Our board is in the process of incorporating some new policies and wants to include a written policy on determining Executive Director compensation. Can you point me in a direction to identify how a small non-profit makes those determinations and/or do you know of another agency about our size that might be willing to share their written policy? Any suggestions are welcome!
Finding info on this topic is challenging. There is plenty of information regarding reporting compensation, especially related to the new 990. GuideStar has an article posted, IRS Changes Requirements on Reporting Nonprofit Executive Compensation, by Linda M. Lampkin at ERI Economic Research Institute. The main points to keep in mind regarding compensation with the new 990 are:
- Review and approval by the board
- No person with conflict of interest involved in compensation decisions
- Comparable data (salaries for like jobs in like enterprises under like circumstances) collected and used to make decisions
- Documentation of decisions when they are made
These are good points for any executive director compensation policy. Charity Goverance Consulting, LLC has posted some articles and feedback about nonprofit director compensation that may helpful too. If anyone would like to offer their own feedback or share a policy, please let us know.
Other nonprofit blogs are a great resource for exploring this ongoing conversation. Here is one example of a post link from Kristen Denzer's Nonprofit SOS blog that discusses what qualifies as too much regarding compensation.
3 comments:
Posted on behalf of Bill Lelbach:
For non-profit theatres, there is an umbrella organization which conducts an annual salary survey for basically all the standard staff positions a theatre would have. Even better, it's divided into responses based on budget size. So if you belong, you can access this info, which is greatly informative for not only executive compensation, but also for what both the average and the median pay is nationally for most staff and production positions.
I would think there's a reasonable chance that whatever the umbrella organization is to cover a particular non-profit's field, they might have similar survey results?
Bill Lelbach
Artistic & Managing Director
Chenango River Theatre
Physical Address: 991 State Highway 12
Mailing Address: PO Box 584
Greene, NY 13778
Posted on behalf of Bien Baez:
Hi, in addition to policy development, it would be helpful for nonprofits to understand how to develop accompanying procedures for vetting and evaluating an executive.
Bien Baez
NYS Office of Mental Retardation and Developmental Disabilities
518 474 2951
These links may be helpful.
Non-profit Executive Compensation
Excellent book on the topic.
http://www.boardsource.org/Bookstore.asp?Item=166
From Opportunity Knocks – resource for non –profits
Compensation for Non Profit Executives
http://content.opportunityknocks.org/info~non-profit-executive-compensation.php
From National Committee for Responsive Philanthropy
Who Decides What is Fair and How Much?
http://www.ncrp.org/blog/2008/07/nonprofit-executive-compensation-who.html
Innovative Trends in Non-Profit Executive Compensation
http://www.evancarmichael.com/Human-Resources/770/Innovative-Trends-in-NonProfit-Executive-Compensation.html
Executive Compensation in the Non-Profit Sector
http://www.urban.org/publications/310372.html
Leadership Compensation in Non-Profit Organizations
http://www.petesmithconsulting.com/nonprofitcompensation.pdf
Steve Baumann
National Soccer Hall of Fame
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