Organizations share a need for people to carry out their mission. In for-profit businesses, that mission centers on making money for shareholders. Nonprofits, however, exist for a charitable, religious, educational or political purpose. Human resources in both types of organizations handles functions such as staffing and recruitment, supporting the group's culture and employee compensation. However, HR in most nonprofits has duties beyond HR. It also faces operational challenges that differ from its for-profit counterparts.

Administrative Differences

Administrative functions including background checks, benefits administration and employment verification get outsourced by many human resources departments in all types of businesses. Unlike for-profit businesses, small- and medium-sized nonprofits cannot afford a dedicated HR department, relying often on one person who also manages general office administrative tasks. Nonprofits turn to an experienced HR board member to guide and counsel this individual.


Communication with the workforce plays an important role in employee relations regardless of the size or type of organization. According to the Centerpoint for Leaders website, the dynamics of a nonprofit require HR professionals to be more attuned to the content and timing employee communications. Miscommunication can jeopardize the work-as-a-team atmosphere that's crucial for the nonprofit to fulfill its mission.

Unpaid Staff

Unpaid staff -- volunteers -- provide much-needed manpower for financially-strapped nonprofits. Although businesses in the private sector occasionally hire unpaid interns, their HR departments don't interact with or supervise them daily. The nonprofit HR professional handles the gamut of volunteer management from recruitment and scheduling to termination. This aspect of human resources in a nonprofit is crucial. If HR fails to choose reliable and motivated volunteers, train them or resolve issues as they arise, the organization's morale, services and reputation can suffer.


All organizations find attracting talent with the right skill sets to be a challenge. Nonprofits must sell their core values and mission as they recruit to compensate for lower wages they pay. Tight budgets force their HR professionals to be more creative in advertising job and volunteer opportunities, leveraging their relationship with community organizations, for example, to spread the word. Government funding received by the organization may dictate avenues used for employment advertising. That funding may pose additional challenges for HR when the project it underwrites ends and with it, the ability to keep employees hired specifically for the project.

Compensation Challenges

Compensation in nonprofits relies on more than salaries and wages to reward professional staff. It falls to HR to find inexpensive perks to demonstrate appreciation, such as networking with community contacts for daycare, recreation and restaurant discounts for employees. Flexible scheduling, recognition programs and telecommuting represent options that non- and for-profit benefit packages share.