How nonprofits are retaining top talent

Time to read: 2 minutes

JANUARY 6, 2026—People who work at nonprofits may be working toward a greater good, but money is still a powerful motivator. So organizations are getting savvier about using financial incentives to keep their best and brightest.

Nonprofits are expanding their use of deferred compensation programs to persuade top talent to stay, according to a September 2025 TIAA study. In a survey of 300 HR and finance leaders across education, health care, and other nonprofits, more than 60% say deferred compensation plans will become more important to their recruiting and retention strategies over the next two years.¹ The trend is more pronounced in health care, where more than three-quarters of organizations say these benefits are becoming more valuable.²

Deferred compensation arrangements allow a portion of an employee's pay to be set aside and paid at a future date, with the accumulated amount growing tax-deferred until distribution. It’s been a way for highly compensated employees (HCEs) to save more than what’s allowed in their employer’s 403(b) or 401(k) plan. More than half of nonprofits say deferred compensation is becoming more important for retention.³

Employers are now designing deferred compensation programs to allow HCEs who are a bit earlier in their careers to defer their own compensation. As they rise through the ranks, employers will often make contributions to reward executive-level performance.

Younger HCEs seem to appreciate having an additional way to save and create wealth, the survey shows: More than half of nonprofit deferred compensation participants are under age 45.⁴

“Our 35- to 45-year-old physicians are done paying off debt and becoming more established in their specialties,” says one benefits leader at a leading urban health care system. “Many are dual-income households and can afford to save more. For them, deferred compensation is an important part of our total rewards.”

There’s a great urgency to retain health care leaders. In the first half of 2025 alone, 68 hospital CEOs announced their departures, more than during the same six-month period in 2022 after the height of the Covid pandemic.⁵ More than 20% of health care CFOs also left their jobs in 2024.⁶ This leadership exodus comes as health care continues to struggle with staffing shortages at every level.

Retain future leaders with executive incentives

Holding onto current leaders long enough to develop a pipeline of future leaders is crucial for any organization. When current and potential leaders feel more financially secure, they’re more likely to stay focused on achieving the organizations’ goals. One health care system uses deferred compensation in a graduated way to offer more financial advantages as leaders advance in their careers.

“You need to offer deferred compensation to stay competitive,” says another senior benefits leader. “With each level of leadership comes better benefits. It’s designed that way.”