02:41):

This guide explains what to look for in a grant writer if they're novice or seasoned, if they're fit for the type of proposal you need written, what questions they should ask you. Leverage my 25 years of grant writing experience securing over $10 million in grants for clients to help you find a qualified grant and reduce your chances of getting scammed. Order your copy today. Welcome back to On Air with Amber, and today we're talking about something that's really serious and really important to me, and it's about how founders can fund themselves. Why should you be getting paid a salary without feeling guilty? Let's jump into it. Number one, it is unsustainable. I have nonprofit leaders who work their nine to five, their day job, and then they work their nonprofits. That is not sustainable. My goal is to make sure that you can just work your nonprofit and get paid and not just get paid a love offering. No, thank you. A stipend, no, ma'am. Or what do they call it?

(03:46):

I don't even know. There's so many things that I've read. Whatever they are, absolutely not. You need to be getting a market rate salary so that you can sustain your home while you're serving your community. And a lot of people feel guilty about it because they feel like, well, all of the money should be going to the programs. Absolutely not. Here's what happens. You work your nine to five, then you go work your nonprofit. There is nothing left. It's like riding in the car, right? You run out of gas, you run out of gas. When you work a nonprofit and you work a nine to five, now you're running on fumes. That's not sustainable. At some point, that car is just going to peter out. You're going to Peter out. So if your passion is your nonprofit, then you need to put in the systems in place so that you can get paid just to do the one thing and one thing.

(04:38):

Well do not feel guilty. But here's the other thing I want you to recognize. Funders actually do not favor nonprofits who don't have paid executive directors. What? What'd you say, Amber? Let me tell you why. There's no accountability. When you are a volunteer, you can come and go as you please. If as a funder, I'm writing you a check, a huge six figure check, I need to know there's accountability. The accountability comes with that paycheck, right? I know you're going to show up because you're going to get that paycheck every two weeks. If you're serving as a volunteer, then you can decide to come or not to come, and I have people say to me all the time, no, no, no, no. I thought a funder would like it so that all of the money is going to go into the organization. A funder wants accountability, and accountability comes from a check, even if it's one person, because if they're writing you a check, they know who to call.

(05:37):

They know you're coming every day because you're getting a paycheck. So if you're feeling guilty, stop it. Know that your funder expects for the executive director for the staff to get paid, but right now we're talking about you and the funder wants accountability. Accountability from a paycheck. So let go of that guilt and start to pay yourself. Now, that is the next question. Well, Amber, great. I actually would love to get paid. How do I do that? I don't know how to do that. It starts with having consistent funding, and you're like, well, I'm trying. I'm writing grants, but when the grants run out, then I have to stop paying people. That's why I don't take a salary because it's not consistent. That is because you are dependent on one funding source. No nonprofit can survive off of grants alone, and if you are, that's your sole source of revenue.

(06:37):

You are putting your organization in jeopardy. The way that you get to long-term sustainability, the way that you get to you consistently generating enough money to cover your salaries is by diversifying your funding strengths. Every nonprofit should have 10 streams of revenue. Here's the point. You've got grants come in. Grants should only be about 30% of your budget. They definitely should be a part of your funding strategy, but they should not be your funding strategy. When you have unrestricted and restricted dollars, then you have agility. You can move, you can plug in those holes, right? If all of your money is restricted, which are typically grants, that money is allocated specifically to whatever's in that budget. But when you have unrestricted dollars, then you have money that you can allocate for salaries. So how do you build out your salary? You build it into your budget, and you do it this way.

(07:40):

You do it slowly and strategically. Let's just say you have three grants. Then you charge 33% of one grant to your salary, 33% of another grant to your salary, and the other 33% of your grant. So one grant is not fully funding your salary. It's coming from different grants. It's coming from individual donors. A part of that is coming from your board dues. Another part is coming from that gala that you put on the other part. So you want to have multiple streams of revenue so that you can continuously fund these positions. You're absolutely right. When the grant runs out, so does your salary. That's because you're solely dependent on that one funding source. That's not what we want you to do. We want you to make sure that you always have money coming in that's going to cover your salaries. Alright, so when we come back, we're going to talk about the language to use when explaining your compensation to a funder.

(08:41):

When we come back, not sure how to price your programs or how to cover salaries. Are you scared to increase your program fees? If you're struggling to fully cover the cost of running your program, then you need how to price your programs profit. This workbook provides step-by-step instructions for how to develop programs funders love to fund, determine the cost to charge for your programs and present salary costs in a way that funders will approve. Learn the secret formula I use as an executive director for how to fully cover program costs. Order your copy today. Welcome back. Today we are talking about how to fund your salary without feeling guilty. I hope we've squashed that. Now we're moving into the part of the conversation where you say to a funder why it is you need to get funded. Now, it has been the bane of my existence.

(09:36):

When I'm talking to people and they're like a nonprofit, they shouldn't be making all that money. They're sitting up there like fat cats. First of all, they're talking about those big nonprofits. They're talking about the Red Cross and their 99% of my small nonprofits aren't sitting fat. Let's just call a spade a spade. 99% of my small nonprofits, my medium-sized nonprofits are struggling month to month to cover their expenses. When you start clumping my small nonprofits with my huge nonprofits, then there's a disconnect, but that's what's always being put out there. All those big salaries, they don't need those big salaries. First of all, if you can pay people millions of dollars to run up a court and put a ball in a net, and they're not changing the course of anybody's lives, I'm going to say it's okay for a nonprofit leader to make a market rate so that they can take care of their families.

(10:41):

I'm just going to say that. I'm going to say it with my chest. Okay? Secondly, if you really want to transform a community, then you need to have the people with the skills who can do it. That's not going to happen from somebody who's only willing or who's who can garner minimum wage. There's absolutely nothing wrong with minimum wage, but I'm going to tell you this. You're not going to get an amber win in that position. No, ma'am. No, sir. You need to pay your girl her value and her worth, and you need to pay any individual who's going to step into that position, their value and their worth. This is why we can't keep the nonprofit pipeline filled because these youngsters these days, they are turning away six figures from corporations because they want work-life balance. Now, how are they going to step into a nonprofit space where nonprofit leaders are wearing 17 hats?

(11:39):

It's not going to happen. So what I'm saying to my current founders is we need to change that. We need to let the expectation be that we are going to have budget line items that include salaries, and those salaries are market rate. So when you're having the conversation with the funder, and let's just say it's an old school funder, and they're saying, oh my gosh, those salaries are pretty high, or, I see that your budget is heavily based on salaries and not so much programs. This is what you say. Well, in order for us to make the type of transformation we want to make in our community, we need to have people with the skill sets to do it. I can't do that with people who are just making minimum wage. Yes, we'll have those individuals in the room so we can increase the youth to adult ratio or whatever, but we really need qualified individuals to fill these roles.

(12:33):

What happens when we have qualified individuals who are there in the room? Then we can make actual change. If we have young individuals who aren't experienced and who are willing to accept minimum wage, then it's going to take us longer to solve the problem. So if we have skilled people in the room with the talent and the knowledge to make that transformation, you are going to see that transformation sooner. So basically, you pay for what you get, right? That's always been my conversation with funders. We need to have qualified individuals who are running these programs. That's the only way you're going to see transformation in the community. I need you to be able to communicate that to your funder. Don't be afraid. Let them know, we do want to have innovative programs. We do want to make the transformation. We do want to do all of the things that you want us to do.

(13:24):

We can't do that only paying minimum wage because people are living in this country and this country, it costs to live here. They understand that you just got to be competent enough to make the statement. So what we also want you to do is to make the shift from that. You're taking from the cause, and actually you're sustaining the leader. That's the mind shift I want you to make today. When you decide to fund yourself executive director, I want you to look at it, not that you're taking away from your cause. Actually, you're strengthening the cause because if you don't have to work two job, 15 job, then you are able to pour into your community more. That means you're going to see that transformation quicker. That means that that money that you're investing in the organization, IE, your salary is really going to create the change you want to see in your community. So stop thinking about it as, oh, I'm taking away from the organization and think about it as we're moving the organization forward without depleting all of my resources. When you can't show up to work, then nothing happens, right? So be sure to take care of you so that you can then make the change in the community that you want to make. Now it's time for you to ask me your questions. This is the time of the where you get to ask Amber. Today's question comes from Tiana. Tiana, what would you like to know?

Speaker 3 (14:57):

Hi, Amber. My name is Tiana, and my question may seem silly because you say it all the time, but what do funders really mean when they ask for impact? And I'm calling from San Jose?

Speaker 1 (15:11):

Okay, that's a great question, Tiana. What do funders really mean when they ask for impact? What they really mean is, what difference did my money make in your organization? Impact is I gave you money to do something. Tell me what it is you did with my money. For example, if I gave you $250,000 and the goal is to increase graduation rates, what is the impact that you made? You can say, we increased GPA rate. GPA scores. The GPA is an indicator that an individual is going to graduate. You can say, well, out of 500 youth, 450 of them graduated. That is the impact that you made. It's not enough to say, oh, we're going to brighten the horizons of youth. We're going to make more productive citizens. That says nothing. What is the impact? The impact is now these individuals are not on a fast track to prison.

(16:10):

Now we can say that these young ladies are not going to get pregnant because now they are thinking about their careers. Now we're going to say we've improved the physical outcomes for our seniors because the impact is the change that you actually make in your community because of the work that you're doing. Thank you, Tiana for that question. If you have a question for Amber, be sure to hit me up on all my socials and ask me, and I might just read it on air. Now, we're going to move to the part of the episode that I tell you this every episode, but I mean it. It's my favorite. It's when I get to put a light on the people doing the work in our community, nonprofit leaders. We are actually going to be speaking with Kenya Croom. She's the executive director to A Step to Freedom. She's working with justice impacted individuals to help them with a second chance, starting their life anew. It's a fascinating organization. So let's go ahead and pause and listen to our conversation with Kenya Croom. From a step to Freedom,

Speaker 4 (17:29):

My dad founded the Steps of Freedom, and I don't know how much you want me to go into that founding story.

Speaker 1 (17:36):

Tell us all, tell us all.

Speaker 4 (17:37):

Yeah, so he actually was experiencing incarceration himself, but as a big dreamer and with the Robinhood mentality, he dreamt up a step to freedom and decided he wanted to change what he was giving the world, and he wanted folks to have an opportunity to become stable, to get jobs and transition to really just being full and active parents. That was my dad's vision. It's like, look, you need to get a job, get a, you're going to be balling out of control, but you got to get some money and then you need some housing. So he started A Step to Freedom in 1991, and when I graduated from Clark Atlanta and came home, he handed me the org binder and said, that's what you got to do now. Go get a grant. I was like, ain't nobody going to give us no money. You are crazy. But I jumped in it and I decided to focus on the program and just focus on the folks who needed our support, focus on folks who were being released from incarceration or transitioning out of homelessness and living in cars or living on the street or whatever, and I opened up beds and started to dig in to what their core issues were, and I tried to create solutions for whatever those were.

Speaker 1 (19:16):

Welcome back. I'm excited to have my conversation with Kenya Kroom from A Step to Freedom. Of course, this is the first part of our interview, but if you want to go ahead and watch the whole entire interview, you can go check her out on my YouTube channel, or you can wait for the next three episodes because we're going to break them up in four parts. You get to listen to me interview Kenya Kroom, and if you would like to be featured on my nonprofit spotlight, hit me up on my social media channels. I'm happy to put you out there so that you can get the visibility that you deserve. Thank you so much for joining me today. We talked about how to fund your salary without feeling guilty. Let that guilt go. Guilt is a wasted emotion, especially when it comes to you, my beautiful and talented nonprofit leader because you're doing the work, so you deserve to get paid for the work that you do. If you've enjoyed this episode, be sure to subscribe, like, share with someone in your network. Most importantly, I want you to take care of yourself, like you take care of your community. We'll see you next week.

Speaker 2 (20:21):

Thanks for listening. If you enjoyed this episode, subscribe and leave a review on iTunes. Head over to www.amberwynn.net/podcast for the links and resources mentioned in today's podcast. See you next time.