August 22, 2010; Source: Montgomery Advertiser | Nearly every week we see a couple of articles taking stock of the pay for nonprofit executives, like this one from the Alabama’s Montgomery Advertiser about Alabama nonprofits, or this piece from Crain’s Detroit Business on Motor City charities. There is also this review of national compensation data from Charity Navigator published in Portfolio.
Crain’s defends its biennial salary survey as a public service, much like its publication of private sector salaries, and takes pains to explain that six-figure salaries for nonprofit CEO’s are understandable because of the complex operations these execs oversee, notwithstanding public shock that they make salaries at that level.
The Charity Navigator survey examined some 3,000 charities, finding salaries rose 4.7 percent as revealed in their 2008 990’s, with education nonprofits paying the highest average CEO salaries ($272,545 with an average raise of 5.9 percent). CEO salaries at religious nonprofits were the lowest ($90,000), salaries at nonprofits with $500 million or more averaged $695,379. In Detroit, where the economy is wreaking havoc, Crain’s found a trend toward incentive pay (extra compensation tied to meeting performance benchmarks), but a reduction in perks such as health club memberships.
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Alabama nonprofits usually don’t get much attention in the national nonprofit press, but the Montgomery Advertiser review of salaries at 55 local nonprofits revealed much the same as Detroit’s—that executive salaries are being increasingly linked to performance measures, though as reported by the paper, mostly in terms of money raised.
One intriguingly candid response reported in the Alabama survey came from a group called Alabama Arise, which put the CEO’s salary at a tiny $9,576. The executive director weighed in to say that number was too low in two ways, on its own accord and in combination with another job: He made $11,232 for Alabama Arise and $56,160 for the Arise Citizens Policy Project, for a more reasonable compensation package of over $67,000 (Alabama Arise is really two organizations, apparently one a (c)(3), the other a (c)(4), working as a coalition of 150 faith-based congregations and community organizations addressing policy issues facing low-income Alabamians).
Would that many of the high paid foundation, university, and hospital CEOs who make multiple incomes due to positions with other nonprofit (and sometimes for-profit) organizations be that candid about their total compensation?—Rick Cohen