Lessons For Investing in Philanthropy's Talent from the 2015 Grantmakers Salary and Benefits Report

Today, I am pleased to announce the release of the Council on Foundations’ 2015 Grantmakers Salary and Benefits Report (GSB). Since the Council first began researching compensation more than 35 years ago, this annual report has grown from a small set of salary tables into one of the most extensive resources in the country. It provides the field with comprehensive data and allows us to look at how our field has developed over time.

Foundations principally use it to:

• plan their annual budgets,
• benchmark their personnel policies and practices,
• determine salary levels for new and existing staff and ensure that they don’t run afoul of IRS guidelines around excessive compensation; and
• understand the demographics of the talent in the field more broadly.

The report also offers us insight into the field’s current recruitment, retention, and talent and leadership development needs. A career in philanthropy can be immensely rewarding and attractive. It provides talented professionals with a remarkable opportunity to influence the health and wellbeing of communities through grantmaking, social innovation, and participation in shaping public policy and national dialogue. The GSB data demonstrates that the field as a whole offers competitive salaries and benefits within the broader nonprofit sector. On average, foundations are able to attract, develop, and retain great staff who are committed to their organizations and the work of philanthropy. For example, almost half of respondents reported no staff departures in 2014.

However, because the challenges that philanthropy addresses are so complex, growing, and endemic, it is imperative that as a field—and as individual organizations—we tend to the talent pipeline and create pathways to leadership at every point of an individual’s career. Philanthropy draws experts with varied interests from all walks of life, which is what makes it such a diverse field. It’s also why training and leadership development are so critical because professionals need common skills and qualifications.

Together, we can ensure that philanthropy’s workforce is engaged, reflective of the communities we support, and vibrant with the talents of people at all experience levels.

I want to highlight some important considerations that stem from the research.

EMERGING LEADERS

We need to make sure that as a field we are identifying and supporting talented young professionals, both those currently in the field and those who are working in other sectors.

I sometimes hear foundation leaders tell aspiring young professionals to “focus on frontline work. Get to know the issues, whether in the private or charitable sector. Develop some experience and judgment around what works and doesn’t. Meet colleagues and potential partners. Expose yourself to new ideas…and only then are you prepared for a career in philanthropy.”

So, in some respects it might not be surprising that our research found that only 10 percent of full-time foundation staff are under the age of 30.

But we don’t have to accept this as unchangeable. Philanthropy is a growing major in colleges and universities. Young people bring fresh ideas, energy, and disruption, and it is clear that in order to address our sector’s underrepresentation challenges, we will need some disruption. We can start to attract more young people by expanding internship and fellowship opportunities and by ensuring that young staff receive mentorship from more senior leaders.

A PATHWAY TO LEADERSHIP

Mid-career professionals account for a significant portion of philanthropy’s workforce. How can we serve them better?

46 percent of full-time employees surveyed were between the ages of 30 and 49. Our data shows this group doesn’t have a clear path to leadership. Of the CEOs tracked in the survey, just one quarter (25 percent) were promoted from within their organizations (as indicated by the length of their tenure with the funder relative to their tenure as CEO). So some of our field’s brightest leaders have a thick ceiling of opportunity within their own organizations.

This is consistent with the Council’s 2009 Career Pathways study, which found that only 20 percent of executive appointments during a four-year period came through internal promotions. Furthermore, the Career Pathways study found that the majority of successful CEO candidates made the transition from fields outside of philanthropy—primarily from the business (24.3 percent) and nonprofit (24.8 percent) sectors.

Because so many CEO’s are chosen from outside the field, leaders within the field need to have opportunities to grow and gain the multi-dimensional experiences needed to run foundations. All of us can do a better job engaging with our boards in planning for continuity.

If we want our talent to meet its potential, we will need to create clear paths to leadership for our mid-career staff. At the same time, we need to prioritize continuing education. Everyone has to stay fresh and current on new trends and practices, regardless of industry—philanthropy should be no different.

WE ARE HEADED FOR A MAJOR LEADERSHIP TRANSITION

In 2010, the Pew Research Center published a report projecting that over the next 20 years nearly 10,000 baby boomers would turn 65 every day. Our field is particularly susceptible to the effects of this phenomenon.

Consider these findings: Nineteen percent of the full-time CEO’s/CGOs in the survey are at or above retirement age. This number jumps to over one third of foundations with at least $1 billion in assets.

How can we capture the ideas and experiences of those leaders among us who have decades of wisdom and experience and share that with the next generation?

What a tremendous loss to the field if we don’t listen, learn, and respect the hundreds of years of collective knowledge from our baby boomer colleagues. Let’s also think about how we can keep these professionals engaged. How can we keep them plugged in and at the same time make room for the next generation of leaders? And for those who are retiring, what questions do we need to think about in terms of succession planning?

ADDRESSING UNDERREPRESENTATION OF RACIAL AND ETHNIC MINORITIES

This year’s GSB report shows that foundations continue to struggle with their underrepresentation challenges, continuing some of the dynamics I highlighted last year. I encourage foundation leaders to examine the Key Findings section of this year’s report to see the complexity of the data around the underrepresentation of racial and ethnic minorities, gender gaps, and other staff demographics.

NOTE: The Council thinks expansively about diversity. You may learn more about our commitment on our website. We have begun gathering data on people with disabilities, and we are working with partners in the field to understand LGBT staff demographics as well. Both of these areas will require additional diligence.

I want to note that the Council has been working diligently to elevate conversations and solutions to some of philanthropy’s diversity, equity, and inclusion (DEI) challenges.

We held discussions at our Finance and Endowment Summit about the need for a “Jackie Robinson” moment (so-called by famous investor Jon Rogers) in the diversification of foundation asset management. Last fall at the Duke Endowment, we convened HR leaders to talk about the climate shaping organizational culture.

This spring, I joined trustees and CEOs at the Hispanics in Philanthropy (HIP) conference for two days of planning around DEI issues. Then Diana Campoamor, the dynamic leader of HIP, and I wrote about the pressing challenge of the underrepresentation of racial and ethnic minorities. At our Annual Conference, we highlighted the work of the D5 Coalition and some bright spots in our move toward building a stronger sector. We are also preparing an important report on underrepresentation in the field, which we previewed at our Annual Conference, and later this fall, we will open applications on our Career Pathways leadership development program.

There are still significant challenges in this area, which is why I recently added a full-time senior leader to the Council’s staff who will build collaborative DEI efforts. Floyd Mills brings almost two decades of this experience in the private sector, and I am glad he will be working on this challenge as our new Vice President of Diversity, Equity, and Inclusion.

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The rich data from the Grantmakers Salary and Benefits report offers answers to a wide variety of foundation management questions, but it also provokes important questions like these, that affect our field as a whole. I look forward to hearing back from my colleagues about their thinking on the GSB data. I encourage you to download the full report at cof.org/2015salary and provide us any feedback you have on either the report itself or the implications of its findings. I also want to thank everyone who took the time to participate in the research. The more participation we get, the more the field will know.

All my best,

Vikki Spruill
President and CEO
Council on Foundations