Compensation for nonprofit executives, especially CEOs, is one of the most scrutinized aspects of nonprofit governance. While nonprofit organizations are mission-driven and tax-exempt, they still operate in a competitive market for leadership talent. The IRS allows nonprofits to pay reasonable compensation for services rendered, but the line between “reasonable” and “excessive” can be narrow. For …
Executive compensation at nonprofits is on the rise, according to a recent article by the Wall Street Journal. New data from the IRS shows that the number of seven-figure salaries at charities tripled between 2011 and 2014. The organizations that are paying their employees in the millions range from major hospitals and universities to small …
Nonprofit organizations have to attract quality employees just like other businesses. This is often hard to do with just a compelling mission. Attracting the best requires offering attractive salaries and benefit plans. But when is it too much? Congress holds that a salary package must be “reasonable.” Compensation is presumed to be reasonable if the …
Should there be a cap on nonprofit executive’s compensation? The Governor of New York thinks so. A recent Executive Order limits the amount New York State will reimburse for executive compensation to $199,000 per year. According to Governor Cuomo, this is meant to reduce “excessive administrative costs and outsized compensation for [] senior executives.” This …
