Nonprofit HR | Complete Overview for Small Organizations

Focus on your people so they can focus on your mission

Human resources should always be seen as an important and essential area of any nonprofit organization's internal operations. It would help if you thought about it this way, you will be accepting donations to support your worthy cause, and your volunteers and staff will be the people who receive that support to drive your mission forward. Since that is the case, it makes a lot of sense to take great care of them.

Considering that nonprofits are usually only funded through grants and donations, it is fair to say that it can be challenging for new organizations to find the resources and time to create a dedicated HR department for their organizations. However, having trustworthy guidance from an expert on human resources, protocols, and policies is fundamental if you want your organization to grow.

It's important to remember that nonprofit HR involves much more than compensation. There are some misconceptions about how things work for a nonprofit organization. That is why this guide will help you understand the functions and responsibilities of HR for nonprofits.

Here are the 4 of the most important:

• Understanding the Essentials

• Key Responsibilities of Nonprofit HR

• How to get started with Nonprofit HR

• The value of HR for Nonprofits

Understand the Essentials:

First, it's essential to understand the basics of HR, especially if your organization is growing. This is critical because nonprofit HR includes areas required for compliance with local, state, and federal law and great team development. Just like any other organization, but typically on a budget. Many people think that nonprofit organizations are exempt from many employment regulations, but that could not be farther from the truth.

Any organization with employees needs to comply with all the applicable policies and laws, no matter what type of organization it is or how big it is. Your team must become familiar with the employment panorama in any location where you are operating.

Even when for-profit HR and nonprofit HR share some needs, they differ in a couple of critical ways. So let's compare Nonprofit HR vs. For-Profit HR and evaluate the most relevant differences between the two:

The first thing is their core mission. For-profit HR is profit-centric. It will support the organization by giving them the ability to operate efficiently and profitably. On the other hand, nonprofit HR will support the organization's ability to pursue its mission in the most effective way possible. Fostering employee retention and engagement are equally important.

Second, is volunteer management. Being able to manage unpaid team members is an essential task that generally falls under nonprofit HR. Volunteers are vital for nonprofits, so taking time to retain and engage them can be a fundamental investment strategy.

Third, the staffing is often project-based. No matter the size of the nonprofit, they will always rely on programs or project-specific grant funding. For-profit organizations aren't typically limited in the way they schedule and allocate their projects, resources, or workforce. This difference means that nonprofit staffing might be logistically more complicated than that of for-profit companies.

Forth, recruitment challenges. For any organization, good recruitment processes are challenging. Still, it is even more so for nonprofits, mainly because they often have a tighter budget to offer their employees competitive salaries. This means that their HR team needs to think outside the box to compensate their staff.

The key responsibilities of Nonprofit HR departments

Compensation strategies: Employee compensation is one of the most critical parts of nonprofit HR, and this includes both types of payments (indirect and salaries). When we talk about indirect compensations, we refer to extra benefits and the quality of the organization's internal culture. Compensation is a complex topic, so it needs to be handled right. Understanding competitive landscapes take the right resources, and small mistakes will the difference between successful and unsuccessful organizations.

Talent Management

This includes a substantial number of HR tasks such as retention, performance management, employee engagement, etc. Most companies and organizations manage their talent management with different solutions using software, consulting, and in-house staff support.

Documentation and Compliance

This point is critical in any nonprofit HR department. Considering today's anti-discrimination regulations, the landscape continues to become more and more complex. Additional regulatory agencies required would include OSHA, Family Medical Leave Act, American Disability Act, Department of Labor, IRS, and many others. In these cases, your HR team will be in charge of documenting and maintaining your organization's state, local, and federal compliances.

Onboarding and Recruitment

Normally, the nonprofit HR team handles onboarding and recruitment, and both are essential activities of an effective and sustainable strategy. This would include a positive recruitment experience, a streamlined onboarding process, and competitive compensation and benefits packages that make all the difference when a nonprofit wants to hire the best available talent.

Other tasks to consider are culture building, taxes & payroll, and volunteer management.

Getting started with your nonprofit

There are a lot of ways for a nonprofit to get started. It's so much easier for newer nonprofit organizations to implement HR tools necessary or develop HR policies before issues arise, so you should be aware of all your options.

There are three types of approaches to consider if you are a nonprofit:

In-house team: It works and is necessary when organizations are small and don't have the resources to support an HR team or a professional, but it should not be considered a long term solution.

An experienced HR consultant: Getting help from an expert can provide your organization with a custom strategy and specialized support. Working with these types of consultants can be a good move, especially for organizations creating their HR policies and procedures for the first time.

External HR tools and services: A standard option is to hire a third-party HR service; this category includes both individual web-based tools and services and full-service remote HR support to help the organization handle specific needs, like payroll, compliance, and administration.

HR for nonprofits is an extensive responsibility with many responsibilities. Some of them are critical and necessary for your organization to keep operating in the long and short term. In the short term, effective HR proves to be vital for any organization to maintain compliance with federal, state, and local regulations.

Nonprofit employees can be very similar to for profit employees, however, the subtle differences are so important that you'll want to make sure you have a solid plan and resources to execute effectively.

For a first-class HR experience that will help you find the best solution for your needs, let's schedule some time to talk today.

About The Mission

The Mission is a leading partner in the PEO, HR, payroll, and benefits outsourcing marketplace. We provide a valuable service for small and medium-sized organizations and government contractors, serving as a trusted partner in integrated human resource (HR) compliance, risk management, employee benefits, employment practices liability insurance (EPLI), and payroll processing.