Pay increases for nonprofit CEOs and executive directors are gaining steam, topping 4 percent at some large organizations for the first time since before the Great Recession, according to a new compensation report from GuideStar. Still, the raises remain below those of the mid-2000s, when at some large nonprofits they crossed 6 percent.
“It does appear that organizations are starting to get more confident since the recession about returning pay increases to prerecession levels,” said Chuck McLean, senior research fellow at GuideStar. “It is not back to where it was, but it is definitely coming back.”
Nonprofit salaries respond to market pressures, Mr. McLean said, noting a relatively strong economy. The national unemployment rate is 4.3 percent.
The increase in pay for nonprofit leaders in the No. 1 job “indicates some level of confidence that the economy is at least in a strong enough situation that you can start doing that kind of thing without raising the ire of the world,” he said.
And it might spell good news for other nonprofit employees, he added.
“So if CEO compensation increases are starting to get back to what were 2008 levels, then that probably means that regular staff are starting to see higher increases,” he said.
From 2014 to 2015, returning women CEOs at nonprofits with budgets of at least $50 million saw a median pay increase of 4.2 percent, according to the 2017 GuideStar Nonprofit Compensation Report. Those at nonprofits with budgets of $25 million to $50 million saw a median increase of 4.3 percent, and those at groups with budgets of $10 million to $25 million logged a median increase of 4 percent.
Men CEOs at the biggest nonprofits got a median increase of 4.4 percent. Those at nonprofits with budgets of $25 million to $50 million got a 4.7 percent bump, while groups with budgets of $10 million to $25 million had an increase of 3.8 percent.
The median pay increase for all CEOs in 2015 was 3 percent, up from 2.6 percent in 2014. In the postrecession years of 2010 and 2011, the median pay increase was 1.6 and 2 percent, respectively.
The newly released GuideStar report is based on data from 2015 federal tax filings on nearly 136,000 positions at about 96,000 tax-exempt organizations. Nonprofits are required to report to the IRS the compensation of paid directors, trustees, officers, and key employees, as well as the five highest-paid employees who do not fit in those categories and earn at least $100,000.
Gender Gap Persists
The percentage of women occupying the No. 1 job at nonprofits increased at organizations of all sizes from between 2005 to 2015, the report found. The biggest increase in the share of women CEOs during that 10-year span was at organizations with budgets of $25 million to $50 million, where women went from being 20 percent of CEOs to 30 percent.
While in 2015 women made up the majority of CEOs at nonprofits with budgets of $1 million or less, they were less than one-third of CEOs at nonprofits with budgets of $25 million or more.
Another way to put it: Women are steering a lot of ships but still not many of the biggest ones.
Median compensation for female CEOs continues to lag behind their male counterparts, with the gap most pronounced at the biggest organizations. At nonprofits with budgets of at least $50 million and at nonprofits with budgets of $10 million to $25 million, for example, women earned 21 percent less than men. At those with budgets less than $250,000, female CEOs earned 7 percent less than male CEOs.
“It feels like it is the same old thing year after year,” Mr. McLean said. “Women took baby steps toward getting closer to men, but there is never dramatic change from year to year. It’s two steps forward, one step back kind of thing.”
Highs and Lows
Median salaries were highest within program areas requiring specialized or technical knowledge and skills. They included positions at science and technology research institutes and services ($156,682), health ($133.933), and social-science research and services ($133,723).
With the increasing number of technical jobs within nonprofits today, nonprofits must pay market-value salaries, Mr. McLean said. He used GuideStar’s own staffing needs as an example.
“If we want good programmers, we have got to pay what good programmers get paid,” he said. “We are not going to assume that they are doing it out of the goodness of their heart. You do have to be very competitive.”
The lowest median compensation was found for nonprofit positions involving religious and spiritual development ($59,638), animals ($64,574), and the arts, culture, and humanities ($71,629).
Copies of the 2017 GuideStar Nonprofit Compensation Report are available for $374 on the GuideStar website.
