D.C. and N.Y. Charities Reveal Recession Jitters in New Surveys

March 12, 2009, Chronicle of Philanthropy — Among nonprofit organizations in the Washington and New York metropolitan areas, staff members who run programs are most likely to be laid off this year, while fund raisers at those charities are most likely to see their ranks increase, according to a pair of new surveys on nonprofit salaries.

The surveys, by the recruiter Professionals for NonProfits, which maintains offices in both cities, found that 29 percent of Washington charities that responded said they expect to decrease the number of employees who run programs, with 24 percent of New York charities surveyed reporting the same.

By contrast, one-quarter of Washington organizations and 21 percent of New York charities that responded to the survey said they expect to hire fund raisers in 2009.

These findings are not surprising, says Gayle A. Brandel, president of Professionals for NonProfits.

“Whenever we find that an organization has to go through some sort of a budget trimming, unfortunately we find that it affects programs, and they tend to be able to cut programs much more quickly, much more easily than they can other things. So programs tend to be cut first,” Mr. Brandel says.

Conversely, “in times when it’s so critically important for monies to be raised, fund-raising staff would be the focus,” she says.

As a result, she adds, fund raisers’ salaries are the only ones that are increasing with any consistency, because competition for talent with that expertise is so keen.

End-of-Year Look
The surveys—based on data from 350 nonprofit organizations in Washington and 480 in New York—were conducted in December. Both are conducted annually, with a new survey of New Jersey organizations added this year.

Respondents for all surveys included art and cultural, education, health-care, international, and social-service groups, as well as noncharitable nonprofit associations. The groups’ budget sizes ranged from less than $2-million to more than $50-million.

The recession’s impact is felt throughout the surveys’ results. For example, 32 percent of New York organizations, and 23 percent of Washington groups, said they expect staff salaries to stay the same in 2009.

Of those projecting raises for their employees, the largest percentage of New York groups—21 percent—predicted pay increases of between 2.6 percent and 3 percent. Washington groups were more optimistic; among organizations in that city predicting pay increases in 2009, the largest percentage—27 percent—predicted raises of 3.1 percent to 5 percent.

More than half of respondents from both cities—55 percent in New York and 53 percent in Washington—said they expect no cuts in employee benefits at their organizations this year.

Optimism and Pessimism
Washingtonians were more optimistic overall about their organizations’ plight in the coming year: Although 36 percent of respondents said they were pessimistic about their organization’s well being, 53 percent of New York respondents said the same.

Ms. Brandel, who works in New York, says this contrast jumped out at her from the surveys’ results.

“I asked my D.C. office about that, and I said, ‘Is it just that New Yorkers are more pessimistic?’ And they said, ‘Probably yes,’” she says.

But, she adds, the then-impending inauguration of President Obama may have also helped lift the morale of Washington’s nonprofit leaders, her colleagues told her. “The political change that was coming made everyone there sort of relieved in a sense. They were very excited about Obama’s team coming on board, and so they were looking forward to it. Everyone there had a sense of a new beginning, and so the optimism there was even greater than it usually is.”

Meanwhile, in New York, she notes, “Wall Street made everyone very unhappy here.”

In the shadow of the recession, though, she says she is surprised that charity managers in both cities maintain as much optimism as they do. Although some staff cuts have been made, she notes, her clients are also for the first time employing temporary workers to handle grant-proposal writing and other tasks.
“There’s a real resiliency in the sector,” Ms. Brandel says. “There are organizations that are just solidly doing what they need to do, and getting through the year, and making their cuts, and bringing in the people they need to bring in.”

“I think that they’re hopeful,” she says. “But concerned. Very, very concerned.”

Professionals for NonProfits’ salary surveys for organizations in New Jersey, New York, and Washington, which include median salary ranges for 30 staff positions in New York and Washington, and 27 in New Jersey, are available free for download on the recruiter’s Web site.