According to the 2026 Nonprofit Compensation & Talent Strategies Report, 45% of responding nonprofits reported increased difficulty recruiting and hiring qualified employees. Another 58% reported losing or rejecting candidates because their pay expectations exceeded the organization's available compensation. Increasing pay may not always be feasible, but smaller nonprofits have other opportunities to strengthen their recruitment and retention practices. One of those opportunities is pay transparency.
Pay transparency helps employers and candidates establish expectations early, encourages more thoughtful compensation decisions, and builds trust with employees…all without necessarily requiring a substantial financial investment.
And for nonprofits committed to fairness, equity, and opportunity, it's also a chance to put organizational values into practice.
What is pay transparency?
Pay transparency is the practice of openly sharing information about how employees are compensated.
At its most basic level, this means including a salary or hourly pay range in job postings so prospective applicants understand what they can expect to earn before applying.
But pay transparency extends beyond job postings. Organizations may create transparency in other ways such as:
- Making pay ranges available to current employees.
- Establishing and communicating clear criteria for determining pay, raises, and promotions.
- Creating consistent compensation structures for comparable positions.
- Ending pay history inquiries for job applicants and stopping relying on previous pay to set current offers.
- Providing employees with a breakdown of the financial value of their total compensation package, including employer contributions to insurance, paid time off, professional development, and other benefits.
Pay transparency doesn't necessarily mean publishing every employee's individual pay. Rather, it means making compensation practices more visible, consistent, and understandable.
Pay transparency is becoming the norm
Across the United States, more states and local governments are adopting laws requiring employers to disclose pay information. Some require pay ranges in job advertisements, while others require employers to share pay ranges with applicants or current employees upon request. Requirements vary considerably depending on the jurisdiction and employer size.
But the movement toward pay transparency extends beyond legal compliance.
An analysis published by the Federal Reserve Bank of New York found that the share of U.S. online job postings containing pay information increased from approximately 15% before 2018 to around 53% beginning in 2024.
The benefits of pay transparency for nonprofits
For smaller nonprofits, pay transparency offers several meaningful advantages.
Making better use of limited recruitment resources
Finding the right candidate requires considerable time and effort. When pay isn’t disclosed, candidates may invest hours in applications and interviews before discovering that a position doesn't meet their financial needs. Employers can spend just as much time evaluating someone they ultimately cannot afford to hire.
For smaller nonprofits, that wasted effort can be particularly costly. Publishing a realistic pay range in job postings helps establish expectations from the beginning, allowing both parties to make better-informed decisions.
Building trust to attract and retain talent
Competitive pay is important, but compensation isn't the only factor influencing employee satisfaction and retention. Employees also want to feel valued, treated fairly, and confident that their organization makes decisions thoughtfully and consistently.
By making pay ranges and compensation practices more transparent, nonprofits can help reduce uncertainty and build greater trust among current staff. For prospective employees, this transparency can build confidence in an organization before they even apply. This practice can be a strategic differentiator for smaller nonprofits who distinguish themselves as employers that prioritize trust, fairness, and respect.
Making more thoughtful compensation decisions
Smaller nonprofits don't always have formal compensation structures or dedicated HR professionals overseeing pay decisions. Compensation may be determined on a case-by-case basis, influenced by available funding, hiring circumstances, or individual negotiations.
Over time, this can create inconsistencies. Establishing and communicating pay ranges encourages organizations to examine current and future roles and make more deliberate, consistent decisions about compensation.
For nonprofits that advocate for economic opportunity, equity, and social justice, ensuring fairness within their own organizations is an important reflection of those values.
How can your nonprofit get started with pay transparency?
Smaller nonprofits can begin with manageable steps that fit their capacity and build toward more comprehensive practices over time.
- Understand your legal obligations. Review applicable state and local pay transparency laws, including requirements related to job postings, existing employees, and pay history inquiries. Requirements may depend on your organization's size and where employees work.
- Review your current compensation practices. Examine existing pay, job responsibilities, and the factors influencing pay decisions. Identify inconsistencies or areas needing clarification.
- Establish realistic pay ranges. Consider your budget, market compensation information, internal equity, and the requirements of each position.
- Include pay ranges in job postings. This is one of the simplest and most visible ways to demonstrate transparency.
- Communicate with current employees. Explain how compensation decisions are made, acknowledge areas needing improvement, and establish a process for addressing questions.
If you're unsure where to start, short on time and capacity, or want guidance along the way, contact us about how we can help.
Or take a look at our article explaining how nonprofit organizations can create a basic, practical pay model without hiring a compensation expert.