The State of Nonprofit Compensation: What the Data Reveals

To understand how mission-driven organizations are navigating today’s evolving landscape of compensation, benefits, and workforce strategy, we turned to the voices of those leading the charge. OneDigital's 2026 Nonprofit Total Rewards Practices Survey drew responses from over 350 nonprofit organizations committed to advancing equity, transparency, and strategic workforce practices. Together, they offer a snapshot of how mission-based employers are balancing financial sustainability with fairness, competitiveness, and employee well-being.

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Over the past few years, many organizations have begun rethinking how they approach compensation, and the shift is noticeable. You can feel a growing desire for clarity and fairness: nearly a third of employers are taking the time to define what they believe about pay, and many are refreshing their market data to ensure their structures reflect the realities of the talent market. It’s the kind of work that signals a sector maturing;  moving from “what we’ve always done” to “what we want to stand for.”

But as with any transformation, the story isn’t just about progress; it’s also about the distance left to travel. While organizations are getting better at designing philosophies and structures, far fewer are investing in the hard work of implementation. Manager training, communication plans, and thoughtful rollouts often fall to the bottom of the list. The result is a familiar pattern: beautifully written philosophies that never quite make it into everyday practice. The organizations that close this gap are the ones that help managers understand the system and help employees trust it will stand out quickly.

Beneath the surface, the foundational architecture of compensation remains a challenge. Many organizations are still wrestling with the basics: reliable market data, internal equity, and clear role definitions. These are the cornerstones of any fair pay system, and the fact that they’re rising to the top of priority lists is actually a positive sign. It means leaders are thinking long‑term, not just reacting to immediate pressures. Even as many cite budget constraints, organizations are experimenting with creative tools like variable pay, non‑monetary benefits, and targeted adjustments to stay competitive.

You can see this same mix of progress and opportunity in how organizations handle job descriptions. Some still update them only when hiring, a reactive habit that creates misalignment over time. But more and more are adopting regular review cycles or tying updates to performance management. These shifts may seem small, but they’re powerful: they support equity, compliance, and career development, and they help keep pay aligned with actual work.

Market benchmarking tells a similar story. Half of organizations have conducted a market analysis in the last three years, and many have done so in the last year alone. That’s a strong signal of commitment. Yet a sizable group has never conducted a study or relied on outdated data, leaving room for improvement. Organizations that build a regular benchmarking cadence will be better positioned to stay fair, competitive, and well‑governed.

Transparency is another area where the landscape is changing. More than a third of organizations now share full compensation structures internally, and most (87%) post pay ranges in job listings. This shift toward openness reflects rising expectations around fairness and accountability. When transparency is paired with manager training and clear communication, it becomes a powerful trust‑builder.

Manager capability remains one of the biggest opportunities in the entire compensation ecosystem. Most organizations that offer training focus on the basics: understanding the program, the philosophy, and how to communicate pay decisions. That’s a solid start. But the next step will prove even more effective: helping managers understand market data, workforce planning, and career development so they can act as true strategic partners. When managers are confident and informed, employees feel it.

Even the absence of documented compensation philosophies in many organizations points to opportunity. As more employers recognize the need for consistency and defensibility, adoption is likely to accelerate. Those who formalize their philosophies now will position themselves as thoughtful and equitable.

Geographic pay practices remain traditional, anchored to headquarters in many cases. For some organizations, this simplicity works. For others, especially those navigating remote or hybrid work,  modernizing geographic pay and ensuring it’s evaluated against the external market could expand talent pools, improve internal equity, and foster positioning as a competitive employer. This could mean shifting away from a single headquarters-based salary scale toward structures that reflect where employees actually live, whether through regional pay zones, cost-of-living adjustments, or consistent national pay bands. 

And finally, salary increase budgets show a steady, predictable approach to pay growth. Most organizations allocate 3–5% annually, reflecting a commitment to ongoing investment in employees. Those that layer equity, market, and retention adjustments on top of these budgets will strengthen both fairness and competitiveness.

Taken together, the story is one of a sector in motion and undeniably progressing. Organizations are becoming more intentional, more transparent, and more aligned with modern expectations. The next chapter belongs to those who turn strategy into practice, who invest in communication and capacity building, and who treat compensation not just as a system, but as a core part of their culture.

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Survey Respondent Information

Responding organizations vary in size, structure, and maturity, most operate with teams under 1,000 staff and rely heavily on government and foundation funding. About one-third have unionized staff, underscoring a mix of labor environments and organizational models. The vast majority of organizations in this dataset are small to mid-sized, with slightly more than 50% having an operating budget under $20m; with 34% having an operating budget between $20m-$50m.

Respondents span a wide array of sectors, including health and human services (22%), education (13%), and philanthropy (10%). With 83% identifying as nonprofit and the majority in a maturity or sustainability phase, these organizations represent a grounded yet aspirational cohort, one actively shaping the future of equitable and strategic workforce practices.