A joint perspective from Wasseem Emam (Ethical Seafood Research) and Natasha Stromberg (The Stewardship Specialists)
–
A paradox lies at the heart of the impact and not for profit sector, a paradox which many who work within it, and those who help fund it, often don’t talk about. That is, that organisations doing some of the most urgent and genuinely innovative work in the world – on animal welfare, on food systems, and on environmental risk often struggle to plan impact programmes more than twelve months ahead, struggle to pay top talent what they are worth, and cannot afford financially to take the kind of risks that real innovation requires.
Wasseem’s perspective: As a founder and Executive Director of Ethical Seafood Research, I experience these challenges firsthand. ESR is a small nonprofit focused on aquatic animal welfare in aquaculture, mostly in Egypt and Kenya. The work is rigorous, it’s applied, and in a quiet way I believe it matters to both those whom we serve, and to the wider world. However, as a leader and subject matter expert, I find that a significant portion of my time goes not into conducting research, but into writing grant applications to fund our next round of research. And then the next one and so it goes on; a relentless treadmill that continues in a way that is genuinely hard to describe to anyone who has not themselves been on it.
Don’t get, me wrong, I am passionate about and committed to our mission at Ethical Seafood Research, and this isn’t a complaint about the work we undertake, but I in writing this, I wanted to share an honest observation of what I believe is preventing us from creating change for all stakeholders at the pace we all want and need. And no, I genuinely don’t believe that the solution is for leaders like me, or for the wonderful people at ESR to simply ‘get better’ at fundraising. I believe the financial model of impact organisations needs to fundamentally change.
NGO talent and the salary penalty affecting the sector
Natasha’s perspective: As someone who has run multiple teams throughout my career in both the for-profit and not-for-profit sectors, developing and managing talent is a great passion of mine. For me, the ability of the not-for-profit sector to attract top talent, remains critical to ensuring that the world’s most innovative and creative minds are tackling some of society’s most pressing and intractable problems. Yet, the reality for many and specifically for graduates, with thousands of pounds/dollars/Euros of debt, is that they need, and deserve, a liveable salary for their professional efforts. Sadly, the long-term lower salaries which the not-for-profits offer for their skills are not attractive enough to draw them into or keep them in a career in the sector. Let’s take a deeper dive into graduate career trajectories in the not-for-profit sector versus the for profit to illustrate the issue:
Example: Two students graduate from university with similar credentials and a shared interest in doing meaningful work. One goes into a typical graduate career; finance, consulting or Law and one goes into the non-profit or impact sector. 5 years into their careers, there is a bifurcation in salary as most graduates move from “doing” to “managing.”
- For-Profit: Salaries can jump by 10–15% annually via performance bonuses and stock options (equity), which rarely, if ever, exist in the non-profit world
- Nonprofit: Pay raises are more likely to be tied to cost-of-living adjustments (typically 3–5%) rather than large merit increases
- The Result: A marketing professional with 5 years’ work experience may earn £45,000 in a charity but £55,000+ in a corporate firm, creating a non-profit to for-profit salary ratio of roughly 0.82
After 10 years in the workforce, the disparity is even more visible as graduates move into Executive positions and access leadership compensation. Let’s look at some important points at play here:
- Compression: Nonprofits often have “salary compression,” where the gap between the lowest and highest paid worker is kept small to satisfy donors and maintain pay equity.
- The Ratio: In large organisations, a corporate VP might earn $200,000, while a nonprofit Director of a similar sized department might earn $140,000 (a 0.70 ratio non-profit to profit).
- Total Compensation: If you include “Total Reward” (pensions, health insurance, and bonuses), the ratio often drops further, as corporate benefit packages are typically more generous and wide ranging.
Data Source: Gemini
As the financial reward gap opens, what gets lost in that gap isn’t just money, it’s people. Talented individuals who wanted to work on the hard societal problems they felt so passionate about upon graduation, migrate to where they can afford to live, where they can pay back their student debt and feel some degree of financial security. That migration often also includes a migration away from the not-for-profit sector. The result is that we see an exodus of exactly the people the impact sector needs the most. So, to keep talent in the impact sector, we need to keep salaries competitive and aligned with the for-profit sector.
A DIFFERENT KIND OF CORPORATE RELATIONSHIP
Wasseem’s perspective: Here’s an uncomfortable question I often ask myself: should an organisation like mine take money from the for-profit aquaculture industry? My honest answer is yes, under the right conditions – but those conditions matter enormously.
Natasha and I would both like to see change in how not-for-profit organisations are funded and the model we’ve been thinking about could look something like this;
A for-profit company – or better, a coalition of competing for-profit companies in the same sector- co-sponsor an independent research programme at a not-for-profit relevant to their sector. In return for financial sponsorship, those companies have first access to the research findings for a defined period – let’s say two years. After that, the sponsored research is published openly and the wider sector benefits. To safeguard the independence of the research, as a strict condition of financial sponsorship, the funder would not be allowed to direct the research agenda, would not own the research outputs and cannot influence any research conclusions. With the multiple co-sponsor model, these benefits can be shared by a group of industry leaders with the added assurance that no single company can exert undue pressure on researchers. At the same time, the research organisation stays legally and operationally independent and financially buoyant.
How does a sponsoring for-profit company benefit?
Of course, when there is an exchange of money, there are expectations, so what is a sponsoring company getting in the money- for- information exchange? Well in the case of Ethical Seafood Research, a sponsoring organisation would gain access to credible, peer-reviewed science that they do not have the capacity to produce internally. The kind of research which enables companies to demonstrate genuine commitment to animal welfare and sustainability at a time when the social licence to operate is becoming a real business concern. In addition, their investment in that research eventually benefits the whole sector, charting a path of where the industry needs to go anyway.
How does a non-profit organisation benefit?
Firstly, the benefit lies in the ability to do deep research work without the constant interruption of the need to fundraise. Secondly, the ability to pay talented professionals what they worth. And finally, the ability to publish research findings, even when those findings may be commercially inconvenient.
Isn’t this similar to the industry Trade Association model?
Natasha’s perspective: Wasseem and I spoke about the trade association model as a possibility. A trade association brings multiple for-profit companies together through membership fees to have their collective interests progressed. However, there are already many trade associations and we have seen that in an economic downturn, membership fees of trade associations tend to get trimmed first. What we believe is more attractive in the long term, and is
in-line with a for-profit agenda, is clearly scoped, time-limited investment in independent science with the offering of genuine first-mover advantage.
An example case which could be a useful reference is that of U.K based, artificial intelligence pioneers, DeepMind. In 2014, Internet giant, Google invested in a small team of British AI researchers and computer scientists who were doing something nobody else quite understood at the time. Despite Google’s financial investment, DeepMind’s team stayed in London, remained independent, and eventually pioneered a noble-prize winning, AI-enable protein-folding, scientific breakthrough. As a result of receiving stable and ample funding, DeepMind’s talent stayed in place, the science progressed, the funder got enormous reputational benefit and applicability in a commercial domain, and the world benefited from shared scientific findings.
ON INDEPENDENCE
Of course, the argument that taking industry money may cause compromise, remains and the honest assessment is yes, it can, if the structure is wrong. If one company provides most of the funding, directs the research questions and controls what gets published, the result is not independent research. At the same time, independence isn’t binary. A well-designed co- sponsorship model with multiple funders, a cap on any single source’s contribution, contractual
protections for publication rights and a clearly defined exclusivity window is a different proposition and one that is valid.
Our conclusions on the urgent need for change in the funding of the not-for-profit sector
We have both experienced first-hand how the current funding model asks impact organisations to be perpetually creative, perpetually understaffed and perpetually grateful for any type of funding.
We have also experienced that the same model is surprised when organisations struggle to retain talent, move slowly or fail to achieve the systemic change everyone agrees is needed. We believe that the not-for-profit sector does not need to choose between philanthropic funding and commercial funding, it needs both. What it also needs, is the courage to co-create relationships with industry that are robust enough to withstand scrutiny. This means being honest about what research independence requires and having difficult conversations with potential partners on what a successful sponsorship model looks like. If we can achieve that, we may just be able to keep the world’s most innovative people working on the world’s toughest challenges and have them being paid competitively to do so.
Natasha Stromberg
Natasha is a Nature and animal welfare engagement and research specialist with deep experience leading and creating corporate engagement programs in the farmed animal and industrial sectors. Natasha recently founded her own consultancy, ‘‘The Stewardship Specialists” and works with a range of stakeholders to help them build sustainable, nature-positive business models and strategies.