News and analysis
September 09, 2011

Pay Gap Between Male and Female CEO’s Biggest at Large Nonprofits, Study Finds

Female nonprofit executives continue to make less money than their male counterparts, even though the percentage of women in executive roles at nonprofits has increased since 1999, says a new report.

Meanwhile, the struggling economy is continuing to exert downward pressure on nonprofit salaries for both men and women, according to the report by GuideStar, an organization in Washington that collects the informational tax returns that charities file with the Internal Revenue Service.

Median increases in compensation for chief executives at nonprofits stood at about 2 percent or less in 2009, compared with the 4 percent increases provided the previous year. Forty-two percent of CEO’s in the study saw their compensation either decline or stay the same in the last few years. Chuck McLean, GuideStar’s vice president for research and the author of the report, said the economy’s effect on these increases is a clear sign that nonprofits are worried about their finances as never before.

“It’s my impression that organizations have sort of stayed hunkered down waiting for the other shoe to drop, and I wouldn’t be surprised if the increases aren’t relatively low when we do this again next year,” he said.

The GuideStar study analyzed data on 131,473 individual jobs at more than 87,000 nonprofit organizations.

Gap Biggest at Big Groups

While the discrepancy in pay between male and female executives is closing at some kinds of charities, it is most pronounced at the nation’s biggest nonprofits, GuideStar said.

In 2009 the median compensation for female chief executives at nonprofits with annual budgets of more than $50-million was 26.4 percent lower than for male chief executives. (A median figure means that half of the executives in the study earned more and half less.) At the smallest groups in the survey, those with budgets of $250,000 to $500,000, the 2009 median pay earned by female CEO’s was 13.4 percent lower than their male counterparts.

Both cases, however, represent an improvement over a decade ago. In 1999 the median salary for female executives at organizations with budgets of more than $50-million was 55 percent less than for men at comparable nonprofits, and the median salary of women at groups with budgets between $250,000 to $500,000 was 18 percent less.

Recession Pressures

The size of an organization’s budget affects the compensation gap for a number of reasons, said Mr. McLean. “But probably the main reason is women have had such a difficult time getting into the larger organizations like colleges and universities, health-care institutions, and big-name nonprofits, so the penetration of women into those roles continues to go very slowly,” he said. “I think that there is still an old boys’ network out there.”

Over all, the discrepancies between compensation of male and female nonprofit executives can amount to a significant loss of income for women leading nonprofits. At organizations with budgets of more than $50-million in 2009, for example, female executives were earning salaries of slightly less than $350,000 a year while their male counterparts were earning slightly more than $400,000 annually.

More Women CEO’s

Other findings in the study:

• The percentage of women holding chief-executive posts at nonprofits of all sizes grew from 1999 to 2009, though men were still more likely to lead the largest groups. Only 16 percent of nonprofits with budgets of more than $50-million have female chief executives, while 64 percent of organizations with budgets of under $250,000 are led by women.

• Median salaries at health and science organizations were the highest among nonprofits with different program areas with food, agriculture, and religious-related organizations at the lower end.

• For the sixth consecutive year, overall median compensation was highest at nonprofits in the Washington metropolitan area. Organizations in Riverside and San Bernardino counties, in California, had the lowest median compensation.

“The 2011 GuideStar Nonprofit Compensation Report” can be purchased through the GuideStar Web site for $349.