Working for a non profit: the background

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If you are new to the sector, there will probably be a great many questions you want to ask. Here we try to answer some of them for you.

• How many people work in the non profit sector?
• What sort of opportunities are there in the non profit sector?
• What are the typical rates of pay?
• What's different about the non profit sector?

How many people work in the non profit sector?

According to The Labour Force Survey (LES) around 668,000 people were employed in the non profit sector during 2008; this represents around 539,000 full-time equivalent (FTE) roles. To put this in perspective, this equates to 2.3 per cent of all UK employees or one in every 200 employed people.

The commercial sector employs just under 21 million people and the public sector employs just over 7 million people (NCVO 2010 Almanac). Over the preceding decade, the non profit sector saw the highest increase in workforce at 23 per cent, whilst the private and public sectors saw more modest growth at 7 per cent and 18 per cent respectively.

Again from the Labour Force Survey, many more women than men are employed in the sector, 68 per cent; the comparable figures for the public and private sectors are 65 per cent and 39 per cent respectively. With so many more women than men employees there are obvious implications about employment policies and practices relating to flexible working hours, part-time working, maternity leave.

The non profit sector employs a higher percentage of disabled individuals (19 per cent or 1 in 5) than the public sector (14 per cent) or the private sector (12 per cent). Again this promotes innovative and flexible working policies and practices.

What sort of opportunities are there in the non profit sector?

By far the largest area of work in the sector is concerned with non residential social care and welfare; there is also a significant area of activity which provides residential care.

Charities Direct has a substantial database of more than 10,00 charities which are further classified by the way in which they spend their funds, that is, the area in which they achieve their charitable objectives. These categories are:

• Business and professional
• Civil rights, citizenship and law and order
• Conservation and protection
• Culture, sport and recreation
• Education, training and research
• Health and medical
• Housing and community affairs
• International activities (development and relief)
• Philanthropic intermediation
• Religion
• Social services and relief

Within these areas, there are a broad range of employment roles including:

• Service delivery roles
• Fundraising
• Volunteer management
• Charity management and administration
• Policy and research
• Strategic and Operational Marketing
• Communications and Campaigning 
• Human Resources
• Infrastructure roles

What are the typical rates of pay?

Rates of pay vary enormously across the sector but it is generally true to say that it tends not to attract people whose main driver is money.

There has been a fairly consistent and significant rise in rates of pay, particularly in areas where employers are competing with public sector employers in areas such as healthcare.

With a trend to increased professionalism within the sector there is an increasing awareness that rates of pay need to be sufficient to attract and retain good candidates.

The rate of increase has slowed down but still generally exceeds increases in the public and private sectors.

XpertHR 2009 provide an illustrative table of median total earing by role as follows:

What’s different about the non profit sector?

The major differences stem from different goals and motivations.  Non profit organisations exist to create social wealth, to improve the quality of life for a range of beneficiary groups. The commercial sector strives to create material wealth in the form of money, profits, which are distributed to ownerw/shareholders and others. Non profit organisations do not have shareholders in this wealth-sharing sense; they tend rather to think in terms of their stakeholders, a term which embraces beneficiaries, staff, volunteers, supporters and elements of the wider community. 

From these different goals and motivations flow some cultural characteristics. Passion and enterprise are endemic in a sector where the need is to be creative and inventive in meeting beneficiary need whilst being constantly challenged for resources.  Individuals are frequently highly motivated and even zealous.

Throughout the sector there are opportunities about which people would say “its more than just a job”; the skills required and mechanics involved may be almost identical to those required for a particular role in a commercial set-up; because the 'product' is aimed at filling a provision gap for vulnerable beneficiaries, this can bring additional rewards in terms of personal satisfaction, beyond those of the commercial world.

Attitudes to risk tend to be different certainly between the commercial and non profit sectors. In essence non profit trustees are sometimes more risk averse as they are accountable and responsible for publicly donated funds and the integrity of service delivery to vulnerable beneficiaries. However, the whole enterprise of setting out to do something innovative to fill a social gap is of itself extremely  brave and risky. 

There is still little use of loan finance in the non profit sector and whilst in one way this reduces financial risk as no debt is held, it can also lead to a reluctance to invest in the capacity and capabilities which are needed for sustainability; this is an inherently risky situation for an organisation. Ironically, therefore, those boards that will only approve a balanced budget where you can only plan to spend what you are certain you can raise, in avoiding a short term financial risk may be exposing the organisation to a sustainability risk.

This tends to be an area of debate between the executive and the board which is not found in the commercial sector where there are levels of debt/equity and of upfront investment with which even conservative directors are quite comfortable. This can be a frustrating culture change for those coming in to the sector with experience elsewhere.

Have your say

If you're new to non profits, why not join in one of the discussions and learn from people who are already working in the sector.  Ask questions and share your thoughts on one of KnowHow's discussion forums.