Wednesday, August 29, 2007

NONPROFIT SALARIES: DOING OUR DUE DILIGENCE

Nonprofit Salary Due Diligence: Comparing Nonprofit Compensation to our "for-profit" cousins


How did I wander into this strange land where nonprofit executive salaries over $200,000 may be considered excessive?

In 2004, the median nonprofit CEO salary was $291,356[1] (keep in mind that these were in the mid-range salaries):

As nonprofit leaders we must perform our due diligence and consider the reasonableness of these for-profit sector salaries. Hmmmm. Let's start with a peak at the AFL-CIO’s “Executive Pay Watch”:

  • Alan G. Lafley, of Procter & Gamble earned $ 24,620,600;
  • Kenneth I. Chenault American Express earned $ 23,619,693;
  • Charles O. Prince of Citigroup Inc. $ 22,994,729;
  • William B. Harrison of JPMorgan Chase & Co. earned $ 22,338,815;
  • Kenneth D. Lewis of Bank of America earned $ 22,027,984.

Compare these to your salary!


[1] Chronicle of Philanthropy, September 30, 2004 Executive Pay Rises Modestly “Trend could continue as IRS increases scrutiny” by Ben Gose


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3 comments:

Rosetta Thurman said...

Great info here Pam. The funny thing is that even a CEO with an "excessive" salary still does more work at a nonprofit before noon than a for-profit CEO does all year. Nonprofit leaders are always giving way more than they are compensated. People need to focus on the value to the community and not the salary. The reality is that working in nonprofits ain't gonna make anybody rich in this lifetime.

Anonymous said...

Yes its true that everyone needs to earn a living, but in a business that declares itself a non-profit organization, outsiders looking in hold these businesses to a higher standard and rightly so, anyone can compare their salary to another, but if thats your motivation as CEO then leave and go into the for-profit, but remember that in an organization that depends upon volunteers, how can a CEO justify a salary thats even a small portion of those ridiculous salaries of the corporate CEO's.

Anonymous said...

Keep in mind that non-profit means no money for shareholders. I believe Blue Cross Blue Shield is a non-profit. Being the CEO of a non-profit, and to clarify, my salary is zero, I had to give up my paying job to keep this dream alive. Now one day it will turn into paying because I am leading it in a direction where the organization will become financially independent. I am forced to either seek this volunteer organization as my full time job, or seek full time employment elsewhere and let this go. All I am saying is that non-profit leaders are still giving for-profit hours, often more.