Looking to find out what Executive Directors and CEOs of top non-profits earn?
You’ve come to the right place. The Batten Group places non-profit executives in positions all over the United States. Typically, those in the Northeast receive about 20% more in salary after controlling for overall expenses according to Charity Navigator’s 2016 Compensation Study. The Mid-Atlantic also neared 20% more, and the Pacific West clocked in at about 8 to 12% more than other regions. The Mountain West, Midwest, and Southwest were flat or downwards trending in comparison.
The charities in the Charity Navigator study reported a median total CEO compensation of $123,462 in 2014. These same charities reported a median 3% increase in CEO compensation from 2013 to 2014 indicating that charities are still being conservative with compensation increases. Of the factors we examined, by far the largest driver of CEO salary is overall expenses. The charity’s mission (category) and location also play a role.
We also researched what the Chronicle of Philanthropy had to report about non-profit executive compensation. In 2016, they found that as the economy rose, executives received a median change in salary of 4.9 percent for the last reported year which was 2014.
The Chronicle of Philanthropy also reports that chief executives of S&P 500 companies saw median compensation rise 9.5 percent last year.
If you are considering the non-profit space and have questions about non-profit compensation, one should know it is regulated and reported on through 990 forms submitted to maintain tax exempt status with the IRS. At the low end, non-profits must pay minimum wage. At the high end, compensation must be reasonable and not excessive.
It is “best practice” for the board of directors to know and annually approve the executive director/CEO’s compensation. Bonuses are allowed for compensation in non-profits, but it is important to note that they are scrutinized by the IRS if they are tied to incentives. It is best to set the expectation that bonuses are discretionary, dependent on budget, and simply add to the employee’s regular salary.
Compensation can be complex with top executives because total compensation on IRS forms would include contributions to retirement accounts, housing, and car allowances, as well as insurance premiums paid by the nonprofit to benefit the executive director.
Paying commissions for funds raised is often considered not ethical. Yes, a non-profit can pay a signing bonus or assist with a move.
It’s clear that the top non-profits with large budgets earn significantly more than the majority of non-profits which are operating on smaller budgets. Especially conservative in pay were religious based non-profits.