Direct Relief seeks to recruit and retain qualified, high performing, and motivated employees to fulfill the organization’s mission and support the organization’s strategies and values. Fair compensation of employees is integral to this goal.
In establishing compensation levels, Direct Relief recognizes that its character as a public benefit nonprofit employer creates special considerations that relate to public trust and confidence.
The policy of Direct Relief is to provide compensation that is fair, reasonable, and consistent with compensation paid in the nonprofit sector for positions of comparable complexity and responsibility. The goal of this policy is to recruit and retain high-performing employees and to motivate, recognize, and reward excellent performance.
The basis upon which compensation is provided to each employee shall be documented and reviewed by management and the Board of Directors. The compensation of executive staff is determined by the Board of Directors.
COMPENSATION STRUCTURE
The organization’s compensation package for employees may include a salary or hourly base wage, performance-based pay appropriate to the nonprofit sector, and one or more of the following benefits:
- Employer matching contributions to a 401(k) retirement plan for all eligible employees;
- Subsidized health, dental, and long-term disability insurance for employees working thirty hours per week or more, and
- Paid time off for employees working 20 hours per week or more.
The organization’s compensation system will include periodic adjustments to pay ranges based on changes in the nonprofit sector, subject to organizational financial constraints. Any adjustments to pay will be consistent and comparable with practice in the nonprofit sector.
ROLE OF THE BOARD OF DIRECTORS
In General. The Board of Directors is responsible for the establishment of policies and procedures to ensure that:
- decisions regarding each employee’s compensation and the bases for such compensation are documented; and
- compensation for each employee is fair and reasonable, based on clearly established principles, and reviewed annually with each employee.
Compensation for executive staff and other key employees is determined by the Board of Directors.
Compensation Committee of the Board of Directors. The Compensation Committee oversees all compensation matters on behalf of the Board of Directors and may include non-Director members. The chair of the Compensation Committee also serves on the Executive Committee.
Compensation of Executive and Key Staff. The Compensation Committee reviews compensation benchmarking analyses and makes recommendations to the Executive Committee regarding compensation paid to executive staff and other key staff positions as they may determine are appropriate. The Compensation Committee ensures that the bases upon which such compensation recommendations and decisions are made are well justified, reasonable, and documented.
PROCEDURES
On an annual basis, the organization shall review the compensation level for each staff position. This review shall include a comparative analysis of compensation paid by Direct Relief to compensation paid by local, sector, and national nonprofit organizations. This analysis shall also consider compensation levels within the local Santa Barbara employment market, including compensation at for-profit entities. This process is designed to benchmark Direct Relief’s practices against relevant market data.
At least two surveys shall be used to assess compensation in the nonprofit sector for each staff position. In making such comparisons, job descriptions, special requirements and skills, and the level of complexity and responsibility related to each position are examined. Surveys currently used for benchmarking purposes include:
- Local Labor Market Benchmark: Santa Barbara Human Resources Association Benefits & Compensation Survey (Santa Barbara: Santa Barbara Human Resources Association) or the regional data from the U.S. Bureau of Labor Statistics, if no equivalent position is provided in the SBHRA data.
- Regional Nonprofit Sector Benchmark: Center For Nonprofit Management Compensation & Benefits Survey of Southern & Central California Nonprofit Organizations (Los Angeles: Center for Nonprofit Management).
- • National Nonprofit Sector Benchmark: Guidestar Nonprofit Compensation Report (Williamsburg: Philanthropic Research, Inc.)
- U.S. International Nonprofit Sector Benchmark: InsideNGO U.S. Headquarters Salary, Benefits, and Human Resources Policies Report (Westport: InsideNGO).
(Note: The above surveys are published annually, and the then-most recent and available survey is used for annual benchmarking purposes.)
Annual Performance Review. All employees receive annual performance reviews conducted by their supervisors. The annual performance review of the Chief Executive Officer is conducted by the Chairman and approved by the Executive Committee of the Board.
Compensation of the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, and other key staff are reviewed by the Compensation Committee, which makes recommendations on compensation for such positions to the Executive Committee.
Avoidance of Conflict of Interest regarding Compensation Decisions. Decisions regarding executive staff’s compensation are the sole responsibility of the Board of Directors. No member of the staff, including the Chief Executive Officer and the Chief Financial Officer, is a member of the Board of Directors, and the Board of Directors may not delegate the authority to set executive compensation to a member of the executive staff. The foregoing policy is adopted to ensure that no member of the staff has a vote on any matter concerning compensation paid to himself or herself.