Human Capital: Protect Your Most Valuable Assets

Oct 26, 2015 | Management and Leadership, Philanthropy Journal, Resources

Human capital may be less quantifiable than money, but when it comes to the nonprofit sector’s capacity for addressing urgent social problems, nothing is more important than people. Organizations are comprised of people, so if we want the sector to thrive, we need our people to thrive too.

Special to the Philanthropy Journal

By Jessica Haynie

As a consultant, I regularly work with nonprofit executives and staff who are simply exhausted, if not burnt out. Nonprofit professionals pour every ounce of energy into their causes, but this often leads to unsustainable work practices and stress levels that can damage relationships. Nonprofits run on relationships: with colleagues, board members, donors and the population being served. Unsurprisingly, high staff turnover is a problem for many organizations.

When we talk about threats to the nonprofit sector, we naturally tend to focus on budget shortfalls. Unfortunately, limited financial capital also places additional strain on human capital. One employee may do the work of two, yet receive little or no support for their own well-being and professional development. Idealism drives us to make sacrifices – but sacrifice is useless if it ultimately undercuts our ability to achieve the goals that inspired us in the first place. Finances may be crucial, but we also need to prioritize the other key element that makes or breaks any organization: its people.

It’s hard to shift organizational culture, much less challenge deeply ingrained social norms regarding expectations and compensation. Still there are a number of strategies that nonprofit executives should consider…

  • Identify goals, aspirations, and passions. When interviewing job applicants, we always ask, “What are your professional goals?” But then that question never comes up again. If you hire that person, take their responses seriously and help them to reach those goals. On a regular basis, check in with them: do they feel like they are moving towards their goal? Has their goal changed? Be clear on what people are most passionate about and connect that with the tasks they are doing.
  • Invest in your people. This can be professional and personal development, but don’t forget about leadership development, which is critical for the sector as whole. Build staff development into the organizational budget. If the budget is too tight, many organizations and associations provide scholarships and grants that could help staff members attend nonprofit conferences and trainings. Consider creating a mentorship program for staff within the organization with board members, volunteers, or community leaders. Some nonprofit executives are afraid to invest time and resources into their staff when there is such high turnover. Don’t be afraid! You may find that the more you invest, the longer they stay.
  • Build community within your organization. Creating a culture of well-being and respect based on meaningful relationships doesn’t have to cost anything. Get to know each other beyond the work environment. This could be something as simple as eating lunch together (not at your desk!) or getting outside for a walk or a hike. Think about volunteering as a group for another organization. This can build team morale, plus your group might learn something. For example, if your organization is trying to build a membership program or hold an event for the first time, helping another organization do these things can teach you a lot.
  • Be flexible. Let go of the traditionally 9-5 mentality. If your people can get things done in a shorter amount of time, or if someone works better late at night, or at home due to fewer distractions (or if they need to work at home so that they can take care of a child or loved one) then let them. It doesn’t matter how the work is getting done, so long as it’s getting done.
  • Compensate fairly. Being a nonprofit doesn’t mean that you shouldn’t pay someone what they are worth – plus, you want to attract quality people. If you truly don’t have the funds, consider having employees work fewer days or hours for the same salary. This can ease tensions and enable them to pick up extra work to make up the difference. You also want to make sure employees know that you are not wasting money on non-necessary expenses. If hourly staff members are putting in overtime, compensate them. Don’t take advantage of salaried staff either; if somebody puts in an 80-hour week because of a major event or program, give them the next week off. Time off helps prevent burnout and makes for happier and more productive staff members. Consider non-traditional forms of compensation. Maybe an employee doesn’t need health insurance coverage because they have coverage from their partner, but they could use more income or perhaps a flexible health spending account.

Investing from the inside out will require a shift in attitudes internally, but the funding community will also need to become more flexible. Much funding is restricted to program use, but if organizations can’t invest in their employees through general operating funds, that hampers efficiency, sustainability and overall effectiveness. Human capital may be less quantifiable than money, but when it comes to the nonprofit sector’s capacity for addressing urgent social problems, nothing is more important than people. Organizations are comprised of people, so if we want the sector to thrive, we need our people to thrive too.

Jessica Haynie, MBA is the CEO of Three Stones Consulting, a fundraising and strategy firm for the social sector based in Santa Fe, NM. Her strong commitment to the sector is reflected in a decade of experience working for organizations in a variety of fields, ranging from higher education to the performing arts to grassroots environmental conservation. She holds an MBA from Syracuse University and is currently considering PhD programs in Public Administration & Policy.

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