Economic Recovery Rebounding Slowly but Gender Pay Gap Still Vast According to 2012 Data
Washington, D.C.—GuideStar today published its 2014 GuideStar Nonprofit Compensation Report, the only large-scale analysis of its kind based entirely on data reported to the IRS, and the most comprehensive nonprofit compensation study available. The report found that for the 14th year in a row, median compensation for female CEOs lagged behind that of respective male CEOs by up to 23 percent depending on the organization size. It also found that only 17 percent of organizations with budgets larger than $50 million had a female CEO, compared to smaller organizations with less than a million dollar budget, the majority of which have women CEOs.
In addition to the gender gap, the new 2014 GuideStar Nonprofit Compensation Reportfound that economic uncertainty continued to affect compensation increases in 2012, although salaries for CEOs retaining their positions had the highest percentage increase since 2008. In 2012, median increases in incumbent CEO compensation were 2.2 percent, up from 2.0 percent in 2011 but still well below pre-recession numbers. In 2008, increases were generally 4 percent or higher.
"In 2012 there was a greater median increase in nonprofit CEO compensation compared to 2011, which is possibly a sign that the economic conditions started to improve for nonprofits," said Chuck McLean, vice president of research for GuideStar, the leading source of nonprofit information, and the author of all 14 Nonprofit Compensation Reports. "Still, the median increase is still only about half what it was before 2008. We also continue to see a nonprofit compensation gender gap. Female CEOs made 11 percent less on average at organizations with budgets of $250 thousand or less, and 23 percent less at organizations with budgets between $25 million and $50 million. All of this tells us that the social sector has a long way to go to meet gender equity in executive compensation."
The 2014 GuideStar Nonprofit Compensation Report analyzes key employee compensation across the entire GuideStar database of digitized IRS Form 990 information for 501(c) organizations. Derived from data reported to the IRS by more than 91,000 organizations from the entire 501(c) universe for fiscal year 2012, the report includes statistical compensation analysis for 14 executive-level job categories by gender, budget size, program area, and geography as well as comparisons of year-over-year compensation increases for incumbent executives. Other highlights from the report include:
- Since 2002, the percentage of female CEOs has increased for organizations of most sizes, but the changes are fairly modest. The majority of organizations with budgets of $1 million or less have women as CEOs. Female representation in that role declines as budget size increases. Only 17 percent of organizations with budgets of more than $50 million had female CEOs in 2012.
- As usual, health and science organizations had the highest overall median salaries. Arts, religion, and animal-related organizations brought up the rear.
- For the ninth consecutive year, Washington, D.C., had the highest overall median salary of the top 20 metropolitan statistical areas (MSAs). For the second consecutive year, Portland, Oregon, had the lowest median salary, although CEOs in Oakland, California, had the lowest purchasing power when adjusted for cost of living.
Nonprofits are tasked with setting executive compensation at a reasonable level under the IRS's enforcement of the Federal Private Inurement Prohibition. Organizations must be aware of the regulations governing executive compensation, and the process used to determine executive pay must be thoroughly documented. Because of this, accurate, complete, and authoritative information on the nonprofit sector is more important than ever. The GuideStar Nonprofit Compensation Report is a comprehensive resource to help nonprofits ensure compliance with IRS regulations on executive compensation.
"In determining an executive's compensation, the board or committee of the board must document the full process—what are the details of the compensation package, when was it approved, who approved it, what comparability data was used," stated McLean. "The board must use data from comparable organizations in determining appropriate compensation."
The 2014 GuideStar Nonprofit Compensation Report compiles that exact information, breaking the compensation information down by size, location, and mission in order to provide nonprofits with comprehensive data for setting executive compensation. People interested in learning what the IRS mandates regarding setting executive compensation, the kind of data compensation should be based on, and what happens if the IRS determines that a nonprofit leader has been overpaid are encouraged to download GuideStar's free white paper, "What You Need to Know About Nonprofit Executive Compensation."
To view sample pages or purchase the 2014 GuideStar Nonprofit Compensation Report,please visit http://www.guidestar.org/compensation. Members of the media may request a complimentary copy by e-mailing Gabe Cohen at firstname.lastname@example.org.
To learn more about nonprofit compensation and the 2014 GuideStar Nonprofit Compensation Report, register for our upcoming Webinar, "Best Practices in Nonprofit Compensation," on Thursday, October 2, 2014, at 1 p.m. ET. To find a list of compensation-related articles spanning 2002-2014, please visithttp://www.guidestar.org/rxg/news/articles/compensation-articles.aspx.
GuideStar, www.guidestar.org, is a 501(c)(3) nonprofit that connects people and organizations with information on the programs, finances, and impact of more than 1.8 million IRS-recognized nonprofits. GuideStar, CFC Charitable Organization #75786, serves a wide audience inside and outside the nonprofit sector, including individual donors, nonprofit leaders, grantmakers, government officials, academic researchers, and the media.