How much should a nonprofit CEO make?
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That’s the million dollar question, especially with the headlines of nonprofit CEOs being arrested or charged with ethics violations, and nonprofits actually being shut down because CEOs are taking extra compensation and living lavish lifestyles.
When anyone does this sort of thing, it hurts the whole nonprofit industry. Yet, is there a rule of thumb? That’s hard because some nonprofits spend about 80% of their budget on payroll, such as those that do direct service and human service on the street. Others spend most of their money on programs, such as building wells, doing environmental work, or working with animals.
What is important is to know your industry and get legitimate comps with other nonprofits in your sphere, so you know the going rate. Nonprofit CEOs should not be poor. They should be paid and compensated, because they are running important businesses.
The organization should look at the total package, however, that’s where some nonprofits are getting into trouble. It’s not salary that shows up on the 990, but all the extra perks that nonprofit CEOs are getting, or have managed to acquire without people being aware of it.
Know what your total compensation package is. Know what the comparables are in your community or nationwide that are similar to the kind of work that you’re doing, and you should be fine.
If you have a burning question about nonprofits, please reach out to us at Sharity. You can email me at info@Sharityglobal.com, contact us through the website, or message us through LinkedIn or Facebook.