May 1st, 2023

HR for Nonprofits: Expert Tips for Human Resources Management

Nonprofit organizations can feel like they are at a disadvantage when developing their human resources strategies because of their often limited budgets and resources. Despite these limitations, nonprofit leaders shouldn’t shy away from developing a strong strategy–they need one to reach their maximum potential. In fact, nonprofits have some unique benefits over for-profit organizations. But before we jump into that, let’s quickly cover:

What Does HR Do in a Nonprofit?

The HR department of a nonprofit operates similarly to that of a for profit company. Nonprofit HR professionals will typically focus on:

  • Recruiting and onboarding new hires
  • Handling employee wages and employee retention strategies
  • Creating and maintaining employment policies that foster a healthy work environment
  • If applicable, the onboarding and management of volunteers

But despite using similar business practices, certain factors such as compensation strategy, volunteer engagement, insurance coverage and HR policies can vary greatly between for profits and nonprofits. This sometimes leaves nonprofit human resources teams with an uphill battle and unique challenges.

That’s why we’ve put together our best practices for creating an efficient, productive and effective HR strategy for nonprofits.


Our Best Strategic Tips for Nonprofit HR Departments

Whether you leverage one or all five of these tips, each one will help position your nonprofit for optimal performance.


Recruitment and Retention


Recruiting and retaining employees is critical for any organization and nonprofits have an advantage in this area that they need to capitalize on: their mission. Many people value the mission of their organization more than additional financial compensation. We can see this in the government and military, for example, where capable and talented people who could make more money elsewhere often choose to stay in a lower-paying role because they care more about the mission and the potential to have a strong impact.

Both potential employees and new employees should be able to understand and feel the passion behind a nonprofit organization’s goals. Leaning on your mission during the recruitment process will not only help you attract and keep strong talent, but will also ensure that the people joining your organization are committed to fulfilling that mission.

In terms of retention, nonprofit organizations can create a positive work environment by fostering a culture of transparency, open communication, and employee recognition. Those don’t cost anything. Nonprofit organizations may consider offering flexible work arrangements, such as remote work or flexible schedules, which might be attractive to candidates who value work-life balance.

When you provide opportunities for professional development and career growth, it can also help retain employees, even if salary and benefits packages are limited. By implementing effective recruitment and retention strategies, nonprofit organizations can ensure that they have a talented and committed workforce to achieve their mission driven goals.

Volunteer Management

hr-for-nonprofits-tampa-bay-estuary-programFor a nonprofit who needs them, volunteers can be the lifeblood of your organization. It’s important to have the right processes in place for managing and training volunteers. increases the likelihood that volunteers have a memorable and positive experience, want to come back again, and tell others about the opportunity to serve with your organization. Not only could a weak onboarding process or other processes discourage volunteers from helping you; it could put your organization at risk.

Here are three ways to improve your volunteer management processes:

  1. Especially for volunteers that will be serving more than a few hours, establish clear expectations and guidelines for their roles and responsibilities even if you never share all these details with the volunteer. This can include creating job descriptions, providing training and orientation, and establishing clear lines of communication. Volunteers—much like employees—are likely to perform better if they have clear direction on what they should be doing. Nonprofits should be careful to treat volunteers like staff members, even though they are unpaid.
  2. Leverage technology to streamline volunteer management. For example, nonprofit employees can use online scheduling tools to coordinate volunteers’ schedules and assign tasks more efficiently. Using volunteer management software can also help nonprofit organizations track volunteers’ hours, skills, and availability, making it easier to match volunteers with the organization’s needs.
  3. Reduce your risk by ensuring that you have the appropriate waivers, safety training, and insurance in place to cover any incidents. A waiver with the proper language can be helpful in reducing risk, but pairing it with appropriate safety training and good insurance is crucial. Don’t skimp on these areas. Volunteers generally expose a nonprofit to much of the same liability that an employee does, including for harassment, discrimination, and workplace safety.

Employee Development

nonprofit-hr-professional-training-developmentInvesting in employees’ development is essential for nonprofit organizations, even with limited resources. Aim to provide employees with opportunities for training, skill development, and career growth that can help them perform their jobs more effectively and improve job satisfaction. However, nonprofit organizations may not have the financial resources to invest in expensive training programs or professional development opportunities.

To overcome these limitations, nonprofit organizations can leverage online resources—such as free webinars and online training courses—to provide employees with learning opportunities. Additionally, nonprofit organizations can encourage employees to share their knowledge and expertise with each other through mentorship programs and peer-to-peer learning opportunities. These programs not only provide employees with valuable development opportunities but can also foster a sense of community and collaboration within the organization.

Although your nonprofit may not be able to offer the same perks as for profit organizations (i.e. employee benefits), you can still offer employee support, growth and new opportunities.

Compliance & Compliance Issues

compliance-rules-nonprofit-hr-departmentCompliance with employment laws and regulations is critical for nonprofit organizations. Failing to comply with these regulations can result in legal penalties and reputational damage. Nonprofit organizations can ensure compliance by staying up to date on the latest laws and regulations and establishing policies and procedures that align with them. Take advantage of the multitude of free resources out there, especially if you don’t have dedicated HR personnel or experience in this area.

One way nonprofit organizations can manage compliance with tighter budgets is to partner with HR consultants or legal counsel who can provide guidance and support. A dedicated HR professional can help nonprofit organizations navigate complex regulations, statewide and federal laws, local income taxes, osha requirements and ensure that their policies and practices are compliant.

Often times, teaming up with an HR-outsourcing partner is more cost effective than trying to build an internal HR function. Partnering with reliable human resources professionals can allow your organization to focus on raising funds, developing key relationships, and achieving your mission–not on compliance issues.


Download the Guide: Small Business Guide to HR Compliance

Download the Small Business Guide To HR Compliance to learn what HR compliance is and why it’s important for small businesses. In this guide, we cover common issues and difficulties of managing HR compliance and how to manage HR compliance as your business grows.

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Performance Management

performance-management-hr-nonprofitPerformance management is the process of setting goals, assessing performance, and providing feedback to employees and volunteers. Effective performance management can help a nonprofit organization improve productivity, employee engagement, and job satisfaction. However, nonprofit organizations with limited resources may not have the time or expertise to implement a comprehensive performance management system. That’s okay.

One way to overcome this challenge is to simplify the performance management process. Instead of a long and burdensome annual process, consider a shorter quarterly review. Performance reviews are more effective if done on a quarterly than an annual process because it allows for more feedback and communication between managers and employees. Furthermore, a performance review with 2-4 simple questions that don’t require long answers can be less daunting for managers to complete.

Summing Up Nonprofit HR Insights

Nonprofits do incredible work and the world is better because of it. But HR for nonprofits is a crucial element to the operations and overall success of reaching a nonprofit’s goals. If you take the time to optimize a nonprofit’s HR strategy, it will foster employee growth and a more seamless journey to fulfilling your nonprofit’s mission.