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Diana Fischer
Diana Fischer
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Charity CEO Compensation: How to be a good judge of executive pay

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To help donors make informed decisions about executive compensation at nonprofits, Charity Navigator has recently released a study of CEO pay (you can watch a video summarizing the findings here). Our finding show that the average nonprofit leader in the United States makes about $158,000 per year. This figure can vary when you look at specific types of charities, certain geographic regions, and varying size of the organization.

Here are some of the findings at-a-glance:

  • Location: A charity located in areas that already have a high cost of living likely pay their leaders greater salaries then those in rural areas. Pay was highest for those executives working in the Northeast and Mid-Atlantic Regions, while those in the Mountain West and South received below average pay checks. When you evaluate pay by individual metropolitan areas, New York, San Diego, and Boston were the cities paying their nonprofit leaders the most.
  • Organization type: The nature of the work a charity performs also impacts its CEO pay. Charities focused on Education or Arts, Cultures, and Humanities usually write above average pay checks, while Animal-focused and environmental organizations typically have smaller salaries.
  • Size: As you might expect, the largest charities pay their executives the most on average, while the smallest charities have a corresponding decrease in pay level.

If you are considering donating to a charity, be sure to evaluate what similar organizations are paying their leaders. Charity Navigator’s website lists the pay levels for over 5,400 charities all over the United States. And remember that a successful CEO should be rewarded for their efforts. While you may feel better initially by giving to a charity that has a CEO with a low salary, your donation will likely have a greater impact when given to a charity that is proven to be effective, although they may pay their leader slightly more. In the end, you should look not only at the dollar figure of the CEO’s pay, but at how your donation will help your favorite cause.

3 Comments

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  1. Mike Bryant says:
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    If they are asking for money they should provide the information. It’s important that people know that it’s going for what they want it to.

  2. Beth parkhill says:
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    CEO compensation is easy to obtain, quantify, and compare to similar nonprofits. Sadly relevant organizational results are virtually unknown (meaningful impact vs activities completed, number served) or inconsistently measured (few standards exist even within similar types of nonprofits). How can CEO compensation be fairly evaluated if an organization is evaluated primarily on financial effectiveness vs. more important measures of individual support or community impact?

  3. Beth parkhill says:
    up arrow

    CEO compensation is easy to obtain, quantify, and compare to similar nonprofits. Sadly relevant organizational results are virtually unknown (meaningful impact vs activities completed, number served) or inconsistently measured (few standards exist even within similar types of nonprofits). How can CEO compensation be fairly evaluated if an organization is evaluated primarily on financial effectiveness vs. more important measures of individual support or community impact?