Column: Dr Nicola Paugh On Nonprofits & More
[Column written by Dr Nicola Paugh]
Bermuda’s nonprofit sector delivers essential services that strengthen our community—from mental health and education to food security and youth development. Yet despite their impact, nonprofits are often under-resourced for the true cost of their work, particularly when it comes to compensating skilled professionals. This creates a workforce challenge, as well as issues of governance, equity, and sustainability for the sector as a whole. At its core, the sector’s ability to deliver impact and maintain public trust depends on having the right people in place to do the work.
Put simply, expectations of excellence must be matched by investment in the people responsible for delivering it. Recent Omnibus survey data commissioned by NAB shows that a majority of Bermuda residents [65%] have trust and confidence in nonprofits. However, where trust is lower, it is often linked to concerns about effectiveness, management, and financial oversight.
Nonprofits in Bermuda are rightly expected to meet high standards of oversight, compliance, and public accountability. But meeting these expectations depends on qualified, stable staff. In turn, attracting and retaining that talent requires organisations to offer fair, competitive, and financially sustainable compensation.
The Cost of Outdated Assumptions
Nonprofit funding—both in Bermuda and globally—has often been shaped by the belief that charities should operate with minimal overhead, and that those drawn to social good should accept lower pay because of the work’s “charitable nature.” This mindset is not only outdated—it is counterproductive.
Many nonprofits today deliver complex, high-impact services often to vulnerable populations – children, young adults, seniors and individuals with specialised needs. These roles require professional expertise, leadership, and sound judgment. Treating compensation as an area for cost-cutting undermines the very outcomes funders expect and communities need.
The result is a self-defeating cycle: organisations operate with limited capacity, roles become overstretched, and turnover increases. What appears to be a cost-saving measure can ultimately cost more by undermining staff wellbeing, organisational stability, and service quality.
A Sector Operating with Limited Capacity
Recent data from the Nonprofit Alliance of Bermuda’s [NAB] 2026 Nonprofit Workforce Survey highlights just how constrained the sector is. Many of NAB’s member nonprofits operate with an average of six paid staff, yet are responsible for delivering programmes and services that carry significant operational, compliance, and safeguarding responsibilities, as well as organisational risk that must be managed. Roles can therefore require post-secondary education, or university degrees—underscoring that nonprofit work is a professional career, not simply volunteerism or a side passion project.
Despite this, compensation growth remains limited. While most organisations conduct annual salary reviews, fewer than half of employees received a COLA increase in 2025 despite rising living costs. Furthermore, nonprofit sector compensation often lags the public sector for equivalent skillsets. For example, a comparison of NAB’s 2026 Nonprofit Sector Workforce Survey with the 2026 Bermuda Government Salaries Report shows that public sector Clinical Directors earn an average of $140,000 annually, compared with $110,000 in the nonprofit sector—a difference of $30,000 or 27% . The gap is even more pronounced for Social Workers and Counsellors, where average public sector salaries of $117,000 exceed nonprofit salaries of $61,000 by $56,000 or 92%! For Case Managers, average public sector compensation is $98,000 versus $80,000 in the nonprofit sector, a difference of $18,000 or 23%. These disparities make it increasingly difficult for nonprofits to recruit and retain experienced professionals, particularly in human service fields where organisations are competing directly with the public sector for talent.
Equity and Access: Who Gets to Work in the Sector?
Compensation is also an equity issue. Persistently low pay limits who can afford to work in the nonprofit sector. It disproportionately excludes young professionals, single-income households, and those without independent financial support. If Bermuda’s nonprofit sector is to reflect and serve the full community, it must also be accessible as a career. That requires a credible value proposition: meaningful work paired with financial stability. When salary differences of 25%, 50%, or even 90% exist between the nonprofit and public sector, many talented professionals simply cannot afford to choose nonprofit work, regardless of their passion for the mission. Over time, this limits the sector’s ability to attract diverse talent and build the next generation of social leaders.
A Balanced and Responsible Approach
None of this suggests that nonprofits should operate without financial discipline or a clear sense of proportionality in compensation decisions. However, it does mean that compensation must be grounded in market reality, aligned with organisational capacity, and treated as a core governance responsibility. NAB’s position is that nonprofit compensation should reasonably approach public-sector equivalency for comparable roles—recognising both the realities of the labour market and the constraints under which charities operate.
Strengthening the Sector from the Inside Out
Bermuda’s nonprofits are essential to the island’s wellbeing. But their effectiveness depends on a workforce that is skilled, stable, and supported. To support nonprofit boards and leaders in addressing these challenges, NAB has recently released a Toolkit for Setting Nonprofit Salaries in Bermuda. The toolkit provides practical guidance on benchmarking roles, establishing compensation philosophies, and balancing workforce competitiveness with financial sustainability. If we expect well-governed, accountable, and effective organisations, we must also ensure they are resourced to operate that way. That includes investing—responsibly and sustainably—in the people who make the work possible.
- Nicola Paugh, PhD, Executive Director – Nonprofit Alliance of Bermuda
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