Comments on: Why Excessive Nonprofit CEO Salaries Are Unethical and Just Plain Wrong

By: Akira

Akira — Sun, 02 Dec 2007 01:11:00 +0000

Disparity issues in nonprofit salaries are due to a complex set of reasons. A fundamental lack of understanding and respect for the work nonprofit executives and staffers do, is probably the most problematic of them. Like all prejudice, the perceptions are often unspoken in polite company and are difficult to fix because it would require a shift in closely held beliefs.

By: Akira

Akira — Sun, 02 Dec 2007 01:00:00 +0000

Nonprofit boards, who approve an organization's operating budget which includes staff salaries are oftentimes made up of corporate executives with no real grasp on the intense tasks that nonprofit staff people take on from day to day. Having spent their entire careers working in a corporate environment, their perception of nonprofit work is shaped mostly by stereotypes and what they read in mainstream media (not the best guidebook). With so many Boards made up of individuals who hold the belief that nonprofit work is a stroll in the park, it’s not surprising that they would balk at paying an executive director candidate with degrees from Dartmouth and Harvard $50,000 a year (true story).

In a decade of working in the nonprofit sector, I have yet to meet someone brave enough to openly admit the troublesome dynamic that is in play. It’s just a big elephant sitting in the middle of our nonprofit living room.

I agree with Rosetta, the salary of the CEO should not be grossly disproportionate to that of the rest of the executive team. However, I think what’s more important than proportion to the next highest ranking staffer are salaries (CEO included) that make sense in the organization’s overall budget picture…

…which will undoubtedly open up another can of worms about the difficulty nonprofits have raising funds for general operating expenses and staff salaries.

By: Rosetta Thurman

Rosetta Thurman — Fri, 30 Nov 2007 18:48:00 +0000

Thanks for the insight, Rebecca! I think it’s interesting that the board decides what to pay the CEO, and though it may be a nice salary, the CEO then gets to decide what to pay their senior staff, and it is often in my experience, much much less. But since you’ve seen better models (and you are the boss!), I wonder if that has helped you see the fairer side of things? One of John W.’s questions was whether it’s a lack of knowledge that causes the disparities that are out there.

Tom – You’re right, I think it’s totally unfair, and fairness is probably an easier discussion than ethics. I’d also like to see a study of the pay trends among CEO vs. senior staff. Dan Prives highlighted larger or national orgs, but from where I sit in DC, there’s alot of disparity goin’ on here as well.

By: Tom Durso | www.501cfiles.com

Tom Durso | www.501cfiles.com — Fri, 30 Nov 2007 16:35:00 +0000

I hear what you’re saying, Rosetta, and while it can be unfair, I wouldn’t call it unethical. If there are different skill sets, requirements, and job duties for the CEO than for other staff, the s/he should be paid more. Also consider that if the nonprofit is underperforming, it’s the CEO who’s most often on the hook, not the staff. And as Rebecca notes above, the Red Cross example could be an anomaly; it would be interesting to see some data on the rest of the sector.

Interesting post. Keep up the great work!

By: Maya Norton

Maya Norton — Fri, 30 Nov 2007 12:15:00 +0000

Dear Rosetta,

Thanks for your participation in November’s Carnival of Giving.

If you would like to learn more about what other participants have said, their submissions can be found here.

Best wishes,

Maya Norton

The New Jew: Blogging Jewish Philanthropy