Managing Human Resources for Nonprofits 

Human resources, or HR, is a department that oversees the clerical aspects of managing employees and volunteers. It’s common for a nonprofit to operate without an HR department and spread the duties among various staff members instead.

However, this can result in a lack of coordination between departments, making it challenging to keep track of tasks such as payroll, hiring, screening, and tracking the volunteer staff. Having an official HR department maintains your organization’s culture, creates a positive work environment and helps balance the needs of everyone in your nonprofit. 

Importance of HR for Nonprofits 

There could be resistance when trying to create a role for a human resources officer in your nonprofit. Many individuals could see this as adding another cost to your organization. But the truth is that bringing on an HR staffer streamlines all administrative tasks that used to be spread out amongst your org. Those who were previously responsible for HR-related tasks will have more time to focus on their core duties. This helps your nonprofit focus on its mission and accomplish tasks that help you fundraise, improve your community or raise awareness for your cause. 

An HR also helps your nonprofit: 

• Abide by your community’s regulations and laws
• Coordinate volunteers
• Streamlines hiring and training processes
• Keeps an eye on budgets
• Foster a positive working environment

The biggest thing you’ll notice after establishing an HR department is how streamlined things will become. With HR, employees can report to one person (or department, depending on the size of your org) instead of going through multiple departments to get something done.  

Nonprofit vs For-Profit 

Both nonprofits and for-profits are held to the same employment standards, but your HR departments will look quite different. 

As a nonprofit, you are likely familiar with dealing with limited resources, tight budgets and fewer staff members. This will impact how your HR will function. These are limitations that for-profit organizations typically don’t encounter as they tend to have more resources, budget flexibility and a higher staff volume.

A nonprofit’s HR department will have to be an expert in tax and employment laws for your area to ensure you remain compliant and retain your 501(c)3 status. 

Read more: How to avoid the 6 Types of 501(c)3 Violations in Your Nonprofit

HR will also have to consider different tactics when recruiting new employees. Typically, you won’t be able to compete with the salaries for-profits offer. HR will need to highlight other benefits of working for your nonprofit when dealing with a competitive job market. Tip: focus on the mission, not the money!

Responsibilities for a Nonprofit Human Resources Department

Human resources is responsible for many things in your organization. The most significant responsibilities are:

• Keeping the organization in compliance with tax laws
• Ensuring that payroll is delivered correctly and promptly
• Creating policies for acceptable behaviors at work

HR also has an intermediary function with the board of directors and the employees. These tasks include

• Helping with recruiting
• Communication of sensitive issues between senior and junior staff
• Setting wages

Now, let’s deep dive into the major responsibilities of the HR department at a nonprofit.  

Developing HR Policies for Nonprofits 

Human resources creates a code of conduct for your nonprofit. This code of conduct is the employee handbook which outlines your nonprofit’s culture, dress code guidelines, vacation policies, sick days and any other procedures your org has. 

HR will also develop your donor guidelines. These guidelines are your nonprofit’s code of ethics and allows your nonprofit to outline possible conflicts of interest. These policies make it easier to turn down a donation from an individual or organization whose interests don’t align with your nonprofits. 

Last but not least, HR should develop policies for your nonprofit’s hiring practices. These guidelines prevent unconscious bias from creeping in during the hiring process and keep it fair for all qualified candidates.  

Identifying Staffing Needs 

One of the most important roles your HR will fulfill is identifying your nonprofit’s staffing needs. The HR department will identify the available positions, desired skills, role qualifications and consult with management on the perfect candidate. Specifying these needs will help HR develop a job posting that will be shared on your nonprofit’s website or job board.   

Recruiting Talent 

The human resources department also takes on the task of recruiting talent. They’re looking for the perfect candidate to fulfill your nonprofit’s needs and someone who will become an asset to your mission. To attract the desired talent, HR engages in the following actions. 

Job Description and Posting

The job description should contain the details of the position, the job duties and the desired education and/or experience. It must be written as clearly as possible to avoid confusion and reduce the potential of interviewing unqualified candidates. 

Once the job description has been written to meet your org’s needs, HR will share it on your website or a local job board. It’s essential for HR to know what platform will be most relevant for your nonprofit. Some communities find that utilizing local newspapers instead of digital platforms is more effective. 

You may want to consider utilizing software and having your own nonprofit job board for your organization. We recommend Job Board by Personify! It will increase membership value and produce non-dues revenue.

Read more: Build a Nonprofit Job Board Your Members Will LOVE (+ 6 Examples!)

Screening and Interviewing Candidates

Just because a candidate matches your hiring criteria doesn’t always mean they’ll be a good fit. Having at least one interview is vital to ensure the person you hire is the perfect match for your nonprofit. 

It’s HR’s responsibility to review resumes, send out rejections to candidates who aren’t qualified, contact those who are and schedule interviews. Then, depending on your preferences, HR can interview alongside a senior staff member of the department or take over the entire interview process and report their findings.  

Human resources is also responsible for reviewing applications from volunteers. Volunteer applications have a lower threshold for approval, but they still need review to ensure the volunteer and organization are a good fit, especially if your nonprofit has age requirements or other qualifying factors.  

Reference Checks and Background Screening

New hires typically undergo a reference check and/or background screening before an official offer is given. HR is responsible for submitting the relevant information to a background check operation and reviewing the results. 

They also contact the given references to ensure the candidate would be a good fit for your nonprofit. HR should ask about work ethic, working style, communication skills, dependability and verify information on the candidate’s resume.

Onboarding New Staff

After the new hire has been selected and approved, HR’s responsible for onboarding and introducing them to the organization. That includes explaining the benefits package, giving out the employee handbook and laying out the general employment rules such as working hours, behavior expectations, etc. HR also takes the new hire to their desk or office, helps them get into the computer (unless you have an IT department) and introduces them to their manager.  

Setting Employee Compensation and Benefits

HR also takes on the job of determining the pay of a particular role and creating any benefits package your nonprofit may provide. 

Determining Salary Ranges

Although nonprofits tend to pay lower rates than for-profits, the salary should still be within the average range for a similar position in your area. Your HR team must take the time to research the compensation of other nonprofits and for-profits in your area to determine fair pay. 

Providing competitive compensation allows you to attract and retain high-quality candidates who bring the most value to your nonprofit. HR should evaluate your org’s budget to determine how much you can afford for new hires. Consider consulting a compensation consultant to build a strong compensation strategy.

Crafting Competitive Benefits Packages

Your organization’s benefits package helps attract talent, especially when the benefits are generous or provide a lot of coverage. A standard benefits package typically includes health insurance, vacation time, sick/personal and retirement plans.

HR is responsible for researching the right plan for your nonprofit that gives the most value to your employees while saving the organization money, a delicate balance, especially with a tight budget. 

Providing a valuable benefits package to employees can incentivize them to take a job offer with lower pay. The candidate may prefer more retirement contributions, quality health care coverage, or a lenient call-in policy that compensates for a lower salary.  

Training

HR trains new hires and volunteers on basic job responsibilities before turning them over to managers or supervisors. They explain the company culture, how to get around the building and the role the new hire plays in the organization. HR also ensures the new employee is comfortable in their new work environment and establishes their relationship as a resource for all workers. 

Volunteer Management

Volunteers are an essential part of a nonprofit’s culture and managing them is a large part of HR’s responsibilities. They will onboard volunteers, establish volunteer expectations, and track their hours. Occasionally, larger nonprofits may have a dedicated team to manage volunteers, but if your organization is smaller, HR will take this on.

Building a good relationship with your volunteers is key to retaining involved volunteers who are passionate about your nonprofit. HR should lead initiatives that motivate your volunteers and build effective management strategies. 

Shaping Your Nonprofit’s Culture

HR sets the tone for the organization’s culture and helps foster a positive working environment. It’s important that your HR department is attentive to questions, inquiries, complaints, and promptly and politely resolve problems. 

HR is often viewed as protecting the organization from legal trouble, but the department is also there to support employees and volunteers. Balancing everyone’s expectations and being responsive goes a long way toward creating a fair and pleasant environment.  

Managing Employee Relations 

Part of shaping a healthy culture within your nonprofit includes managing employee relations. Personalities and opinions sometimes clash in a workplace, requiring HR to intervene and resolve the situation. 

HR is responsible for listening to the grievances, evaluating the situation as a whole and deciding on the best course of action in accordance with internal policies. If the problem involves a local, state, or federal law violation, HR has to resolve the issue in accordance with the applicable laws. 

Nonprofit Human Resources Best Practices 

Human resources ensures your nonprofit operates seamlessly and delivers the best to the communities it serves. The following are best practices that HR for nonprofits should follow to keep your nonprofit running as it should. 

• Establish and maintain your HR strategy. Your HR strategy should cover all the key responsibilities we’ve covered above. When developing your strategy, document it well and keep a digital copy for your nonprofit’s records. This will allow for a seamless transition in the event of turnover in your HR department or expansion.
• Regular employee reviews. Engage in regular reviews of senior and junior staff members to monitor performance. During these reviews, you will be able to ensure that all compliance requirements are adhered to and regulations are followed. This is also a great time to receive employee feedback! These reviews help strengthen the relationship between your nonprofit and those who work for it, fostering a positive atmosphere.
• Track compensation and benefits. It’s important to consistently track and research your organization’s salary compared to other companies. This will allow you to remain competitive in the job market and secure the best employees. Participating in a yearly audit of your benefits package will also ensure you provide your employees with the best benefits for the fairest price possible.
• Utilize software. Establishing and maintaining a database of your nonprofit’s volunteers is the easiest way to keep track of their progress and streamline processes. With volunteer management software like WildApricot you can simplify how you manage your volunteers, saving you time and money. Plus, you can build your own website for your nonprofit and manage your members, too! Try our 60-day free trial here. 

• Through volunteer management software, you can schedule shifts, automate email reminders, offer easy online registration, and utilize tools to help you match jobs to volunteer skills.

When implementing your Human Resources department for your nonprofit, make sure to reference this guide! We hope you’ve found this helpful. Check out these other great resources to help your nonprofit run more smoothly and make the biggest impact!

• Donor Databases For Nonprofits: Ultimate 2024 Guide + 8 Best Software Picks!
• The Ultimate Nonprofit Ecommerce Guide: Best Platforms & Beyond!
• Nonprofit Boards: 7 Key Responsibilities for Good Governance
• Nonprofit Talent: How to Find and Retain Awesome People