Interesting Observations in the Nonprofit Salary Situation
It is not only nonprofit critics who say that the sector should not benchmark senior leaders’ salaries with those in for-profit firms. As the Charlotte Observer recently reported, some, though not all, nonprofit executives themselves also feel that way. In writing about the controversy over the generous compensation package the Charlotte United Way has given its president, the paper interviewed a range of leaders and other observers, who had varying viewpoints on the issue.
One, for example, said it was more appropriate to compare nonprofit and for-profit salaries when hiring middle managers, not those at the top; another said that the strength of an organization’s mission will obviate the need to dangle big paychecks to attract talent. On the other side of the coin, some said that because nonprofit heads perform essentially the same duties as their for-profit siblings, it’s fine to increase pay packages to lure effective leaders.
A consultant quoted in the story had some advice for nonprofits facing such salary quandaries:
He urged board members to consider two things when determining pay: First, what will it cost to attract the right talent? Second, how does a group pay that amount while keeping faith with both the people who support the agency and the constituency the agency was granted nonprofit status to serve. | 501(c)
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