New GuideStar Nonprofit Compensation Report Shows Dramatic Affect of Recession on Nonprofit Executive Compensation

Report Also Shows Female Compensation Continues to Lag Behind Males, Though Overall Percentage of Females in CEO Role Increased
Release date: September 8, 2011

Washington, D.C.—GuideStar—the leading source of nonprofit information—today published its 2011 GuideStar Nonprofit Compensation Report, the only large-scale analysis of its kind that relies exclusively on data reported to the IRS. The report, which was GuideStar's first look at how the "Great Recession" affected salaries and benefits across the nonprofit sector, showed that the economy undoubtedly played a role in lessening compensation. In 2008, median increases in incumbent CEO compensation were generally 4 percent or higher. In 2009, increases were generally 2 percent or less.

The 2011 GuideStar Nonprofit Compensation Report is an extensive review of key employee compensation practices across the entire GuideStar database of digitized IRS Form 990 information of approximately 88,000 501(c) organizations for fiscal year 2009. The report includes an executive summary showing trends in gender, budget size, program area, and geography; comparisons of year-over-year compensation increases among specific executives; and nonprofits from the entire 501(c) universe.

"It's not surprising, even if it is disappointing, that this down economy has taken its toll on the compensation of our sector's leaders," said Bob Ottenhoff, president and CEO of GuideStar. "Given that our employees are our sector's greatest assets, it's more important than ever to establish and benchmark compensation ranges that will attract and retain skillful employees, which ultimately will lead to higher-performing nonprofits. That's where the 2011 GuideStar Nonprofit Compensation Report can be particularly useful."

The Pension Protection Act of 2006 increased the penalties for excessive benefit transactions, including overpayment of nonprofit executives. Accurate, complete, and authoritative information on the nonprofit sector is invaluable, and the 2011 GuideStar Nonprofit Compensation Report is a comprehensive resource to help nonprofits. Because the current report is the 11th in GuideStar's series of annual compensation analyses, it also provides a decade-long analysis of how nonprofit compensation has changed.

Highlights of the 2011 report include:

  • Median compensation of females continued to lag behind that of males when considering comparable positions at similar organizations. The gap ranged from 13.4 percent for CEOs at organizations with budgets of $250-$500 thousand to 24.6 percent at organizations with budgets of more than $50 million. Since 1999, though, these gaps have narrowed for most sizes of organizations. The notable exception is organizations in the $1-$5 million range, where the gap has actually increased.
  • Since 1999, the percentage of female CEOs has increased for organizations of all sizes. The majority of organizations with budgets of $1 million or less have women as CEOs, although female representation in that role declines as budget size increases. Only 16 percent of organizations with budgets of more than $50 million have female CEOs.
  • As usual, health and science organizations had the highest overall median salaries. Food, religion, and youth development organizations brought up the rear.
  • For the sixth straight year, Washington, D.C., had the highest overall median salaries of the 20 largest metropolitan statistical areas (MSA), and Riverside-San Bernardino, California, had the lowest. Adjusted for cost of living, New York replaced San Francisco as the MSA where nonprofit executives had the lowest median buying power, whereas those in Boston had the highest.

"Nonprofits are tasked with documenting to oversight agencies, grantmakers of all types (government, corporations, and private foundations), and individual donors that the salaries and benefits they offer are justified," Chuck McLean, GuideStar's vice president of research and the author of the report, stated. "Our annual compensation reports provide vital information to help nonprofits explain to stakeholders that their compensation practices are appropriate."

Chuck McLean is hosting a free webinar on September 20, 2011, at 1 p.m. EDT, titled "Best Practices in Nonprofit Compensation." The webinar also features Karl E. Emerson, of counsel at Montgomery McCracken, for those interested in learning more. Interested parties may register by visiting: http://www2.guidestar.org/rxg/news/webinars/9-20-11-webinar-compensation.aspx.

To view sample pages or purchase the 2011 GuideStar Nonprofit Compensation Report, please visitwww.guidestar.org/compensationreport. Members of the media may request a copy at lnichols@guidestar.org.

About GuideStar

GuideStar, www.guidestar.org, connects people and organizations with information on the programs and finances of more than 1.8 million IRS-recognized nonprofits. GuideStar serves a wide audience inside and outside the nonprofit sector, including individual donors, nonprofit leaders, grantmakers, government officials, academic researchers, and the media.

Media Contact

Lindsay J.K. Nichols
(202) 637-7614
lnichols@guidestar.org