How Much Do Nonprofit Executive Directors Really Get Paid?


Money

This post is a follow-up to recent research on nonprofit CEOs highlighted and summarized here: Inside Daring to Lead 2011: 42 Important Findings About Nonprofit Executive Directors.

The Daring to Lead 2011 study gave the nonprofit sector some good food for thought by painting a picture of the nonprofit CEO experience, from getting hired all the way down to working with the board. One section of the findings that immediately jumped out at me in relation to the others: executive director compensation. This topic gets a lot of attention in the nonprofit world, so it was great to see some numbers here.

Though we do have to keep in mind, as Jan Masaoka points out in Blue Avocado, that:

. . . survey data is often of little use, because of small sample sizes, samples weighted towards universities, and the reality that all surveys show enormous variation in salaries for nonprofits of the same fields and sizes. An example of the inconsistency of data: one recent national survey showed average executive director salary to be $60,000 while another reported $158,000.

That said, it can still be interesting to see data – any data – in a field where talking about salaries is a big no-no. So let’s take a look at the Daring to Lead findings a little more closely, shall we?

How Much Do Nonprofit CEOs Earn?

chart of nonprofit executive director compensation, 2011
When I first read through the report, the analysis of the compensation findings stated that the majority of nonprofit CEOs earn between $50,000 and $75,000, which is a bit misleading. The data show that 28% of nonprofit CEOs earn between $50,000 and $75,000, which is the largest group, but sends the wrong message given the rest of the information being presented. For these salary averages to be useful for future CEOs and for boards who may be hiring new executives, it might be better to stick with the facts themselves:
  • 50% of executives earn between $50,000 and $100,000 annually.
  • 23% of nonprofit CEOs earn less than $50,000.
  • 18% earn between $100,000 and $150,000.
  • Only 8% of executives earn over $150,000.
  • Only 2% earn over $200,000.

Also, here is more data on the salary ranges broken out by budget size.

How Satisfied Are Nonprofit CEOs with Their Salaries?

I was actually pretty surprised at the numbers reflecting the salary satisfaction of nonprofit executive directors. I always hear people groaning about how underpaid they are in the nonprofit sector compared to other fields. The common sentiment among readers of this blog, at least, is that nonprofit workers do not get paid enough. But as a CEO, your compensation is generally much higher, so your satisfaction may vary in being at the top of the food chain.

According to Daring to Lead, most nonprofit CEOs are happy as pie with their salaries:

  • Over two-thirds (68%) of executive directors are satisfied with their compensation.
  • 27% report being very satisfied and 41% report being somewhat satisfied.
  • Ten percent (10%) are not at all satisfied and another 18% report being a little satisfied.

Given this new data, it may be safe to say that while the actual paychecks that nonprofit executive directors bring home may vary, keeping them satisfied in their jobs extends way beyond how much money they make.

What do you think? What story does this data tell about the nonprofit executive director experience?

Further reading from Jan Masaoka at Blue Avocado: How Much to Pay the Executive Director?

Beyond Salary: Five Benefits to Consider When Choosing Your Ideal Nonprofit Job

You: a brilliant, energetic young professional who wants to make a difference in the world. What you’re looking for: a nonprofit job that can turn into a fulfilling career with a salary that doesn’t put you into the poorhouse. If you’re reading this blog, chances are you already know where to find a nonprofit job (here’s a list of 97 nonprofit job boards, just in case you don’t). The problem is that you may not know what to look for once you apply for the job and start the process of determining whether you want to take the job or not.

Here’s the thing: being satisfied with your salary, while important, is just one factor.

Even though you may be offered a great salary, you may end up with crappy benefits or a toxic workplace. You may find a job you’re really excited about, but at the end of the day, no matter what the mission, or how much you may like your co-workers, you have to make sure the job will be beneficial to your long-term career goals and personal well being. If you dive in headfirst without thinking it through, you could end up hating your nonprofit job. Here are five factors (beyond salary) that you might consider in a nonprofit job. Your goal should be to negotiate the ones that mean most to you into your offer before you accept a position!

  1. Generous vacation time: meaning at least four weeks off a year. Your work will, at times, be very difficult and you will need a break. A long one. More than just two weeks once a year. Make sure you have enough time allocated so that you can enjoy your time off. If you’re offered only two weeks, ask for four as part of a counter offer, especially if the salary is not ideal.
  2. Fully paid health benefits: meaning health, dental, and vision covered by the organization. You don’t want to worry about how your doctor bills are going to get paid. I once met a young woman who worked in an arts organization that refused to provide her with even basic coverage. She was broke, miserable, and resented her job every time she got sick and had to come out of pocket. It was a lose/lose situation for everyone.
  3. Flexible scheduling: you want to have the option to switch up your hours when you need to, work from home periodically, or take on a slash career (part-time job to supplement your salary or learn new skills). What if you need to leave at 3pm to pick up your sick kid? You don’t want to work in a place that frowns upon work/life balance, even if that means you need to come into work on Tuesdays at 10am because you have a personal trainer or do yoga in the morning.
  4. 403b retirement account: an employer plan set-up to allow you to save for retirement. It’s best if the organization offers some kind of match in addition to your contributions. It makes your money grow faster! And knowing that your nonprofit cares about your long-term financial future will only make you more loyal to the organization.
  5. Professional development opportunities: ideally, there would a set amount in the budget for staff to attend conferences or workshops to hone their skills. But, in these tough economic times, many nonprofits will tell you they’ve cut their professional development budgets. However, if there’s an annual conference you really want to attend, work the cost into your salary negotiations. You can also sweeten the deal by offering to come back to the office and train all the other staff on what you learned at a particular workshop.

In my nonprofit career, I’ve learned that everything is negotiable. Everything. Especially if you can prove that you have the kind of exceptional talent that the organization needs to succeed. If you can sell yourself really well, the door will be open to getting the best benefits to accompany your salary. In the end, it’s all about what’s important to YOU.

What are some other factors you consider in choosing the ideal nonprofit job?

Thursday Reading: Entitled Nonprofits, Asking for What You’re Worth, and the Non-White Gen Y Experience

The blogosphere is rockin’ with some really good stuff! Here are a few gems that came my way this week.

Jamie Notter tackles the corporate vs. nonprofit debate:

Neither nonprofits nor corporations are entitled to exist. So forget your tax status for a minute, and forget any preconceived notions that you have about the corporate world. If billions of dollars in resources suddenly moved to your mission, why would your organization need to be a part of the picture? Because your community is so strong that you can get things done quickly and wisely at the same time? Because the world trusts what comes out of collaborations under your umbrella since you carefully engaged diverse stakeholders? Because you add tremendous value to the community?

Zora & Alice host a fascinating interview with Thalia Theodore Washington, Executive Director of DonorsChoose.org about overcoming the challenges of negotiating as a young professional.

I went in knowing that I would be negotiating. That was a goal I had set for myself. So when I got the offer, I knew I was not going to accept on the spot. I prepared for that conversation. You know, “What’s the vacation policy? Is there a bonus structure? Is there a professional development policy?” Then, “Thank you very much, I’m so excited, you’re a wonderful organization, I’d like to take two or three days to think about it and get back to you. Can I schedule a call with you on Wednesday?” I practiced that conversation over and over again. And then I practiced for the follow up call. So they offered X; “I’m actually looking for Y.” I practiced scenarios, like what if they say no right on the spot? If they say maybe, then I have two other things I’d like to add in. I literally had a script right in front of me for every scenario. And I did not have that conversation in person. Some people might be different, but I needed my script. And I just felt more comfortable on the phone. Think about it and prepare for it in advance so you feel like you have control of the situation.

J. Maureen Anderson asks (and answers) some important questions about the “other” Gen Y that no one talks about:

Where is all of the research on and dialogue around the non-white, non-middle class Gen Y experience? Why do we only ever hear about student debt load and the plight of college grads who are moving back to the safe haven of Mom and Dad’s suburban oasis? What about those who never made it to college in the first place? Who don’t have the option to lean on their families, because these families are every bit as financially strapped (if not more so) than they are? What about young adults who, by virtue of culture, religion or upbringing, have different values or a different relationship to technology than those which defines the Millennial archetype? These young adults exist and in large numbers, but you wouldn’t know it from most media coverage of Gen Y/Millennials.

Are You Satisfied with Your Nonprofit Salary? Why or Why Not?

Professionals for Nonprofits has just released their 2009 data on nonprofit salaries for three metropolitan areas: New York, New Jersey, and Washington, DC.  While many of the jobs in the surveys command a competitive salary on average, it’s obvious that not all locales pay their nonprofit staff at New York levels. In fact, it’s pretty much an accepted truth that most nonprofit professionals (of all ages) don’t make very much money.

Is that true for you? If so, what kind of salary would you be happier with? Would you be happier with your salary if you had more benefits? Which ones?

I want to know where all of you dear readers stand on this. Let’s talk.

Photo credit: Call Centre Helper

Nonprofits Will Never Be Respected Until We Start Respecting Ourselves

There has been a lot of conversation lately about the future of the nonprofit sector. The economy has got us all in a tizzy, worrying about who will be left standing when the smoke clears. The blogosphere is rockin’ with folks talking about the four possible futures for the nonprofit sector, low nonprofit compensation, whether social enterprise is a better entry point for young people, and will the MBAs save us. I think all of this discussion about how our sector should be improved is great. We need this kind of dialogue. But the one thing that’s missing in all of our conversation is the responsibility of the nonprofit sector to transform itself, or ourselves into the kind of organizations we want to be. We can blame it on the economy, blame it on the foundations, blame it on the government, blame it on the Democrats, the Republicans, the President, hell we can even blame it on the alcohol. But if we’re going to play the blame game, we need to recognize OUR role in remaking our future as well. Here are just some of my thoughts about what we should consider now. Let’s look in the mirror, shall we?

Stop Acting Like We’re Doing the Nonprofit Sector a Favor By Working Here
So I’m sitting across from an MPA grad interviewing her for an open position at my organization. I ask her where she wants to be in five years. She says she’d like to be a nonprofit consultant so she can help all the little agencies that need help with “even the most basic management tasks.” Now I know we need help, who are you telling? But it was in the way she said it, as if us nonprofit organizations all had the cooties and she had the cure. We grumble about how many talented young people come into our organizations just to “cut their teeeth” and then move on to bigger and better things in the corporate world. Part of this is our fault. We contribute to the branding of our sector as something that needs to be fixed, that we’re all struggling organizations in need of business skills that none of us have. I disagree with Dan Palotta‘s idea that we have to “free the nonprofits” and compete for talent from the business sector. The truth is, the leaders we need are already here. We don’t have to look elsewhere for nonprofit talent. The truth is, the work of social change is indeed highly sophisticated.  This is more than just scooping risotto onto a homeless man’s plate. We do ourselves a disservice by not emphasizing the strength and resilience we have as nonprofit organizations versus the business sector. We would do well to learn from Robert Egger’s stance that all of us nonprofit leaders stand together with our voice, values, and votes to show the rest of the world we mean business.

It’s Not All About the Benjamins
My grandmother always cautioned her girls not to “put out” too soon when dating a new beau. “You want him to respect you, baby”, she would say. “Why would he buy the cow when he can get the milk for free?” Some of us haven’t learned yet. Us nonprofits, I mean. We meet one dyn-o-mite funder, and all of our values fly out the window. I see organizations implementing new programs left and right, everyone scrambling to make ends meet in these lean economic times. The monies have dried up, and it seems like we’re fighting each other and competing worse than ever. We clamor for our small slice of a pie that’s already way too small. But just because we have cash flow issues, doesn’t mean we have to sacrifice our mission. How many times do we have to hear it? We have to do less with less. Focus on our core work, cut expenses where we can, and partner like crazy. Are we listening? This is the new normal.

Let’s Not Be Forced to Merge
You’ve undoubtedly heard many a funder lament about the sheer number of nonprofits in existence. There’s just too many of us for them to fund. To the tune of about 2 million too many. Now is that in itself a reason for nonprofits to consider merging? Of course not. Mergers are not the silver bullet for the nonprofit sector. Many mergers are actually unsuccessful and do not, in fact, end up realizing the predicted financial savings. But. If you know that there are nine other afterschool programs within a 2 mile radius, you have to know that the writing’s on the wall. In this economy, the funders as well as community members start to ask questions. When the money was flowing, it was easy to deflect the “and how are you different from the program down the street?” question, but now it’s glaring for all to see. How will we respond? Will we take it upon ourselves to start having more conversations about deeper partnerships and possible integration? Or will we wait for our funders to force encourage us to merge? My view is that if we’re going to have to consider mergers as part of how we will sustain this work, let’s do it proactively, instead of being forced to do so.

Stop Blaming Low Nonprofit Salaries on Everyone Else But Ourselves
As much as we want to blame the funders, the “nature of nonprofit infrastructure, overhead, etc.” we have to face the music: low nonprofit salaries are OUR OWN FAULT. We are the ones who pay the low salaries, and we as nonprofit employees accept them. We as a nonprofit sector are made up of individuals that don’t speak out of turn, even sit by in those rare instances that CEOs make six-figure salaries while laying off staff. Who are we really fooling here? There is no “low salary boogeyman” in the nonprofit sector making us all pay our staff pennies on the dollar. There has always been an ongoing issue with many Executive Directors making 2-3 times the salary of the next highest-paid staff person. Even our national infrastructure organizations and foundations are guilty of not addressing the issue of excessive CEO compensation compared to what they pay other staff. In 2007, Where Most Needed offered this related criticism on the Independent Sector-sponsored Principles for Good Governance and Ethical Practice: A Guide for Charities and Foundations from the Panel on the Nonprofit Sector. So let’s stop the madness. You can’t go around saying that one of the main problems in our sector is low compensation when it’s YOU that’s paying your staff $30,000. Break out of the box and pay your staff what they’re worth. Then and only then will adequate compensation become the norm. This may mean that we hire fewer people who can do more work. But hell – to me, that sounds a lot better than underpaying a lot of people who are still overworked, and end up quitting our organizations anyway.

With all of our own moaning and groaning about our sector, it’s no wonder other people emphasize the “non” in our nonprofit field. Believe me, I’ve been guilty of all of the above. But what’s happened is that in all of our “insider baseball” talk amongst ourselves about what’s wrong with our sector, we have somehow internalized it all to conclude that this is just how it is. This is just the nature of “nonprofit culture”. We forget that WE are nonprofit culture. The nonprofit “sector” is made up of individual organizations, which are made up of individual people, which means that this is all up to us. It is what we make it to be. So when are we going to be the change we say we wish to see?

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